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Last GOP tax bill: What’s in and What’s out
GOP lawmakers gear up to vote on a massive tax reform: child credits, corporate income tax, here is what is in and what is out.
To come to an agreement on a final version of the new tax-reform legislation, the members of the house of representatives and the Senate are voting on the bill on Tuesday. If all goes as planned, President Trump, it is expected that the bill, formally known as the tax cuts and the Jobs Act, before Christmas.
In the meantime, here are the main take-aways from the tax are to blame.
Do companies get a big tax cut?
Yes. The new law lowers the corporate tax rate from 35 to 21 percent.
How will this affect my personal income tax?
The draft law considers the seven tax classes at the same time reducing the prices on five of them. The new rates start at 10 percent and rise to 12, 22, 24, 32, 35 and 37 percent.
The highest rate — 37% — applies to persons whose income is over $500,000 US dollars. For a joint Filer, the threshold is $600,000. This rate will be reduced from 39.6 percent.
Will I still be fined if I have no health insurance?
No. From 2019, the new legislation, the Affordable Care Act, the individual mandate is eliminated.
What is with the alternative minimum tax rate (AMT) ?
The alternative minimum tax rate is have essentially a secondary tax on the good; to compensate for the benefits that could get a person with a high income. The new law eliminates the AMT for corporations, but for individuals. It is the exemption to $500,000 for single tax payers and $1 million for couples.
How does the new law impact on the children’s allowance?
Under the new law, taxpayers can $2,000 credit to claim for each qualifying child under the age of 17. The tax credit applies to single filers and married couples, and is fully refundable up to $1,400.
And what is with real estate?
The new law keeps the estate tax at 40 percent, but doubles the exemption levels are currently $5.49 million for individuals and $10.98 million for married couples.
What is with my state and local tax deductions, or SALT?
Under the finalized bill, families can deduct up to a total of 10,000 US dollars in local property and state and local taxes.
What if I want a new home to buy?
For new home buyers, the mortgage interest deduction will be available for mortgages up to $750,000. This is down from $1 million.
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How are pass-through provisions be affected?
Pass-through businesses are generally a single companies, joint ventures, limited liability companies and S corporations. You are not taxed as corporations. Instead, the winnings will be counted from these companies, in the owners personal tax returns.
The final bill gives the company a 20 percent deduction for the first $315,000 of their joint income.
What if I get BAföG? And what medical expenses deduction?
The new tax debt keeps the current deductions for student loan interest. In addition, the tuition waivers received by doctoral students remain tax-free.
If you have expensive medical bills that could be in this part of the bill of advantage for you. The legislation allows the taxpayer to deduct medical expenses more than 7.5 percent of your adjusted gross income.
Fox News’ Madeline Farber, Sam Chamberlain, and Kaitlyn Schallhorn contributed to this report.