Tax Reform Legislation 2017: What You Should Know

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Updated Dec. 15, 2017: Today Congress finalized the Tax Cuts and Jobs Act tax reform bill. The bill will now go to vote by the House followed by the Senate.  This is expected to happen early next week.  The bill will then move to the President’s desk for final passage,possibly by Christmas. Details of the bill are expected to be released by this evening. Check back with the TurboTax blog for details of the final bill as we continue to keep you up to date with the latest tax news.

Updated Dec. 20, 2017: Both the House and the Senate have voted to approve the tax bill.  Next the bill returns to the House floor, where a final passage is expected by midday today.  Check back with the TurboTax blog for details of the final bill as we continue to keep you up to date with the latest news.

You may or may not have heard news about tax reform lately. If you have, you may be wondering if and when new tax legislation will pass and how it will impact you. As with previous years when we are waiting for tax bills to be signed into law. When the tax laws change, TurboTax will be up to date and available with information to help you understand how new tax laws impact you and your taxes.

As Congress works to finalize the tax reform bill, here are a few things to keep in mind to help you understand the process involved in finalizing the tax bill:

One key point to remember is the bill isn’t final yet. House and Senate negotiators are meeting this week to iron things out. That process, which they say they hope to complete by Christmas, requires them to resolve a number of differences between the House and Senate-passed versions.

While some of these issues are still being debated, here are some of the current differences affecting individuals in the House and Senate bills:

  • Medical expense deduction (repealed under House bill, retained through 2018 on the Senate bill)
  • Mortgage interest – differences in mortgage interest limits
  • Income tax rate structures (the House has four rates, the Senate retains 7)
  • Top tax rates for taxpayers (the House is at 39.6%, the Senate is at 38.5%)
  • How long some credits and tax deductions would be allowed. The House would allow certain credits to expire in 2022, while the Senate would eliminate individual tax deductions after 2025
  • The alternative minimum tax (the House eliminates it, the Senate retains it with a bigger exemption amount)

Both bills contain increases in the standard deduction.

Also under discussion are provisions that are the same under both pieces of legislation. For example, both the House and the Senate proposed a 20% corporate tax rate.

Don’t worry about knowing the different tax proposals. TurboTax has your back. We are closely monitoring progress and will give you important updates as they occur and, as in previous years, if there are changes to tax law, TurboTax will be up to date. Rest assured – you can file your 2017 tax returns with complete confidence. We’ve got you covered.

When you file with TurboTax you can connect live to our expansive network of experienced CPAs or Enrolled Agents via one-way video with TurboTax Live and get your tax questions answered and have your return reviewed so you can sign it and file without leaving your couch.

Check back with the blog for updates on tax reform and the proposed tax bill. If and when tax laws are passed, we will be able to tell you how the tax laws impact you and your taxes and give you tips on what you can do to maximize your tax refund.

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