As the Republican-backed bill moves forward in the House, the proposed tax cuts under the measure include some new and surprising changes that could impact the wallets of millions of Americans.
On Wednesday, a House committee voted in favor of the bill, which would permanently reduce Mr. Trump’s 2017 tax cuts, while also adding many other reductions.
Extension of the Tax Cuts and Jobs Act 2017 will mean most taxpayers I won't see much change Since the layoffs took effect in 2018, their tax phase will remain the same level they are at. According to an analysis by the non-partisan tax foundation, more than 6 out of 10 applicants will face an increase in tax revenue in 2026.
In addition to extending the 2017 tax cut, the bill would also provide taxpayers with a $1,300 tax cut, according to the House Methods and Means Committee. Some additional tax cuts include taxes that Mr. Trump promised during his campaign, such as eliminating taxes on overtime pay, and new rules that will lower taxes for seniors and parents.
The proposed bill may change as it changes Pass the legislative processHouse Speaker Mike Johnson, a Republican from Louisiana, aims to send it to the Senate on Memorial Day. Democratic lawmakers oppose the bill Proposed Medicaid and food stamps, which are part of the Republican goal, are designed to find $880 billion in savings to help pay tax cuts.
Some Democrats also pointed out that some of the tax cuts Mr. Trump promised, such as eliminating taxes targeting skills, would expire after 2028, limiting benefits.
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New deductions can be used by persons who have itemized or taken standard deductions. However, there will be an income limit, which will deduct $4,000 deduction for a single filer with revised gross income of $75,000 or less, and provide married couples with $150,000 in income.
Tax relief will begin from the current 2025 tax year and be extended to 2028.
By contrast, for older people, the latest version of the House bill has a notable omission: There is no such plan, as Mr. Trump promised on his campaign.
Proposing a proof of income tax on social security is controversial because these taxes Direct funding for retirement plans. That might speed up Bankrupted Trust Fundpolicy experts have warned.
The current standard deductions expanded under the 2017 Tax Act will expire on December 31. The House Republican bill would make tax cuts and the larger deductions of the Jobs bill permanent and promote it.
From the current 2025 tax year to 2028, this is how the standard deduction is:
Standard deductions reduce your tax liability because it can reduce your taxable income to that amount. For example, a single taxpayer who earns $50,000 reduces his taxable income to $34,000 in the 2025 tax year based on the proposed standard deduction.
The House bill also extends the $2,000 child tax credit that would otherwise return to its pre-tax cuts and employment bill levels, with eligible children starting in 2026 each year. This change will be permanent.
The proposal will also increase the child tax credit to $2,500 per child in the current 2025 tax year in 2028, and will then drop to $2,000 afterwards.
The proposed legislation will also be repealed Controversial Rules That would require payment platforms like Venmo or PayPal to send 1099-K tax forms to anyone who receives over $600.
Previously, such payment services required only over 200 transactions to in-house tax services, with revenues of more than $20,000. The IRS has Delayed implementation In the $600 rule, after some online platforms and the withdrawal of Republican lawmakers.
The passing deductions for small businesses under the Tax and Employment Act will also be increased under the House bill.
The deduction allows small businesses, including partnerships, sole proprietorships (usually gig workers) and S companies to subtract 20% of their qualified business income from taxes, thus reducing tax liability. Under the new bill, the deduction will increase to 23%.
This is a pledge to cancel taxes on tilting incomes under Mr. Trump’s campaign commitment, but only from the current 2025 tax year to 2028.
According to the summary of the House Methods and Means Committee Act, the provision will provide “deductions for qualified tips” for qualified tips received in a profession.
Another proposal from Mr. Trump - eliminating taxes on overtime pay for qualified workers - will also become a reality, but only for three years.
Under the House Bill, the online deduction for OT will be created from the current 2025 tax year to 2028.
House bills will also eliminate taxes on car loan interest by allowing consumers to deduct up to $10,000 in vehicle loan interest.
This would have an income limit for the revised adjusted total income for a single filer that exceeded $100,000, and taxpayers for married couples were eliminated. Vehicles must be assembled in the United States to obtain deductions.
This tax relief can only continue from the current 2025 tax year to 2028.
According to TCJA, the estate tax exemption has temporarily doubled, but the rule is scheduled to expire at the end of 2025. In the current tax year, individual gifts and inheritance rights are given to individuals up to $14 million, and married couples $28 million exempt from federal gifts or real estate taxes.
If not changed, the threshold will return to its former-TCJA level, or an individual of approximately $7 million.
The new bill will permanently extend the higher estate tax exemption while increasing it to a single filer of $15 million and provide $30 million to married couples starting in 2026. After that, the exemption will be designated as inflation.