House passes tax reform bill (11-16-17)
In a 227-205 vote today, the House passed the tax reform bill (the Tax Cuts and Jobs Act (H.R. 1)). The next hurdle will be passage of the Senate bill.
Here are a few of the differences between the bills:
- The Senate bill's maximum individual rate is 38.5%, while the House bill's maximum is 39.6%;
- The Senate bill has no itemized deduction for property taxes, while the House bill allows up to $10,000;
- The Senate bill's principal residence mortgage interest loan balance limit remains at $1 million with no equity debt allowed, while the House bill reduces the loan balance to $500,000 on the principal residence only with no equity debt allowed;
- Under the Senate bill, sole proprietorships, partnerships, and S corporations may deduct 17.4% of their domestic qualified business income, while the House bill has a complex rate structure for these businesses; and
- Under the Senate bill, there is a flat 20% corporate rate, including personal services, while the House bill has the same corporate rate but taxes personal service businesses at 25%.