Here it is- full text

[kathyc2]

http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf

[kathyc2]

IMO, what was supposed to be a major rewrite of code has basically boiled down to a huge C corp rate cut, slightly lower rates for all but lowest income individuals and a higher child tax credit with higher phaseout. And of course the elimination of personal exemptions and higher standard deduction.

Items that were eliminated in House bill that did not make it to the consolidated bill include:
Extra standard deduction for blind/elderly
Credit for elderly and disabled
Credit for plug in vehicles
Lifetime credit
Tuition deduction
Series EE bonds for higher education
Student loan interest deduction
Employer assistance education tax free
Sch A medical expenses
Archer MSA
Employer adoption assistance
Educator 250 deduction
AMT- stays but with revised amounts
Estate tax- stays but with revised amounts
Changes to 121 exclusion in House bill did not make cut

Consolidated bill items eliminated, changed or added:
Moving expense deduction and tax free employer assistance gone except for military
$500 credit for other dependents
Sch A 2% misc deductions eliminated
Sch A max of combined 10K state/local tax
Sch A HE interest eliminated
Casualty losses gone except for in declared disaster areas
Alimony deduction for new or modified agreements gone. Stays for alimony agreements in place.
Preparer due diligence for HOH filers
ACA "penalty" gone beginning in 2019

On first read the pass through/SP deduction sounds like a modified DPAD deduction. Quite comical as Paul Ryan said the DPAD should be eliminated because no one understands it!

[taxea]

I'll wait until Trump signs it before I bother with the changes.

[kathyc2]

Agree! I'm not going to chase rabbits at this stage.

FWIW, I could have sworn some "knowledgeable sources" stated over the weekend that medical expense deductions and student loan interest **DO** remain.
Thought the Obamacare penalty ended as of 01/01/2018 ??

Remains to be seen how the "what exemptions?" approach works. I guess the CTC irons that out, to include Joe with very little "income" who claims six children and gets a nice fat check from Uncle Sam.

FE

Yes, medical and student loan deductions stay, which is exactly what I said. The first section was items that were eliminated in House bill that did not make it to final bill. IOW, they were not eliminated.

As far as the ACA mandate:
"The Senate amendment reduces the amount of the individual responsibility payment,
enacted as part of the Affordable Care Act, to zero.
Effective date.−The provision is effective with respect to health coverage status for
months beginning after December 31, 2018."

Quote is copied from explanation section of link.

[OHIOTAXMAN]

Are All 2106 Expenses Wiped Out?

Like Truck Driver's Per Diem.

[kathyc2]

Like Truck Driver's Per Diem.

Gone. Page 99 of explanatory text:

Senate Amendment
The Senate amendment suspends all miscellaneous itemized deductions that are subject
to the two-percent floor under present law. Thus, under the provision, taxpayers may not claim
the above-listed items as itemized deductions for the taxable years to which the suspension
applies. The provision does not apply for taxable years beginning after December 31, 2025.
Effective date.−The provision is effective for taxable years beginning after December 31,
2017.
Conference Agreement
The conference agreement follows the Senate amendment.

[OHIOTAXMAN]

Thanks

This is going to be rough on Truck Drivers, Airline Pilots, and Construction workers who travel to their job sites.

[Twin Turbo Z]

This is going to be rough on Truck Drivers, Airline Pilots, and Construction workers who travel to their job sites.

I have a few of those !! Crap !!

[kathyc2]

Obviously you can't change which year a per diem expense incurs. However, they could make a prepayment of 2018 expenses such as investment advisory fees, tax prep fees, etc in CY 2017 to have the payment in a year where there is a tax benefit.

[WICPA]

Obviously you can't change which year a per diem expense incurs. However, they could make a prepayment of 2018 expenses such as investment advisory fees, tax prep fees, etc in CY 2017 to have the payment in a year where there is a tax benefit.

Be careful there. I have had clients prepay their 2018 state income taxes and now have found the new bill will not allow taxpayers a deduction in 2017 for prepaid 2018 state taxes.

[kathyc2]

Be careful there. I have had clients prepay their 2018 state income taxes and now have found the new bill will not allow taxpayers a deduction in 2017 for prepaid 2018 state taxes.

Read section 11042. It only speaks to state or local tax, not items such as advisory fees or tax prep fees.

[dtlee]

IMO, what was supposed to be a major rewrite of code has basically boiled down to a huge C corp rate cut, slightly lower rates for all but lowest income individuals and a higher child tax credit with higher phaseout. And of course the elimination of personal exemptions and higher standard deduction.

Items that were eliminated in House bill that did not make it to the consolidated bill include:
Extra standard deduction for blind/elderly
Credit for elderly and disabled
Credit for plug in vehicles
Lifetime credit
Tuition deduction
Series EE bonds for higher education
Student loan interest deduction
Employer assistance education tax free
Sch A medical expenses
Archer MSA
Employer adoption assistance
Educator 250 deduction
AMT- stays but with revised amounts
Estate tax- stays but with revised amounts
Changes to 121 exclusion in House bill did not make cut

Consolidated bill items eliminated, changed or added:
Moving expense deduction and tax free employer assistance gone except for military
$500 credit for other dependents
Sch A 2% misc deductions eliminated
Sch A max of combined 10K state/local tax
Sch A HE interest eliminated
Casualty losses gone except for in declared disaster areas
Alimony deduction for new or modified agreements gone. Stays for alimony agreements in place.
Preparer due diligence for HOH filers
ACA "penalty" gone beginning in 2019

On first read the pass through/SP deduction sounds like a modified DPAD deduction. Quite comical as Paul Ryan said the DPAD should be eliminated because no one understands it!

Thanks for this summary.

Thanks.

[Burke]

What is the difference between "prepaying" 2018 state income taxes during 2017 versus making the #4 2017 state estimated tax payment before 12/31/2017?

If you are referring to state income taxes for calendar year 2018 (otherwise due by spring of 2019) then I can see your point.

Getting to a real world scenario: It is unlikely that, after tax year 2017, I will be able to itemize my deductions. I expect to have a state balance due (without underpayment penalty = "planned") for calendar year 2017. Should I choose to do a rough calculation of the 2017 state balance due and then remit it to the state by 12/31/2017, are you now saying that is an invalid itemized deduction for my 2017 Schedule A?Yeah. .. I'm greatly confused.FE

I recently read that although prepayment of 2018 income taxes were prohibited, there is no reason you can't make a 4th qtr state estimated payment by 12/31/17 and deduct it this year. If you have an overpayment when you file, I suppose you could apply any excess to 2018 return. Why not? Of course any refund beyond the actual 2017 tax and the amt paid would be income reportable in 2018 if you itemized this year. So, would it be worth it?

[kathyc2]

I recently read that although prepayment of 2018 income taxes were prohibited, there is no reason you can't make a 4th qtr state estimated payment by 12/31/17 and deduct it this year. If you have an overpayment when you file, I suppose you could apply any excess to 2018 return. Why not? Of course any refund beyond the actual 2017 tax and the amt paid would be income reportable in 2018 if you itemized this year. So, would it be worth it?

In theory, there would be some benefit to over pay 2017 tax as 2018 marginal rates would be lower. TP would just need to be careful as to how overpayment would affect 2018 AGI dependent items.

[Y2KEA]

To Pay or Not to Pay

I recently read that although prepayment of 2018 income taxes were prohibited, there is no reason you can't make a 4th qtr state estimated payment by 12/31/17 and deduct it this year. If you have an overpayment when you file, I suppose you could apply any excess to 2018 return. Why not? Of course any refund beyond the actual 2017 tax and the amt paid would be income reportable in 2018 if you itemized this year. So, would it be worth it?

A valid point but consider the following:

I make Q4 state payment by 12/31/17. This results in an overpayment of $500.
IRS disallows the extra $500 overpayment as a schedule A deduction.
Therefore it is not a taxable refund in 2017.