Federal Income Tax Reform in 2017 - An Update
Update: The Senate has now appointed its representatives to the conference committee and committee meetings are being scheduled for the week of December 11, 2017. The House and Senate have passed bills with some significant differences and the conference committee representatives will be negotiating a final version of a tax reform bill from these proposals. Further updates will follow as additional clarity on a final tax reform bill develops.
Tax reform has been a hot topic during 2017 and recent events have increased the likelihood of tax reform being enacted this year. Both the House of Representatives and the Senate have passed tax reform bills that would make sweeping changes to the income taxation of individuals and businesses and also include revisions to the estate tax. While the Senate and House bills share some similarities, there are still substantial differences for Congress to work out. The next step is for the two chambers to meet in a conference to resolve these differences. The House has now appointed its representatives to the conference committee and the Senate is expected to follow suit shortly. The committee members will negotiate a compromise bill that, once it passes both the House and Senate, will move to President Trump’s desk for signature.
The tax reform bills would amend the tax code to provide a number of benefits to taxpayers, including lower individual and corporate income tax rates. However, these changes are accompanied by other revisions that may substantially alter individual and business behavior. For example, there are proposed limitations on the deductibility of home mortgage interest and state and local taxes and other restrictions on the deductibility of interest expense in general by businesses. Many of these provisions would go into effect as of January 1, 2018, and there may be steps that you can take to plan for these changes.
Please contact James H. Combs, Honigman’s Tax Practice Group Leader, or one of the other tax attorneys in Honigman’s Tax Practice Group for advice on how tax reform may impact you, your family or your company, and for factors to consider before year end.