Final Republican Tax Bill – The Details

Corporate Income Tax

  • Flat tax rate of 21% effective January 1, 2018
  • 100% deduction for qualified property through 2022, then phased down over 5 years.
  • Interest expense deduction limited to 30% of adjusted taxable income if average receipts are greater than $25 Million
  • Alternative minimum tax would be repealed
  • The two-year carryback and 20-year carryforward periods would be eliminated, allowing the NOL to be carried forward indefinitely. The NOL deduction would be limited to 80% of the taxable income.


Business Income tax of Sale-Proprietors, S Corporation, & Partnerships

Deduction equal to 20% of their allocable share of business income

Limitations for S-Corp equal to the lesser of:

  1. 20% of allocable share of business income, or
  2. 50% of share of the W-2 wages of the S-Corp.

Limitations for Real Estate Partnerships equal to the lesser of:

  1. 20% of net income, or
  2. 25% of W-2 wages plus 2.5% of allocable share of the unadjusted basis of the building.


Individual Income Tax

Tax brackets would remain at 7, but the rates would be lower for most brackets including

Rate Single Married filing jointly
10% Up to $9,525 Up to $19,050
12% $9,525–$38.7K $19,050–$77.4K
22% $38.7K–$82.5K $77.4K–$165K
24% $82.5K–$157.5K $165K–$315K
32% $157.5K–$200K $315K–$400K
35% $200K–$500K $400K–$600K
37% Over $500K Over $600K


Standard deduction increases to $12,000 for individuals, $18,000 for head of household and $24,000 for married couples filing jointly.

Personal exemptions will be eliminated.

State and local Tax deduction can be combined with property taxes to reach and not to exceed a total amount of $10,000.

Mortgage Interest can be deducted on the interest paid on the first $750,000 of mortgage debt for a first and second home. No home line of equity can be deducted.

Medical expenses above 7.5 percent of a taxpayer’s adjusted gross income can be deducted for 2017 and 2018; 10% thereafter.

Charitable Contributions still allowed

Other miscellaneous itemized deductions Eliminated

Student Loan Interest can continue to be deducted up to $2,500.

Alimony for divorce or separation instruments executed after December 31, 2018, will no longer be deductible by the payer, nor will it be includible in income of the payee.

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