State and Local Tax Deductions, and Mortgage Interest

What’s in place now:

You can generally deduct the amount you pay for state and local tax income taxes, including property taxes, on your federal income tax return. You can also deduct the interest you pay each year on mortgage debt up to $1 million, a cap that can cover multiple homes. Plus, you can generally deduct up to $100,000 in interest you pay on a home-equity loan or line of credit.

What the House proposed:

No more state and local tax deductions, though you could continue to deduct up to $10,000 each year in property tax. For people buying in the future (which the bill defines as Nov. 2, 2017, or later), mortgage interest deductions would be allowed only on loans up to $500,000. Moreover, only debt from primary residences would count toward that limit, and you could not include any interest from home equity loans or lines of credit that you took out on that new home.

What the Senate proposed:

No more state and local tax deductions and no exception for property taxes, either. The mortgage interest deduction, however, would survive in its current form.

Medical Expenses

What’s in place now:

For the moment, you can deduct out-of-pocket medical expenses that exceed 10 percent of your adjusted gross income (but not the expenses that amount to the first 10 percent). This is particularly useful for elderly people and others with lower incomes who need regular assistance and care.

What the House proposed:

The House wants to do away with the deduction in 2018.

What the Senate proposed:

The Senate would keep the deduction.

Student Loan Interest

What’s in place now:

Currently, people with incomes below certain thresholds can deduct up to $2,500 of student loan interest each year.

What the House proposed:

The House wants to do away with the student loan interest deduction.

What the Senate proposed:

The Senate would keep things as they are now.

Estate Taxes

What’s in place now:

In general, you pay taxes on inherited property at a 40 percent rate, but current rules waive that tax for estates up to $5,490,000.