As the final votes in the House and Senate are taking place today, we are busy crunching the numbers for how this will impact individuals and families. In our last post we compared the initial House tax reform bill to the current tax code and now we want to do the same with the final bill that is being voted on today. For everyone who just wants to use the calculator, clicking on the link will open it in a new window:

GOP_tax_calculator

While we can't cover every provision and amendment included in the final bill, we have tried to incorporate all the major changes. Here are the big ones we have included:

  1. State and local income and property tax
  2. Home equity loan interest
  3. Medical and Dental expenses
  4. Child tax credit
  5. Family tax credit
  6. Income tax brackets
  7. Exemptions

Some things that haven't changed are:

  1. Existing primary residence mortgage interest
  2. Retirement account contributions
  3. Charitable contributions
  4. Student loan interest 

Some things we haven't included are:

  1. Future changes when provisions in the bill expire
  2. A future home purchase (mortgages over $750,000 will be impacted)
  3. The Alternative Minimum Tax (we haven't modeled the AMT or its changes)
  4. Changes to pass-through income for small business owners
  5. Changes to income from a corporation

The last item (corporate tax cuts) is really where all the long-term benefits are going as the reduction of the corporate tax rate from 35% to 21% is permanent while all the benefits to individuals and families expire after 2025. Along with the list above, there are going to be an untold number of unintended consequences including an increase in healthcare costs due to the repeal of the individual mandate. We may get to these in a future post, but for now we thought this follow-up to our initial tax comparison tool was something worth publishing today.

Please Note: We have tried to model all the incorporated changes accurately and believe we have, but we can't guarantee its accuracy and there are certainly provision of the Tax Cuts and Jobs Act that are not included in our calculator.

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Jason Draut, CFP®
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