Individual Tax Reform Comparison
***This blog has been updated on December 21, 2017 to reflect the tax bill passed by Congress***
| Tax Topic | Current Law | CONFERENCE COMMITTEE | House Bill | Senate Bill |
| Individual tax rates | 10%,15%,25%,28%, 33%,35%,39.6% | Changes 7 brackets to: 10%, 12%, 22%, 24%, 32%, 35% and 37% | Changes to 4 brackets: 12%, 25%, 35% and 39.6% | Changes 7 brackets to: 10%, 12%, 22%, 24%, 32%, 35% and 38.5% |
| Standard Deduction | Single: $6,500, Joint: 13,000, Head of Household: $9,550 | Single: 12,000, Joint: $24,000, Head of Household: $18,000 | Single: $12,200, Joint: $24,400, Head of Household: $18,300 | Single: 12,000, Joint: $24,000, Head of Household: $18,000 |
| Personal & dependent exemptions | Indexed for inflation currently at $4,050 | Repealed; reverts to current law starting 2026 | Repealed | Repealed; reverts to current law starting 2026 |
| Gain on Principal Residence | Gain excluded if lived in the house for at least two of the last five year. Exclusion amount for singles: $250,000; Married: $500,000 | The bill preserves current law | Have to live in the house for at least five out of eight years. Also limits the exclusion to one sale every five years | Same as the house bill exclusion |
| Individual AMT | Yes | Exemption is raised through 2025 and then reverts back to current law | The bill repeals it | Exemption is raised through 2025 and then reverts back to current law |
| Investment Income | Short term Capital Gain: Taxed at same rate as your ordinary income; Long term Capital Gain: Taxed at special rates of 0%,15% & 20% | Short term capital gain taxed at lower rates due to changes in brackets. For example, people in previous 15% bracket would now pay tax at 12% (updated bracket) rate | Short term capital gain taxed at lower rates due to changes in brackets. For example, people in previous 15% bracket would now pay tax at 12% (updated bracket) rate | Same as house bill |
| Medical Expense Deduction | Out of pocket expenses in excess of 10% of AGI are deductible on Sch A | Lowers AGI threshold to 7.5% for 2017 and 2018; reverts to current law in 2019 | The bill eliminates this deduction | Lowers AGI threshold to 7.5% for 2017 and 2018; reverts to current law in 2019 |
| Charitable Contributions | LImited to 50% of AGI and can carry over the next five years | No change, but less people will itemize due to higher std. ded | No change, but less people will itemize due to higher std. ded | No change, but less people will itemize due to higher std. ded |
| Mortgage interest deduction | Interest on debt up to $1.1 million is deductible; can take the deduction for principal and one other residence | Interest on up to $750,000 acquisition debt deductible, still applicable to principal and one other residence. Reverts to current law in 2026. | Interest payment deduction on debt up to $500,000 and only for debt on principal residence | Interest on up to $1 million acquisition debt deductible, still applicable to principal and one other residence. Reverts to current law in 2026 |
| State & Local Tax Deduction | Allows state and local tax deduction | Income tax and property tax limited to $10,000 | State income tax eliminated; limited to $10,000 for property taxes | State income tax eliminated; limited to $10,000 for property taxes |
| Alimony Payments | Tax Deductible to get to AGI | The bill eliminates it starting in 2019. | The bill eliminates it | The bill preserves current law |
| Child Tax Credit | Child tax credit of of $1,000 available per child under 17 | Increases credit to 2,000 with $1,400 refundable. Makes credit available to higher income families | Increases it from $1,000 to $1,600. The additional $600 is not refundable. Makes it available to higher income families | Increases it to 2,000 from $1,000. Additional $1,000 not refundable. Allows it for children under 18, up from 17 until 2025. Makes it available to higher income families |
| Education Savings | American Opportunity Credit; Lifetime learning Credit; Tuition and Fees Deduction | The bill preserves current law | American Opportunity available for fifth year at half, Lifetime Learning Credit: Repealed, Tuition and Fees Deduction: Repealed | The bill preserves current law |
| Student Loans | Deductible up to $2,500 to get to AGI | The bill preserves current law | Repeals it | Preserves current law |
| Moving Expense Deduction | Deduct moving expenses related to starting a new job or a transfer to a new location for your current employer. Requirements have to be met in order to take the deduction | Repealed | Repealed | Repealed |