Here’s a quick rundown of 10 (of the many) key provisions in the final bill.
FOR INDIVIDUAL FILERS
1. Lowers (many) individual rates: The bill preserves seven tax brackets, but changes the rates that apply to: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
Today's rates are 10%, 15%, 25%, 28%, 33%, 35% and 39.6%.
2. Nearly doubles the standard deduction: For single filers, the bill increases it to $12,000 from $6,350 currently; for married couples filing jointly it increases to $24,000 from $12,700.
The net effect: The percentage of filers who choose to itemize would drop sharply, since the only reason to do so is if your deductions exceed your standard deduction.
3. Eliminates personal exemptions: Today you're allowed to claim a $4,050 personal exemption for yourself, your spouse and each of your dependents. Doing so lowers your taxable income and thus your tax burden. The GOP tax plan eliminates that option. The doubling both the Standard deduction and the Child Tax Credit is in Lieu of the personal Exemption.
4. Caps state and local tax deduction: The final bill preserves the state and local tax deduction for anyone who itemizes, but it will cap the amount that may be deducted at $10,000. The $10,000 can be from any combination of State and Local Taxes: Income, Property, etc.
5. Expands child tax credit: The credit will double to $2,000 for children under 17. It also would be made available to high earners because the bill would raise the income threshold under which filers may claim the full credit to $200,000 for single parents, up from $75,000 today; and to $400,000 for married couples, up from $110,000 today.
$1,400 of the $2,000 credit will be refundable, meaning a low- or middle-income family will be able get the money refunded to them even if their federal income tax liability nets out at zero before applying the credit.
6. Creates a credit for non-child dependents: The bill would allow parents to take a $500 credit for each non-child dependent whom they're supporting, such as a child 17 or older, an ailing elderly parent or an adult child with a disability.
7. Lowers the cap on mortgage interest deduction: If you take out a new mortgage on a first or second home you would only be allowed to deduct the interest on the mortgage debt up to $750,000, down from $1 million today. Homeowners who already have a mortgage would be unaffected by the change.
8. Curbs who's taxed by the AMT: The bill reduces the number of filers who would be hit by it by raising the income exemption levels to $70,300 for singles, up from $54,300 today; and to $109,400, up from $84,500, for married couples.
FOR BUSINESSES AND CORPORATIONS
9. Lowers tax burden on pass-through businesses: The tax burden on owners, partners and shareholders of S-corporations, LLCs and partnerships -- who pay their share of the business' taxes through their individual tax returns -- would be lowered by a 20% deduction
The 20% deduction would be prohibited for anyone in a service business -- unless their taxable income is less than $315,000 if married ($157,500 if single).
It Includes rule to prevent abuse of pass-through tax break: If the owner or partner in a pass-through also draws a salary from the business, that money would be subject to ordinary income tax rates.
10. Slashes corporate rate: The bill cuts the corporate rate to 21% from 35%, starting next year.