Senate Tax Bill

The Senate tax bill came out with some differences with the House bill which I discussed last week. Listed below are the significant differences:

1. The state and local tax deduction is completely repealed.
2. The corporate tax rate change to 20% is delayed to 1/1/2019.
3. The medical expense deduction is maintained.
4. The mortgage interest deduction loan cap is maintained at $1 million.
5. The estate tax is not repealed in 2024.
6. There are 7 income tax brackets.
7. The top income tax rate for individuals is 38.5%.
8. Pass through businesses would get a 17.4 percent deduction for non-wage income. Many types of service businesses would not qualify for this deduction.

If both the House and Senate pass their proposals, then these differences would have to be reconciled before the bill is presented to President Trump for signing into law.