December 21, 2017 - Congress has passed the Tax Cuts and Jobs Act, clearing the way for President Trump to sign into law the first comprehensive tax reform passed in over 30 years.
“Congress has delivered on our promise to lower taxes for the middle class by reducing rates while preserving the credits and deductions that matter most to the people I represent – like the now-doubled Child Tax Credit. The lowering of marginal tax rates means Americans will receive more money in their paychecks immediately, and at minimum, the first $12,000 to $24,000 of their paychecks will be tax-free. This is a win for the Valley and for everyone who will see an increase in their paychecks in 2018. But the biggest issue in the Valley has always been jobs. This bill will expand exports on the many things we grow in our community, which will allow our local agricultural businesses to be more globally competitive and hire more of our neighbors.”
With the provisions in this bill, the average family of four making $90,000 a year in California’s 10th congressional district will see a savings of $1,279. Specific benefits include the following:
- Lowers individual tax rates to 10%, 12%, 22%, 24%, 32%, 35% and 37%
- Down from 10%, 15%, 25%, 28%, 33%, 35% and 39.6%
- Doubles the Standard Deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples
- Expands the Child Tax Credit from $1,000 to $2,000 for each child and providing new credits of $500 each for other dependents.
- Preserves the Adoption Tax Credit
- Preserves the deduction for charitable contributions
- Preserves the deduction for medical expenses
- Preserves the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes for interest on up to $750,000 of mortgage principal
- Continues to allow people to write off the cost of state and local taxes up to $10,000 for both property and income (or sales) taxes
- Eliminates the ACA individual mandate penalty beginning Jan. 1, 2019
- Lowers the corporate tax rate from 35% to 21%
- Provides a deduction of 20 percent of qualified pass-through income for small businesses
- Allows businesses to immediately write off the full cost of purchases of new or used equipment
- Protects the ability of small businesses to write off the interest on loans
- Retains the tax-preferred status of private-activity bonds to encourage infrastructure investment
- Modernizes our international tax system to prevent double taxation of American businesses
- Returns income trapped overseas to encourage domestic investment
- Includes provisions to prevent companies from hiding U.S. profits in offshore affiliates
Click here to read an explanation of the bill as passed.
Source: Congressman Jeff Denham