First a disclaimer–As this article went to print in late November, the tax overhaul bill had not been finalized. That being said, here are some areas that both the House and Senate agree on in some aspects and will likely make it to the final cuts.
In an effort to reduce the number of filers that itemize, both the House and the Senate are pushing to double the standard deduction, $24,400 and $24,000 respectively. At first glance this looks good. However, there is a caveat. Both want to repeal the personal exemption for each family member, which is $4,150 in 2018. This could have a big impact on large families.
Other items that will impact tax payers: state and local taxes would no longer be deductible. Alternative Minimum Tax (AMT) would be repealed. The estate-tax exemption would be increased from $5 million per individual to $11.2 million per individual and $22.4 million per married couple.
The above chart provides insight into the impact on taxpayers should current proposals play out. For now, all we can do is sit on the sidelines, watch the show, and hope for a practical solution for everyone.
*Smedley Financial and its employees do not provide tax advice; therefore it is important to coordinate with your tax advisor regarding your specific situation.