Compare & Contrast the proposed House and Senate tax bills

November 9 was a busy day in Washington for lawmakers in their race to create a tax reform package. The House Ways and Means Committee made amendments to, and approved, the Tax Cuts and Jobs Act. And the Senate Finance Committee released “policy highlights” for its proposed version of a tax plan.

Many of the House and Senate provisions are similar. For example, both plans would repeal the alternative minimum tax and retain the charitable contribution deduction. However, there are a number of key differences. Here is a high-level comparison of the House and the Senate tax bill proposals:

Individual taxes

The following changes would generally be effective beginning in 2018:

Business taxes

These changes also would generally be effective beginning in 2018, but be sure to note the exceptions:

Next Steps

Despite all of the proposed tax reform activity, there is still a long way to go before a law is passed. The full House of Representatives plans to vote on its bill as early as this week, according to Republican leaders. Senate Finance Committee members said they will make revisions to their plan in coming weeks before crafting a formal bill to be submitted for a full Senate vote.
The House and Senate must reconcile their differences into a single bill that Republican lawmakers hope to vote on before Christmas so that President Trump can sign it by December 31. Meanwhile, lobbyists and special interest groups, as well as taxpayers, will continue to weigh in, and some Republican lawmakers have already expressed opposition to parts of the proposals.
With the significant differences between the House and Senate plans, it remains to be seen whether they will craft a unified bill that can be passed by both chambers by the end of the year.
The SKR+CO tax team is actively monitoring tax reform proposals and will continue to provide updates as new information becomes available.

Judy Kaltenbacher, CPA, Tax Partner
Judy has been in public accounting since 1985, with significant experience serving medical practices, real estate partnerships, S-Corporations, financial institutions, nonprofit organizations and small business clients.