Thursday saw two developments in the tax reform legislative process. The Senate Finance Committee released a proposed tax reform bill, the Tax Cuts and Jobs Act, and the House Ways and Means Committee issued a revised version of H.R. 1, the bill it first introduced last week.

The Senate bill contains many of the same proposals as the House bill, but also differs in several significant respects from the proposed House bill.

At an estimated projected revenue cost over 10 years of $1.46 trillion, the reduction of the corporate income tax rate in the Tax Cuts and Jobs Act, H.R. 1, is the bill's largest single item by forecast negative effect to the federal budget, according to the Joint Committee on Taxation's estimate (JCX-47-17). But the bill contains many other provisions that would affect a large number of businesses, if enacted.

The Tax Cuts and Jobs Act, H.R. 1, released by the House Ways and Means Committee on Thursday, contains a large number of provisions. Many of these would affect individual taxpayers if the bill is enacted.

 

These provisions include new tax rates and a larger standard deduction and the repeal of many deductions, credits, and exclusions that are available under current law. The bill would also repeal the estate and generation-skipping transfer (GST) taxes and the alternative minimum tax (AMT).

The House Ways and Means Committee released draft tax reform legislation on Thursday. The Tax Cuts and Jobs Act, H.R. 1, incorporates many of the provisions listed in the Republicans’ September tax reform framework while providing new details. Budget legislation passed in October would allow for the tax reform bill to cut federal government revenue by up to $1.5 trillion over the next 10 years and still be enacted under the Senate’s budget reconciliation rules, which would require only 51 votes in the Senate for passage. 

Taxpayers who have decided to convert a traditional IRA into a Roth IRA may be wondering if they should take the plunge now and pay tax on the conversion this year, or wait till next year when tax rates may be lower under the reform plan Congress will reportedly consider this fall.