Tuesday August 14, 2018
Bipartisan Tax Reform Conference Committee
The conference committee will be chaired by Rep. Kevin Brady (R-TX). He is Chairman of the House Ways and Means Committee. Other tax writer members are House Ranking Member Sander Levin (D-MI), Senate Finance Committee Chairman Orrin Hatch (R-UT) and Senate Ranking Member Ron Wyden (D-OR).
There are major differences in the House and Senate bills that must be reconciled by the conference committee.
- Tax Brackets - The House has four brackets with a top rate of 39.6% and the Senate has seven with a top rate of 38.5%.
- Mortgage Interest Deductions - The House allows an itemized interest deduction on mortgages up to $500,000. The Senate would continue the existing mortgage limit of $1 million.
- Medical Deductions - The Senate permits the current itemized medical deduction. For most taxpayers, the medical deduction is available to the extent that your medical expenses exceed 10% of adjusted gross income. The House eliminates the medical deduction because it assumes the doubling of the standard deduction will cover most taxpayers.
- Alternative Minimum Tax (AMT) - The House repeals AMT. The Senate needed more tax revenue to pass its bill and reinstated the AMT with higher exemptions.
- Small Business Taxes - Many small businesses are operated as partnerships, proprietorships or LLCs. Both bills reduce the tax rate for income earned in a business, but there are substantial differences between the methods selected by the House and Senate.