Posted on 12/13/2017 10:22:59 PM PST by 11th_VA
Congressional Republicans say they reached agreement on a final tax bill that will provide a new 20-percent deduction for pass-through income from farms and small businesses.
The agreement, which the House and Senate are expected to take up early next week, also calls for doubling the estate tax exemption and will include key expensing provisions that farm groups sought to preserve and expand, lawmakers said.
They said the agreement also would allow deduction of state and local taxes, including income and property taxes, up to $10,000, a concession to lawmakers in high-tax states that could also benefit farmers.
Senate Agriculture Chairman Pat Roberts, R-Kan., said he was confident the legislation would reduce farmers tax bills.
Under the banner of predictability and stability, I think weve made some good progress, Roberts said.
Agriculture Secretary Sonny Perdue said on his Twitter feed that the tax cuts "would make a tremendous Christmas present for Americans, including those in agriculture. Most family farms are small businesses, and they need relief to provide for their families and to reinvest in their own operations."
The pass-through deduction is designed to keep taxes on small businesses in line with the corporate tax rate, which would be cut from 35 percent to 21 percent under the deal, slightly higher than the 20 percent rate included in the bills passed earlier by the House and Senate. The lower corporate rate would take effect in 2018, not 2019, as was in the Senate-passed bill.
The Senate bill included a 23-percent pass-through deduction but that was lowered during negotiations between House and Senate Republicans this week.
Most farms are organized as sole proprietorships, partnerships and S corporations and taxed at individual rates, which currently range from 10 percent to 39.6 percent.
The agreement would set a new top rate of 37 percent. Coupled with the deduction, that would create an effective top rate of 29.6 percent, said Sen. Ron Johnson, R-Wis.
Its not my definition of perfect, but this will still be a strong, pro-growth tax package, said Johnson.
Still unclear is how the 20-percent deduction would be applied to farmer cooperatives. Both the House and Senate bill would repeal the Section 199 deduction that co-ops either pass on to members or retain for internal improvements.
A provision that Sen. John Thune, R-S.D., inserted into the Senate bill would allow co-ops to use the 20-percent deduction, but that wouldnt fully replace the Section 199 deduction, which is applied to domestic production activities, a broader base than taxable income. Thune was seeking to increase the base to which the new deduction would apply.
The House-passed bill would have repealed the estate tax after 2023, but the Senate only doubled the exemption, and that is the provision that will be in the final version, said Sen. John Hoeven, R-N.D.
They said the agreement also would allow deduction of state and local taxes, including income and property taxes, up to $10,000, a concession to lawmakers in high-tax states that could also benefit farmers.
Thanks 11th_VA.
so does this mean up to $10,000 for mortgage interest AND up to $10,000 for state tax/personal property tax? or just total of $10,000 and that’s it?
Are charitable deductions gone?
State and Local Taxes Deduction - Max $10K for all combined.
Charity - Still Deductible, must Itemize (no change)
Child Credit - Doubles from $1K to $2K per child
Better than nothing, better than the $10K on property taxes-only initially proposed by the House, but still a $9K increase in "taxable income" for yours truly in the Peoples Republic of Pennsyltucky.
Some "Christmas present".
HUMBUG.
It’s likely your tax rate will come down however, off setting what you owe (I don’t know the final bands)
I guess their thinking was that poorer religious people don’t live in big homes.
To be honest I don’t live in a big house so I don’t get hit as hard as others.
Sorry to hear what’s happening, but big banks and big business come first to the Uniparty as embodied in Mitch McConnell, Paul Ryan and his lackey, your congressman and mine Scott “Patriot” Perry.
Farms are important but factories aren’t. I don’t get it.
Yup - thanks for the crumbs from your table GOPe.
They know full well that state, local, and property taxes for millions and millions of middle class Americans well exceedes $10K.
And since they screwed with many other things with this tax hike bill, unless you have enough mortgage interest or other deductions, you won't be able to itemize and therefore you won't.
The GOPe even stated that they now believe itemizers will fall to less than 6% nationwide - which was their goal, so they could extract more money from all of us to "pay for" the massive giveaways to the corporates and the donors.
Thanks for posting this!
from the article:
“...They said the agreement also would allow deduction of state and local taxes, including income and property taxes, up to $10,000, a concession to lawmakers in high-tax states that could also benefit farmers. ...”
Ping to deductions for state and local tax being in the tax bill.
http://www.freerepublic.com/focus/f-news/3613434/posts?page=1#1
This is a 4th Amendment violation.
Unequal protection under this law where corporations get to keep ALL of the deductions that have been stripped from W-2 taxpayers.
perhaps you mean the 14th...
What about all of the people who took out Federal Student Loans with the understanding that the interest would be deductible?
What about all of the employees with unreimbursed expenses that could deduct mileage and tolls?
That one alone is going to cost me a 17K deduction.
Lots of people PAY NO TAX or very little tax. This bill is going to KILL ACTUAL TAXPAYERS making over between 100-200K that itemized.
In that the GOP has not done anything about my $6,800 medical deductible up from $500 before Obamacare but has managed to raise my taxes $12,000 a year, I won't be voting for ANY Republicans, ever again.
Familys of 4 are losing deductions for unreimbursed employee expenses, college tuition, medical and dental expenses, state sales taxes (there are no state an local income taxes in Florida), $16K in personal exemptions, capped mortgage interest, casualty and theft, and mortgage insurance premiums.
I will be seeing my taxable income go up $70,000.
This is going to DESTROY the housing market and the value of people homes and play hell with population growth via the loss of personal exemptions for kids, so it has the added effect of further reducing the number or children AMERICAN CITIZENS produce, making us a minority in our own country.
Couple this with the 15% FICA and the OUTRAGEOUS increase in medical deductibles and copays, and this slaughters the very base of Trump supporters in States like Florida.
There will be no second Trump term, Florida is GONE after he signs this, the only real question is whether he will be impeached before he is voted out in 2020.
If I get a tax break -- which I expect to, because almost everyone will receive one, even those living the extremely high tax states, that's a good thing.
If I get less of a tax break because the People's Republic can't ever get its fiscal house in order and spends more money than 47 other states, the problem is with the politicians spending money in Trenton, not with the lack of Federal Income Tax subsidies paid for by citizens in less-taxed states.
If taxpayers in high-tax states have their taxes cut but are reminded that they are taxed too much by their states every April, that's a good thing, not a bad thing. Will it make any difference to the high tax states? Non-taxpayers tend to accumulate in the high tax states to enjoy the lush benefits. However, it will make a lot of difference to the low tax states.
People -- people with income and assets to protect -- have been voting with their wallets and with their feet. (I'll use New York as the example because it's Number One and because the trends have been in place for decades now.) A taxpayer can live very well in New York City -- but it costs much more money than living well in Texas or in Florida.
New York State has lost an amazing 18 seats in Congress (and electoral votes) since 1950. It had 45 congressional districts in 1950. It has 27 districts today. It last had that few in 1813-1823.
By linear extrapolation, by about 2110 New York should be down to a single congressional district. (Also by linear extrapolation, by 2110 New York's combined state and city income tax rates should be about 10,000%.)
I'm happy with any tax cut that I get. I'm not unhappy that someone in a low tax state will receive a bigger tax cut.
If the Hillary bumper stickered Subaru driving snowflakes who hired the Bolsheviks that run Trenton are reminded that they are paying far more in state and local taxes than almost everywhere else in the country, that's good. I already know I'm paying way too much in taxes (And always vote "No" and "Republican".)
What 15% FICA?
As an employee- you should be paying 6.2% FICA & 1.45% Medicare——NOT 15%. IF your employer is deducting 15%- they are totally wrong.
“”What about all of the employees with unreimbursed expenses that could deduct mileage and tolls?””
What kinds of ‘unreimbursed’ expenses are you talking about?
NO ONE who commutes to work can deduct that cost-—no matter who the employer is, if that is what you re referring to.
Please clarify.
IF you are occurring unusual expenses to perform your job, talk to your CPA. Your employer MAY be forced to reimburse you for those costs.
I have done payroll work for a very long time. Get more information.
Hate to be rude, but if you think the FICA portion is coming out of his pocket you are mistaken.
That is money that he might be paying you instead.
When you are self employed, you get to pay the entire thing
Apr 10, 2017 - What is FICA? The Federal Insurance Contributions Act (FICA) tax is a mandatory payroll tax. If you have employees, you must deduct the FICA tax rate from your employees’ wages and pay the IRS. And, you need to contribute a matching amount per employee contribution.
You each also pay Medicare taxes of 1.45 percent on all your wages - no limit. If you are self-employed, your Social Security tax rate is 12.4 percent and your Medicare tax is 2.9 percent on those same amounts of earnings but you are able to deduct the employer portion.
Could cause other Senators to stick in their own giveaways, and could doom any chance of passage.
Form 2106
I take over $70,000 in itemized deductions in total and have been for years.
And my State doesn’t even have State and Local income taxes.
Yeah, I knew you can’t deduct your commute since I first started itemizing.
I think I know what I am talking about.
I use every legal method available to minimize the amount of my taxable income, including working at a profession that the IRS already lost in court when they tried to deny people taking the mileage deduction
I don’t appreciate being robbed.
Those two scumbags Mnuchin and Cohn just robbed me.
Have you ever even been to Washington DC or worked for a Federal Agency?
They are living like kings, and WASTING the money they EXTORT from us.
All the talk about tax cuts is nothing but hot air, and is a discussion all politicians love to have. Its their plum to pit one class against another, and theyll sweep a few crumbs off the table to keep us from rioting.
The real discussion, the one theyre desperately afraid to engage in, is real spending cuts. Cut spending and taxes will take care of themselves.
my husband is an actor among other things. We take unreimbursed employee expense deduction for mileage and tolls for every audition he goes to (per our expensive accountant). It adds up fast. I am self employed, I pay the 15%.
All I can hope is that the other stuff offsets it...unfortunately, there will be people affected who are Trump supporters. Hopefully, they don’t get too ticked off when time to vote. When people see their bottom line get affected well who knows.
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