You’ve heard news about tax reform and may be wondering if and when new tax legislation will pass, and how it will impact you and your clients. As with previous years when we are waiting for tax bills to be signed into law, when tax laws change, Intuit® ProConnect™ will be up to date and available with information to help you understand how new tax laws impact you, your clients and your firm.
As Congress works to finalize the tax reform bill, here are a few things to keep in mind to help you understand the process involved in finalizing the tax bill:
One key point to remember is the bill isn’t final yet. House and Senate negotiators are meeting this week to iron things out. That process, which they say they hope to complete by Christmas, requires them to resolve a number of differences between the House and Senate-passed versions.
While some of these issues are still being debated, here are some of the current differences affecting individuals in the House and Senate bills:
- Medical expense deduction (repealed under House bill, retained through 2018 on the Senate bill)
- Mortgage interest – differences in mortgage interest limits
- Income tax rate structures (the House has four rates, the Senate retains seven)
- Top tax rates for taxpayers (the House is at 39.6 percent, the Senate is at 38.5 percent)
- How long some credits and tax deductions would be allowed. The House would allow certain credits to expire in 2022, while the Senate would eliminate individual tax deductions after 2025
- The alternative minimum tax (the House eliminates it, the Senate retains it with a bigger exemption amount)
Both bills contain increases in the standard deduction.
Also under discussion are provisions that are the same under both pieces of legislation. For example, both the House and the Senate proposed a 20 percent corporate tax rate.
We will keep you informed on the different tax proposals and potential impact to you and your clients. We are closely monitoring progress and will give you important updates as they occur, and, as in previous years, if there are changes to tax law, Intuit ProConnect products will be up to date. Rest assured – you can file your clients’ 2017 tax returns with complete confidence through Intuit ProConnect software.
Check back with the Tax Pro Center for updates on tax reform and the proposed tax bill. If and when tax laws are passed, we will be able to tell you how the tax laws impact you and give you tips on how you can help maximize your client’s tax refund and help them with future financial planning around taxes as an advisor.