Senate Tax Bill Passes on December 2nd - 10 Key Points

Senate Tax Bill Passes on December 2nd - 10 Key Points

The Senate passed its tax bill on December 2nd by a 51-49 margin. Some key points include:

  1. Pass-through deduction raised to 23% from the originally proposed 17.4%. Notably - this excludes "specialized service businesses" as defined.  
  2. Property tax deductions maintained with a $10,000 limit. Removes ability to deduct all other state and local taxes.  
  3. Medical expense deductions maintained subject to income level limitations.
  4. Starting in 2019, C corporation tax rate to 20% relative to today's top marginal rate of 35%. Bill crafted to make this cut permanent.  
  5. Top marginal personal income tax rate to 38.5% from today's 39.6%. Most changes on personal side expire on 1/1/2026. Standard deduction doubles to $12k and $24k for individuals and married couples, respectively. Personal exemption of $4,050 eliminated.
  6. Estate/GST exclusion amounts doubled to $11mm and $22mm for individuals and married couples, respectively. However, the new higher limits are set to expire on 1/1/2026. Step-up in basis at death maintained, a critical point.
  7. Obamacare mandate repealed.
  8. Child tax credit doubled to $2,000 from $1,000 today. Income level at which this is phased out jumps to $500k per married couple from $110k today.  
  9. Companies may repatriate overseas profits at a one-time rate of 14.5% for cash and 7.5% for non-cash assets.  
  10. Full capital expensing allowed for five years, then scaled back gradually thereafter.



About MPI

MPI, a prestigious national consulting firm founded in 1939, specializes in business valuation, forensic accounting, litigation support and corporate advisory work. MPI provides fairness opinions, sell-side and buy-side advisory services through its investment banking affiliate MPI Securities, Inc. MPI conducts every project as if it is going to face the highest level of scrutiny, and its senior professionals have extensive experience presenting and defending work product in front of financial statement auditors, management teams, corporate boards and fiduciaries, the IRS, other government agencies, and in various courts.