What's In That New Tax Bill

I haven't spent a lot of time studying or worrying about the differing tax plans making their way through Washington because it's hard for me to waste the time on something like this until it becomes reality.  Still with the House passing their version of the bill last week we're starting to see on paper some outlines of what might actually be in a final bill.  The Chicago Tribune last week had a pretty decent synopsis of what passed the House.  You can read that article here.  My readers might be interested in the status of certain deductions and I've include that information below:

"....{T}he House bill also does away with many of the credits and deductions and replaces them with a larger standard deduction, a slightly larger child tax credit ($1,600 per kid versus $1,000 now) and a new Family Flexibility Credit worth $300 a year for individuals and $600 for couples. The larger standard deduction means the first $12,000 for individuals and $24,000 for couples is tax-free.

Say goodbye to most deductions. Almost all itemized deductions are going away, except for three. The final House bill keeps the deductions for charitable donations, property taxes up to $10,000 a year and the mortgage interest deduction. The mortgage interest deduction would be capped at $500,000 for mortgages (down from $1 million now).

About 30 percent of filers itemize. Most of the people who itemize claim the state and local tax deduction (SALT) where they deduct their state and local sales, income and property taxes. Under the House bill, only the property deduction would remain. This hurts people living in high-tax (and often blue) states like New Jersey, New York and California. Several GOP representatives from these states plan to vote no on the bill in protest.

- The adoption credit stays. The 401(k) exemption stays. But . . .

- Say goodbye to the tax credits for plug-in motor vehicles. It gets repealed in 2018.

- Say goodbye to the deduction for medical expenses. It goes away in 2018.

- Say goodbye to being able to write off the costs of your tax preparer. That goes away in 2018.

- Say goodbye to the deduction for moving expenses. It goes away in 2018, except for members of the military.

- Say goodbye to most tax benefits for college. At the moment, low and middle income Americans can deduct up to $2,500 a year in student loan interest. That benefit would go away in 2018. In addition, grad students who get tuition waivers because they teach or do research would now have to pay income tax on the waiver, a big change. For students currently in school, the American Opportunity Tax Credit would remain, which allows a $2,000 credit for higher education expenses.

- Say goodbye to the deduction for theft or loss of valuables. Right now people can write a lot of their losses off on their taxes, but that would be gone in 2018. The one exemption is losses for a natural disaster such as Hurricane Harvey. Those would stay."

Some, all or none of this may make into the final bill so I wouldn't spend too much time worrying about this yet unless you're an accountant.  Still at this point we should probably begin to pay more attention as we now have an actual bill making its way through the legislative process.