TAX BILL FACTS: What’s In It?

TAX BILL FACTS: What's In It and What Does It Mean For You?

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TAX BILL FACTS: What’s In It and What Does It Mean For You?

According to this:

INDIVIDUAL

BRACKETS: Maintains current seven tax brackets, but temporarily changes most income levels and rates for each one.

For married couples filing jointly, effective Jan. 1, 2018 and ending in 2026, income tax would be:

10 percent up to $19,050, versus 10 percent up to $18,650 under existing law;

12 percent on $19,051 to $77,400, versus 15 percent on$18,651 to $75,900;

22 percent on $77,401 to $165,000, versus 25 percent on $75,901 to $153,100;

24 percent on $165,001 to $315,000, versus 28 percent on $153,101 to $233,350;

32 percent on $315,001 to $400,000, versus 33 percent on $233,351 to $416,700;

35 percent on $400,001 to $600,000, versus 35 percent on $416,701 to $470,700

37 percent above $600,000, versus 39.6 percent above$470,700.

For single individuals, effective Jan. 1, 2018 and ending in 2026, income tax would be:

10 percent up to $9,525, versus 10 percent up to $9,325 under existing law;

12 percent from $9,526 to $38,700, versus 15 percent on $9,326 to $37,950;

22 percent on $38,701 to $82,500, versus 25 percent on $37,951 to $91,900;

24 percent on $82,501 to $157,500, versus 28 percent on $91,901 to $191,650;

32 percent on $157,501 to $200,000, versus 33 percent on $191,651 to $416,700;

35 percent on $200,001 to $500,000, versus 35 percent on $416,701 to $418,400;

37 percent above $500,000, versus 39.6 percent above $418,400.

These brackets would expire after 2025.

STANDARD DEDUCTION: In a change expected to end itemizing of deductions for millions of Americans, the bill for eight years beginning on Jan. 1, 2018, would increase the standard deduction – a fixed amount that can be subtracted from adjusted gross income to lower taxable income – to $12,000 from $6,350 for individuals, and to $24,000 from $12,700 for married couples.



CHILD TAX CREDIT: Doubles the child tax credit to $2,000 per dependent child under age 17, with a refundable portion of $1,400. The refundable portion allows families to lower their tax bills to zero and receive a refund for the remaining value.

 PERSONAL EXEMPTION: Temporarily eliminates the $4,050 individual personal exemption. Under present law, taxpayers who earn below certain income caps can subtract this fixed dollar amount from their adjusted gross incomes to lower their taxable incomes. Generally, one exemption has been allowed per individual, spouse and child or other dependent. This would take effect Jan. 1, 2018, but then the personal exemption would return in 2026.

INDIVIDUAL ALTERNATIVE MINIMUM TAX: Leaves the AMT in place but temporarily changes it by raising its exemptions and phase-outs. That will mean fewer people will have to pay the tax, while those who still do will take a smaller hit from it.

INHERITANCES: Raises the exemption for estate and gift taxes to $10 million from $5 million per person and indexes the new exemption level for inflation after 2011. That means even fewer Americans would pay the estate tax, but it would stay on the books.

MORTGAGES: For residences bought from Jan. 1, 2018, through Dec. 31, 2025, the bill caps the deduction for mortgage interest at $750,000 in home loan value. After Dec. 31, 2025, the cap would revert to $1 million in loan value. Suspends the deduction for interest on home equity loans from Jan. 1, 2018 until 2026.



MEDICAL EXPENSES: Temporarily expands the deductibility of out-of-pocket medical expenses through 2019.

OTHER PROVISIONS

OBAMACARE MANDATE: Repeals federal fine imposed on Americans under Obamacare for not obtaining health insurance coverage, a change expected to undermine the 2010 healthcare law.

TAX BILL CHART GET MORE INFORMATION HERE

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