Tax Update: Senate Passes Tax Reform Bill
Early morning on December 2, 2017, Senate leaders passed what will be an historic tax overhaul bill, the Tax Cuts and Jobs Act. Senate Finance Committee Chairman Orrin Hatch stated in a press release from the Committee that “this landmark achievement is the culmination of months of hard work and cooperation among Finance Committee members; leaders from the Senate, House and administration; and the entire Senate Republican Conference.”
On December 1, the Senate Finance Committee announced improvements to its proposed Senate Tax Bill; and the amended bill was filed on the evening of Friday Dec 1. Some of the modifications to the proposed Senate Tax Bill include:
– A deduction up to $10,000 in property taxes paid to state and local governments (this provision is consistent with the treatment of property taxes in the House-passed bill)
– Increasing the deduction for small business owners’ qualified business income from 17.4%to 23%
– Extending 100% expensing for qualified business property by four more years, adding to the five years included in the underlying bill
– Eliminating an Affordable Care Act restriction on the deductibility of medical expenses (which would allow medical expenses to be deducted if they exceed 7.5% of an individual’s adjusted gross income, rather than the 10% threshold under current law)
Several tax policies of the reform bill are currently treated differently between the House and the Senate. The chart below provides a comparison of the components of each (click to enlarge):
These discrepancies will need to be reconciled and passed before the President can sign the cohesive tax reform bill into law. President Trump has expressed a desire to have the reconciled Bill on his desk by the Christmas holiday, which gives lawmakers only a few weeks to deliver the finalized bill by the desired deadline.
FOR MORE INFORMATION
Here at FF&F we are committed to keeping a close watch on any and all regulatory and legislative changes that could affect our clients. We will continue to provide updates as the proposed reform plan reaches further development. We encourage you to contact us with any questions or concerns you may have related to these changes and how they might affect you individually. For such inquiries, or for information about our services, please contact us at firstname.lastname@example.org or (212) 245-5900.
- Click here for the Senate Finance Committee’s 12/1 press release, “Finance Committee Announces Improvements to Senate Tax Bill”
- Click here for the Senate Finance Committee’s 12/2 press release, “Historic Tax Overhaul Passes U.S. Senate”
Deven M. Conner, CPA, EA is a Tax Professional with FF&F. He is an IRS Enrolled Agent and has over 10 years of combined tax and public accounting experience comprised of family office groups, private equity firms, and forensic accounting. Deven has a strong background in individual, fiduciary, and partnership taxation. His diversified experience in the private and public sectors, which include a Big Four firm and top mid-size public accounting firm, serves as a solid foundation for his unique and comprehensive understanding of taxation.