GOP leaders finally unveiled key details in their tax overhaul plan. There are some winners and losers as always the case. Two losers are the homebuilders and Tesla. Part of the mortgage write-off goes away and the bill will repeal electric car credits. Families with lots of kids may lose as well.

CNN asks What’s in the House Tax Bill?

Income Brackets

Currently there are seven federal income tax brackets taxed at 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. The House bill consolidates that to four.

12% (on the first $45,000 of taxable income for individuals; $90,000 for married couples filing jointly)

25% (starts at $45,000 for individuals; $90,000 for married couples)

35% (starts at $200,000 for individuals; $260,000 for married couples)

39.6% (starts at $500,000 for individuals; $1 million for married couples)

The is no marriage penalty under this setup. In fact, married couples come out ahead in many instances where one wage earner makes most or all of the money.

Standard Deduction

The bill raises the standard deduction for singles to $12,000 from $6,350 and it raises it for married couples filing jointly to $24,000 from $12,700.

This will dramatically lower the number of people who itemize deductions, especially when combined with reductions in mortgage interest and state income tax deductions.

Personal Exemptions Eliminated

Today you’re allowed to claim a $4,050 personal exemption for yourself, your spouse and each of your dependents. The House bill eliminates that option.

Families with three or more kids may fare worse under the revised code.

New Family Credits and Expansion of Child Tax Credit

The bill creates new $300 credits for non-child dependents and it also increase the child tax credit to $1,600, up from $1,000, for any child under 17. But these credits apply only to taxes paid.

Currently, people can get money back. This setup will eliminate fraud but social advocates will scream.

Dependent Flexible Medical Spending Accounts Eliminated

Print Friendly, PDF & Email

Related Posts