An agreement appears to have been reached between House and Senate negotiators on a Reconciliation Bill to work out the differences between the two versions of the Tax Cuts and Jobs Act passed by the two chambers.
Significant changes as part of the reconciliation process include:
• Top Corporate tax rate of 21% instead of the 20% stated in both earlier bills.
• Top Individual tax rate of 37%, this in contrast to the current top individual rate of 39.6%.
• Mortgage interest debt cap of $750,000 for newly purchased homes, the House was $500,000; the Senate was the current cap of $1 million.
• Corporate Alternative Minimum Tax is repealed with Individual Alternative Minimum Tax being retained but with fewer taxpayers expected to be impacted.
• Retaining the deduction for Unreimbursed Medical Expenses.
• An allowance of up to $10,000 for a combination of State and local income tax and/or property tax deduction.
In the next week or so, we should know more about the above proposals, further changes, and likelihood of passage. This may result in year end tax planning opportunities for you.
We will continue to update you as information becomes available.
Please feel free to reach out to the Rudler Team about how these changes could affect your business or individual income tax filings at 859-331-1717.