Trump says 'Obamacare' is repealed. It isn't.

Lawrence Kim
December 24, 2017

The bill will be signed into law by President Donald Trump.

After more than three decades waiting for comprehensive tax reform, Congress is poised to accomplish a rare feat in Washington: pass meaningful legislation that provides a real boost for American families and businesses.

The bill passed in the House in a 224 to 201 vote.

US President Donald Trump today signed the Tax Cuts and Jobs Act into law, which, among other things, slashes the corporate tax rate, and completely changes the US worldwide tax system.

Here are the key takeaways of the tax bill.

According to the liberal Tax Policy Center, over 80 percent of tax units will receive a tax cut averaging $2,140, while just 4.8 percent of units will see a tax hike.

But how much relief the bill brings is dependent upon various factors, including what people earn, how many children they have, and whether they use certain deductions. The new rates start at 10 percent and rise to 12, 22, 24, 32, 35 and 37 percent. For joint filers, the threshold is $600,000.

Will I still be penalized if I don't have health insurance?

The individual mandate is the corrupt beating heart of Obamacare - the idea that people should be required to buy overpriced insurance products they don't want or pay a penalty tax.

Another relief for businesses provided by the bill is the elimination of the corporate alternative minimum tax (AMT), which was included by the Senate under its revisions. It raises the exemption to $500,000 for single taxpayers and $1 million for couples.

We engaged our colleagues and outside stakeholders to maintain the Historic Tax Credit, an investment and jobs program that has brought thousands of historic buildings back to useful life across the country.

Under the new bill, taxpayers can claim a $2,000 credit for each qualifying child under the age of 17.

The new bill keeps the estate tax at 40 percent but doubles the exemption levels - which are now at $5.49 million for individuals and $10.98 million for married couples.

Under the finalized bill, families can deduct up to a total of $10,000 in local property and state and local income taxes.

The new law is expected to be implemented in time for February paychecks, and I recommend filling out a new W-4 form as soon as the IRS makes it available to be sure your adjusted withholding is accurate.

The limit for deductions for mortgage debt drops from $1.1 million to $750,000 for any debt incurred after 2017.

How are pass-through provisions affected?

A worrying matter is that a corporate tax cut happening at once in the United States, whose rate is the highest among major nations, may accelerate the global competition in carrying out tax reductions.

The act is a legislative victory for farmers, most of whom file their taxes as small business owners, and who desire a chance to give less of their bottom line to the federal government. In this bill, you'll see your standard deduction almost double, from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for couples filing jointly. The legislation also protects and preserves the deduction for medical expenses, a critical deduction for families struggling with catastrophic injuries and medical costs.

The new tax bill keeps the current deductions for student loan interest.

If you have expensive medical bills, this portion of the bill could be beneficial to you.

Other reports by Click Lancashire

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