This month, the House of Representatives released a draft tax reform bill titled the “Tax Cuts and Jobs Act,” which represented the first significant and detailed step toward tax reform under the Trump Administration. The House passed its tax bill on November 16; however, the Senate Finance Committee has released its own version of the proposed tax reform legislation that is now under consideration.
Congress is moving quickly to advance tax reform legislation, although it is unclear when or if an agreed bill will be passed by both houses of Congress. As drafted, most of the provisions would be effective for the 2018 tax year. Thus, it is important to understand the proposed changes and potential impacts now.
Though there are similarities between the two proposed legislations, the bill under consideration by the Senate Finance Committee differs from the House bill in several respects. These differences include changes to the following:
- Individual tax rates,
- Itemized deductions,
- Retaining the estate and GST taxes,
- The timing of changes to the corporate tax rate,
- And pass-through entities.
The professionals in BDO’s National Tax Office break down provisions included in the bills that will have major impacts both domestically and internationally. In a recent Federal Tax Alert, BDO’s professionals provided an overview of the differences between the House and Senate versions of the tax reform bill.
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