Breaking Down the Key Provisions of the House’s Tax Proposal
The Targets of the House’s Tax Proposal are specified in the Key Provisions to bring extensive changes to the Internal Revenue Code by fiscal 2018. Here’s a quick breakdown:
Tax Brackets: Every amendment is realized within the present structure of seven tax brackets, though the rates are adjusted and newly proposed to be four: 12%, 25%, 35%, and 39. The 39.6% rate would apply on income above $1 million for married persons and $500, 000 for single persons.
Deductions: Nearly all personal expenses are omitted, among them, include; health expenses, state and local taxes, and student loans interest expenses. Most of these deductions are kept but place new limitations on them including deductions for charitable contributions and mortgage interest.
Business Taxes: It states that overall corporate income tax rates would be reduced to 20% from the current 35%, while individual taxes on so-called pass-through enterprises such as LLCs and S-corps for active investors will also be changed to the positive side.
Estate Tax Changes: The estate tax rate would be 18000 per $ million over $10 million, with the aim of completely repealing the tax in 2023.
So far, these are issues meant to make the tax structure easier, spur economic growth and offer taxpayers a break depending on their earnings.
Read more: Key provisions of the house’s tax proposal