Last week, the House GOP unveiled the “Tax Cuts and Jobs Act,” a bill that would make significant changes to the Internal Revenue Code. 415 Group Partner Dan Kloha, CPA, explains some of the proposal’s key elements.
“In its current form, this bill is 429 pages long and the summary issued by the Committee on Ways and Means is 82 pages long, so it’s difficult to distill the entire potential impact. But with this article, we’ve highlighted some of the key components that our clients should be aware of.
From a business owner standpoint, this bill drops the maximum corporate tax rate from 35 percent to 20 percent, and it reduces the flow-through tax rate for qualified “business income” from 39.6 percent to 25 percent. That would have a huge impact for some of our clients.
Individuals may be focused on a few different items. The plan nearly doubles the standard deduction, while also eliminating personal exemptions. It also includes major changes to the mortgage interest deduction, medical expense deductions and state and local tax deductions. (See details below.)
It’s important to note that what’s outlined here will not be the final form. The proposal will likely undergo changes in the Senate. At 415 Group, we’ll continue to monitor the tax plan as it unfolds and keep our clients informed along the way.”
House Republicans released a tax bill on Nov. 2, which proposes major changes to the Internal Revenue Code. The proposal would overhaul components of the tax code, including: