With less than a week until their Christmas deadline, House Republicans passed the converged Tax Cuts and Jobs Act bill in a 227-203 vote on Tuesday. However, the Senate Parliamentarian is requiring a re-vote, citing three provisions in violation of the Senate Byrd rule. The Senate will continue with its vote Tuesday, and the House will vote again on Wednesday, Dec. 20, once the bill is amended and voted on by the Senate. All signs point to the bill making it to President Trump’s desk, even with Sen. McCain’s voting absence.
The real estate community, especially the National Association of REALTORS® (NAR), has advocated for a tax reform bill that protects homeowners. While some of the final provisions in the Tax Cuts and Jobs Act are an overall improvement to tax policy changes that were initially proposed in the Senate and House bills, NAR does not believe they are enough to truly benefit the homeowner community.
“NAR remains concerned that the overall structure of the tax reform bill poses problems for homeowners and the broader housing market, but the conference committee has made some important improvements to the House and Senate legislation outlined below that ultimately will benefit some homeowners and communities,” according to NAR in a statement on its Tax Reform page. “We are particularly pleased with the treatment of capital gains on the sale of a home and the preservation of deductions for second homes. We are also grateful that the positive changes for commercial real estate and real estate professionals from the Senate bill have survived.”
If the bill is signed by the end of the year, U.S. taxpayers could see an impact on their paychecks as early as the next couple of weeks. The new bill has lowered the tax brackets, which will mean less money taken out of some paychecks. Most changes, however, will become apparent when U.S. residents go to file taxes in 2019 for the 2018 tax year. The numbers will change over time, as well. The Tax Policy Center estimates that although individual taxes would be reduced, on average, in 2018, more than half of households will experience a tax increase by 2027.
The Senate will have to vote yes on the bill before it can be sent to the President’s desk, but here are some of the major changes Americans can expect if the bill successfully passes:
- Eliminates the Affordable Care Act healthcare mandate
- Reduces the corporate tax rate from 35 percent to 21 percent
- Roughly doubles the standard deduction for both individuals and married couples
- Increases the child tax credit from $1,000 to $2,000
- Lowers the threshold for the mortgage interest deduction from $1 million to $750,000
- Doubles the basic exclusion on the estate tax
Stay tuned to RISMedia for more developments.
Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at email@example.com.
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