Last week, our tax law blog examined the progress of the GOP tax reform bill H.R. 1, better known as the Tax Cuts and Jobs Act, which would make sweeping changes to the existing Tax Code if enacted into law. After the House Ways and Means Committee voted 24-16 in favor of the bill, which was introduced by Ways and Means Committee Chairman Kevin Brady (R-TX), H.R. 1 proceeded to the full House, where it passed with a 227-205 vote on Thursday, November 16. Meanwhile, the Senate continues to refine its own tax reform bill, which on several points diverges sharply from the House’s version. The Senate tax bill is expected to head to the Senate floor after the Thanksgiving holiday, at a time to be determined. Until then, California tax attorneys – and taxpayers nationwide – can only guess at the fate of the GOP’s latest tax reform initiative.
Republicans in both chambers of Congress hope to achieve sweeping tax overhaul via comprehensive tax reform bills currently circulating in the House and Senate. But while both bills share the same general goal – simplifying the Tax Code while lightening the tax burden on individuals and businesses – they take different approaches to achieving this objective.
While it’s difficult to predict which version will ultimately have greater success in Washington, both proposals would dramatically alter the Tax Code as it applies to millions of individuals and businesses, impacting tax brackets, the standard deduction, the Estate Tax, corporate tax rates, the health insurance individual mandate, eligibility for various credits and deductions, and other crucial issues. Summarized below are just a few examples of several key differences between the House and Senate tax packages in their current forms.
The GOP’s current legislative goal is to develop a final version of a tax reform bill before the end of 2017. With just over a month left in the year, time is short and stakes are high, ensuring a busy six weeks for members of Congress.
“The tax reform debate is moving forward faster than we or most other observers expected,” wrote Goldman Sachs political economist Alec Phillips, who was quoted in Business Insider. “While there are a number of issues that could still slow it down, or stop it altogether, we believe the odds that tax reform will be enacted by early 2018 — already our base case — have risen to 80% (from 65% previously).”
For our earlier analysis of the Tax Cuts and Jobs Act, click here. We’ll continue to post updates on the evolving legislation as the GOP tax reform effort advances.
Tax reform serves two core functions: (1) stimulating the economy by easing the tax burden on individuals and business owners, and (2) simplifying the regulations established by an increasingly labyrinthine Tax Code. If the GOP is successful, taxpayers will require step-by-step guidance to incorporate the new laws into their financial and tax planning strategies – and if it is not, taxpayers will have little choice but to continue contending with the Tax Code in its current form, at least until the next reform effort.
If you are among the millions of taxpayers who struggle to navigate the complicated Tax Code each year, we encourage you to contact the Tax Law Office of David W. Klasing for a reduced-rate consultation on the tax planning services our Los Angeles tax attorneys offer, including tax preparation services, estate planning services, and accounting services. Based in Orange County, CA, our offices are conveniently located to assist taxpayers throughout the Los Angeles metropolitan area, while our international tax attorneys provide meticulous guidance and aggressive representation for expatriates, citizens abroad, and owners of foreign financial accounts.
To learn more about how our knowledgeable San Bernardino tax attorneys can assist you with general tax return preparation, an IRS tax audit, unfiled tax returns, or other tax-related matters, contact us online by clicking the link above, or simply call our law offices at (800) 681-1295.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices in San Bernardino, Santa Barbara, Panorama City, and Oxnard! You can find information on all of our offices here.