Tax Cuts and Jobs Act (TCJA) Proposed House Bill

This proposed bill may be bigger in impact than any changes in the tax code since 1954. It may go for a vote in the House next week and then be sent to the Senate for their changes and approval. The President wants to sign the tax bill before Christmas. Most of the changes are effective January 1, 2018. Some of the more important changes are listed below:
1. Change in the corporate rate to 20% from 35%
2. Repeal of the alternative minimum tax
3. Increase of the estate exclusion to $10 million from $5.6 million
4. Repeal of the estate tax on 1/1/2024
5. Change in gift tax rate to 35% from 40% on transfers over $10 million
6. Increase in the child credit to $1,600 from $1,000 for each qualifying child
7. 100% bonus depreciation deduction for the cost of qualifying property placed in service after 9/27/2017
8. Used property will now qualify for 100% bonus depreciation.
9. Like kind exchanges will not include personal property.
10. Two year carryback period of net operating losses is eliminated. Carryforward period will be indefinite.
11. Repeal of the domestic production deduction
12. No deduction allowed for client entertainment expenses
13. 25 percent max rate for business income from passthrough entities from a passive business activity subject to further limitations
14. The 25 percent max rate does not apply to most service businesses such as health, law, engineering, architecture, accounting, financial services, consulting, etc.
15. Section 179 expensing limitation goes to $5 million from $500,000.
16. The top individual rate of 39.6% applies to joint tax returns at the $1 million level of taxable income up from $480,050.
17. The lowest tax bracket increases to 12% from 10%.
18. The personal exemption deduction is repealed.
19. All itemized deductions are repealed except for charitable contributions, property taxes up to $10,000, and mortgage interest. Mortgage interest deductions on new loans up to $500,000 would only be allowed.
20. No new home equity mortgage interest is deductible.
21. The standard deduction goes to $24,000 for joint returns and $12,000 for single returns.
22. Alimony is no longer deductible or taxable.
23. Repeal of the tax credit for adoption
24. Repeal of the additional standard deduction for the elderly
25. $300 child credit for any dependent who is not a qualifying child