House passes tax reform bill (11-16-17)

In a 227-205 vote on November 16, 2017, 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%.