U.S. Tax Reform Bill Revealed

 In Alerts, News

Today the U.S. House of Representatives Committee on Ways and Means released the Tax Cuts and Jobs ActThe bill is 429 pages long, but an 82-page summary of the proposed reforms is available. Although it will take some time for tax professionals to analyze all of the proposed changes, the main facets are summarized below.

Personal Tax Reform

  • reform of rates, standard deduction, and exemptions
  • simplification and reform of family and individual tax credits
  • simplification and reform of education incentives
  • simplification and reform of deductions
  • simplification and reform of exclusions and taxable compensation
  • simplification and reform of savings, pensions, retirement
  • estate and generation-skipping transfer taxes (double exemption to $10m, repeal after 2023)

Alternative Minimum Tax Repeal

Business Tax Reform

  • reducing corporate tax rate (20% flat rate)
  • cost recovery (increased expensing)
  • small business reforms
  • reform of business-related exclusions, deductions, etc.
  • reform of business credits
  • energy credits
  • insurance
  • compensation

Taxation of Foreign Income and Foreign Persons

  • establishment of participation exemption system for taxation of foreign income
  • modifications related to foreign tax credit
  • modification of Subpart F provisions
  • prevention of base erosion
  • provisions related to possessions of the United States
  • other international reforms

Exemption Organizations

  • unrelated business income tax
  • excise taxes
  • requirements for organizations exempt from tax
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