If you’re not aware that Congress is working on a major revision to federal tax law, you’ve not been paying much attention to the news. The House of Representatives passed its version of the Tax Cuts and Jobs Act, then the Senate passed a similar, but not identical, bill. The bill went to conference committee to work out the differences between the House and Senate versions of the bill, and last week the conference committee issued its report. It currently appears that the conference committee’s recommendations will be approved and become law.
If you have the patience and desire to read the committee report, I suggest you skip to the Joint Explanatory Statement of the Committee of Conference that begins page 191 of the report (which is page 205 of the PDF file) . The pages preceding that set forth language to be inserted into the Senate version of the bill, but not the full text of the final bill. On the other hand, you’re looking for a more concise summary of some of the changes that will affect individuals and small businesses, I refer you to a side-by-side comparison of the current law and the law as it is expected to pass, written by Paul Bogdanoff of Bogdanoff Dages & Co. PC, a CPA and my friend of many years.
While the new law does not take effect until the 2018 tax year, some of its provisions may affect decisions you make in 2017. For example, the increase in the standard deduction (from $6,350 to $1200 for a single person, and from $12,700 to $24,000 for a married couple filing jointly) means that many people who are accustomed to itemizing deductions will no longer do so. As a result, those people will no longer receive a tax benefit from charitable contributions or other itemized deductions. Individuals in that category may want to accelerate charitable contributions and other deductible expenditures that are planned for 2018 by making them before the end of 2017.