The Senate is anticipated to vote on its own tax reform bill in the near future.
For individuals, this bill would: (1) increase the standard deduction to $12,000 per person, (2) increase the amount of permitted deductions from gifts to public charities, (3) double the estate and gift tax lifetime exemption amount to $10 million per person, and (4) repeal deductions for home equity indebtedness and state and local tax liabilities. Relatedly a new deduction would be available for pass through income from partnerships, LLCs, and S Corporations.
The Corporate tax rate would drop from 35% to 20%, beginning in 2019. Small business expensing under Section 179 would be expanded, and “bonus depreciation” would be increased to full, 100% expensing for investments purchased between September 27, 2017 and December 31, 2022.
In a major departure from the proposed House bill, the changes applicable to individuals are temporary and will sunset in 2026. This means the tax landscape today would go back into effect at the end of the reform period.