Frost Law
The below comparison outlines the “Tax Cuts and Jobs Act” (H.R.1) passed by the House of Representatives on November 16 and the Senate on December 2. Since the two plans differ, they will now be sent to a conference committee where negotiators from both chambers will create a unified bill. After, both parties must approve the bill before it is sent to the president for his signature. If you have any questions or concerns about the proposed tax reform and how it may affect you, please call our office at 410-497-5947.
One of the biggest wins appears to be for married individuals. Both the Senate and the House bills have drastically increased the size of the tax brackets for married filing joint status — effectively eliminating the “marriage penalty.” Most married taxpayers who file jointly should see a significant reduction in taxes. Currently, the top tax bracket of 39.6% kicks in when taxable income exceeds $418,400 for single taxpayers and $470,700 for married couples. In both new bills – the top tax bracket kicks in for single taxpayers when taxable income exceeds $500,000 and for married taxpayers at $1,000,000. Many married taxpayers will now see larger percentages of their income taxed at much lower rates.
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