The Senate, on December 2, 2017, approved a sweeping tax reform package – the Tax Cuts and Jobs Act (HR 1) – by a vote of 51 to 49, moving the GOP one step closer to achieving a signature legislative victory. The House previously approved its version of HR 1, also along party lines. Now, the game plan for GOP leaders in the House and Senate appears to be to work out the differences in the two bills in conference. GOP leaders are aiming to reach an agreement quickly on a final bill and secure passage in the House and Senate before year-end.
Both the House bill and Senate bill would impact virtually every individual and business on a level not seen in over 30 years. As with any tax bill, however, there would be “winners” and “losers.” Both versions call for lowering the individual and corporate tax rates, repealing countless tax credits and deductions, enhancing the child tax credit, boosting business expensing, and more.
The White House has signaled its support for tax legislation before year-end. Possible roadblocks to ultimately getting a bill to President Trump’s desk before year-end are unified opposition from Democrats, intense lobbying efforts to preserve tax breaks slated for elimination, and the significant differences in the House and Senate bills. Nevertheless, there remains the outside possibility that the House would bypass the conference-committee stage and bring the Senate version directly to the House floor for a vote.
What Tax Clients Need to Know
Many of the changes to the Internal Revenue Code in the Senate bill are temporary. The House bill, in contrast, calls for permanent changes to the Internal Revenue Code. This important difference between the two bills will be high on the agenda of any conference to iron out a final bill.
Taxpayers need to plan for several possible contingencies: passage of a final tax reform bill before year-end, passage of the bill in early 2018, or the bill failing to move forward. The proposed changes in both the House bill and the Senate bill are forward-looking (after 2017 tax year) for the most part.
Read the entire December 4, 2017 CCH Tax Briefing PDF with additional potential impact of the legislation and a comparison of the House and Senate bills by clicking the button below.Read CCH Tax Briefing
As Congress irons out the final tax reform legislation, MCB will keep clients informed of the legislative changes and the impact on our tax clients. Please contact an MCB Tax Advisor today if you require advice for year-end tax planning by clicking here or call us at 703.218.3600.