Income taxes Current Law G.O.P. Bill

The bill would lower individual tax rates over all. But to comply with Senate budget rules, the individual tax cuts would expire after 2025.

Tax brackets Seven Seven, lower over all

The bill would lower individual tax rates over all. But to comply with Senate budget rules, the individual tax cuts would expire after 2025.

Top rate 39.6% 37%

starts at: $426,700 / $480,050

(singles/couples) $500,000 / $600,000 (singles/couples)

Alternative Minimum Tax Alternative income tax calculation for high-income taxpayers Keeps, but increases exemption so fewer will pay it

Standard deduction and exemptions

The standard deduction would nearly double, so many more people would end up taking it.

Standard deduction $6,500 / $13,000

(singles/couples) $12,000 / $24,000 (singles/couples)

The standard deduction would nearly double, so many more people would end up taking it.

Personal exemptions $4,150 per taxpayer and dependent Eliminates

Family tax credits

The child tax credit would double, and it has a larger refundable portion that would allow more lower-income families to benefit.

Child tax credit $1,000 $2,000

The child tax credit would double, and it has a larger refundable portion that would allow more lower-income families to benefit.

Refundable portion: 15% of earnings over $3,000 Up to $1,400

Credit for other dependents None $500

Family tax credits phase out starting at: $75,000 / $110,000

(singles/couples) $200,000 / $400,000

(singles/couples)

Inflation

The biggest long-term change for taxpayers in the bill, it would result in a tax increase over the long run, long after the tax cuts expire.

Inflation measure used for certain income thresholds Consumer Price Index (CPI) Chained CPI (C-CPI), a less generous measure

The biggest long-term change for taxpayers in the bill, it would result in a tax increase over the long run, long after the tax cuts expire.

Education Current Law G.O.P. Bill

Education credits American Opportunity Tax Credit, Lifetime Learning Credit and Hope Scholarship Credit No change

Student loan interest deduction Can deduct up to $2,500 No change

Graduate student tuition waivers Tuition waivers are not treated as taxable income No change

A big victory for families that send their children to private school.

Education savings plans None Expands use of 529 college savings accounts to include K-12 private school tuition

A big victory for families that send their children to private school.

Deduction for classroom expenses $250 deduction No change

Itemized deductions

Some Republican representatives in high-tax districts have said they will vote “no” because of the scaling back of the “SALT” deduction.

State and local tax deduction Income or sales and property taxes are deductible All state and local tax deductions limited to $10,000

Some Republican representatives in high-tax districts have said they will vote “no” because of the scaling back of the “SALT” deduction.

Mortgage interest deduction Can deduct interest payments on up to $1 million of debt Limited to payments on $750,000 of debt

Moving expenses Can deduct personal expenses Eliminates , except for members of the military

Employer-provided expense reimbursements are excluded Eliminates , except for members of the military

This deduction, which would have been eliminated by the House bill, is most important to low-income taxpayers with high out-of-pocket health care costs.

Medical expenses deduction Can deduct out-of-pocket expenses in excess of 10% of adjusted gross income Expands by reducing threshold to 7.5% of income Applies to 2017 and 2018

This deduction, which would have been eliminated by the House bill, is most important to low-income taxpayers with high out-of-pocket health care costs.

Overall limit on itemized deductions Phase out beginning at $266,700 / $320,000

(singles/couples) Repeals

Other individual taxes

This provision, estimated to save over $300 billion, would severely weaken the Affordable Care Act

Individual mandate Penalty for not having health insurance Eliminates Starts in 2019

This provision, estimated to save over $300 billion, would severely weaken the Affordable Care Act

Estate tax Top rate of 40% on estates above $5.6 million Increases threshold to estates above $11.2 million

Pass-through income Taxed at individual rates 20% deduction, phasing out starting at $315,000 of income for couples

Capital gains Top rate of 23.8% (including net investment income tax) No change

Corporate taxes Current Law G.O.P. Bill

The largest tax cut in the bill would be permanent, as would other corporate tax changes.

Top corporate tax rate 35% 21%

The largest tax cut in the bill would be permanent, as would other corporate tax changes.

Business interest deduction Generally fully deductible Caps deduction at 30% of income (excluding depreciation)

The Senate’s decision to keep the corporate A.M.T. was reversed after blowback from several industries

Alternative Minimum Tax Alternative income tax calculation for businesses Eliminates

The Senate’s decision to keep the corporate A.M.T. was reversed after blowback from several industries

New investment purchases Complex rules for deducting over many years Five years of full expensing, then phased out over five more years

Section 179 expensing Small business expensing limited to $500,000 Increases limit to $1 million

The bill raised money by speeding up the effective dates for these last two provisions, which were included in the Senate bill.

Net operating losses Can deduct net operating losses from income in other years Limits the deduction to 80% of taxable income

The bill raised money by speeding up the effective dates for these last two provisions, which were included in the Senate bill.

Research and development expenditures Can be immediately deducted Would need to be written off gradually

Business credits and other

Orphan drug tax credit Credit for 50% of qualifed testing expenses Reduces credit rate to 25%

Renewable electricity tax credit Credit for wind power production, phasing out by 2020 No change

Private activity bonds Tax-exempt bonds used to fund low-income housing and other projects No change

International

The bill would move from the current worldwide tax system, in which income earned abroad is taxed in the United States, to a territorial system in which only domestic profits would be taxed.

Taxation of multinational companies Worldwide system with deferral and credit for taxes paid abroad Modified territorial system with new anti-abuse tax

The bill would move from the current worldwide tax system, in which income earned abroad is taxed in the United States, to a territorial system in which only domestic profits would be taxed.