Once President Trump signs the GOP tax plan just passed by Congress--millions of Americans will feel the impact.
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The bill includes deep tax cuts for corporations, tax breaks for the wealthy, and what experts say are more limited benefits for middle-class Americans.
Here's what's in the bill:
-- Corporate rate to 21%, down from 35% under current law. Takes effect in 2018.
--- Pass-through deduction rate set at 20% for first $315,000 of joint income
FOR THE WEALTHY
-- Top individual rate to 37%, down from 39.6% under current law.
-- Individual Alternative Minimum Tax exemption increased to $500k for individuals, $1 million for couples filing jointly.
-- Doubles the amount of the current exemption from the Estate Tax (currently $5.5 million)
FOR THE MIDDLE CLASS
-- Standard deduction increased from $12,700 to $24,000 (had been previously reported as $24,400) for joint returns and from $6,350 to $12,000 for individuals. According to the Tax Policy Center, more than two-thirds of Americans take the standard deduction when filing taxes.
-- Tax brackets: 7 brackets + a 0% rate 10%, 12%, 22%, 24%, 32%, 35%, 37%
For those who ITEMIZE instead of take the standard deduction
-- State and local tax deduction capped at $10,000 combined from any/all categories (property/income/sales taxes). Current law caps property tax deduction at $1 million. There are no current caps on state/local income tax deduction.
-- Mortgage interest deduction capped at $750k, down from $1 million under current law.
-- Graduate school stipend deduction (tax-free tuition waivers) preserved.
-- Student loan interest deduction preserved.
--- Medical expense deduction is preserved. It allows Americans to deduct medical expenses not covered by insurance that exceed 10 percent of adjusted gross income.
-- Child Tax Credit preserved. Expanded from $1,000 to $2,000 and refundable up to $1,400 – had previously been refundable up to $1,100 but Rubio got it raised
--- Adoption tax credit is preserved
--- Charitable giving tax deduction is preserved
--- Repeal of individual mandate requiring health insurance. According to CBO, repealing Obamacare’s individual mandate insurance could lead to 13 million more Americans without health insurance, while saving the government $338 billion in federal health insurance subsidy payments over the next decade.