The U.S. Senate passed its tax reform bill early Saturday morning that, like the House bill passed in November, proposes sweeping changes to the tax code. Exactly what legislation reaches the president’s desk, however, remains to be seen.
With the House and the Senate each passing its own bill, the next step is for negotiators from each chamber to meet in committee and agree on a compromise to create one single piece of legislation. Should such a compromise be reached, it will have to pass both the House and the Senate before moving to President Donald Trump for his signature.
When exactly that happens isn’t set in stone. Congress is scheduled to leave for the holiday break on December 15, but House Speaker Paul Ryan and other leaders are considering staying in session past that date to pass a final bill.
While there are plenty of similarities between the two bills, there are also notable differences. The Senate bill keeps seven tax brackets opposed to the House’s four (although the Senate’s percentages are slightly lower than the current brackets). It also delays the reduction in the corporate tax rate to 2019 instead of implementing it immediately, and it raises the child tax credit to $2,000 (instead of the $1,600 specified by the House’s bill).
The Tax Foundation, an independent tax policy nonprofit organization, has released a table detailing the differences between the House and Senate bills. Remember that nothing is finalized at this point, and it could remain that way as we ring in 2018 if no agreement is reached. If you have questions of how this will affect you or your organization, please contact your CPA at James Moore before making any changes.
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