Tax Cuts and Jobs Act: The Complete Bill

• Publisher: Skyhorse
• Year: 2018
• ISBN:
  9781510737303
• Topic: Business
• Subtopic: Taxation
• Index: Business

At the end of 2017, Congress passed the biggest tax plan since 1986. Whether you were for or against the sweeping overhaul, the Tax Cuts and Jobs Act will begin to affect individuals and businesses as early as January 2018. Yet, until now, relatively few people have had access to it or read it. Whether you file on your own, use someone to prepare your taxes, or you are an accountant yourself, to really understand how the bill will affect you means you must dig in. And having this complete resource, including the full text of the bill, will help you navigate its complexities. From dramatic reductions in taxes for corporations and other businesses, to an increase to standard individual deductions, there are many changes that Americans need to understand before the IRS comes calling. With insider analysis and insight from Patricia Cohen, who covers the national economy for the New York Times and whose front-page stories on this topic informed a nation, as well as specific tips from Michael Cohn, editor-in-chief of AccountingToday.com, this is an indispensable reference.

TITLE I

SEC. 11000. SHORT TITLE, ETC.

(a) SHORT TITLE.—This title may be cited as the ‘‘Tax Cuts and Jobs Act’’.

(b) AMENDMENT OF 1986 CODE.—Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

Subtitle A—Individual Tax Reform

PART I—TAX RATE REFORM

SEC. 11001. MODIFICATION OF RATES.

(a) IN GENERAL.—Section 1 is amended by adding at the end the following new subsection:

‘‘(j) MODIFICATIONS FOR TAXABLE YEARS 2018 THROUGH 2025.—

‘‘(1) IN GENERAL.—In the case of a taxable year beginning after December 31, 2017, and before January 1, 2026—

‘‘(A) subsection (i) shall not apply, and

‘‘(B) this section (other than subsection (i)) shall be applied as provided in paragraphs (2) through (6).

‘‘(2) RATE TABLES.—

‘‘(A) MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES.—The following table shall be applied in lieu of the table contained in subsection (a):

‘‘If taxable income is:	The tax is:
Not over $19,050 ………………………………..	10% of taxable income.
Over $19,050 but not over $77,400 ……….	$1,905, plus 12% of the excess over $19,050.
Over $77,400 but not over $165,000 ……..	$8,907, plus 22% of the excess over $77,400.
Over $165,000 but not over $315,000 ……	$28,179, plus 24% of the excess over $165,000.
Over $315,000 but not over $400,000 ……	$64,179, plus 32% of the excess over $315,000.
Over $400,000 but not over $600,000 ……	$91,379, plus 35% of the excess over $400,000.
Over $600,000 …………………………………….	$161,379, plus 37% of the excess over $600,000.

‘‘(B) HEADS OF HOUSEHOLDS.—The following table shall be applied in lieu of the table contained in subsection (b):

‘‘If taxable income is:	The tax is:
Not over $13,600 ………………………………..	10% of taxable income.
Over $13,600 but not over $51,800 ……….	$1,360, plus 12% of the excess over $13,600.
Over $51,800 but not over $82,500 ……….	$5,944, plus 22% of the excess over $51,800.
Over $82,500 but not over $157,500 ……..	$12,698, plus 24% of the excess over $82,500.
Over $157,500 but not over $200,000 ……	$30,698, plus 32% of the excess over $157,500.
Over $200,000 but not over $500,000 ……	$44,298, plus 35% of the excess over $200,000.
Over $500,000 …………………………………….	$149,298, plus 37% of the excess over $500,000.

‘‘(C) UNMARRIED INDIVIDUALS OTHER THAN SURVIVING SPOUSES AND HEADS OF HOUSEHOLDS.—The following table shall be applied in lieu of the table contained in subsection (c):

‘‘If taxable income is:	The tax is:
Not over $9,525 ………………………………….	10% of taxable income.
Over $9,525 but not over $38,700 …………	$952.50, plus 12% of the excess over $9,525.
Over $38,700 but not over $82,500 ……….	$4,453.50, plus 22% of the excess over $38,700.
Over $82,500 but not over $157,500 ……..	$14,089.50, plus 24% of the excess over $82,500.
Over $157,500 but not over $200,000 ……	$32,089.50, plus 32% of the excess over $157,500.
Over $200,000 but not over $500,000 ……	$45,689.50, plus 35% of the excess over $200,000.
Over $500,000 …………………………………….	$150,689.50, plus 37% of the excess over $500,000.

‘‘(D) MARRIED INDIVIDUALS FILING SEPARATE RETURNS.—The following table shall be applied in lieu of the table contained in subsection (d):

‘‘If taxable income is:	The tax is:
Not over $9,525 ………………………………….	10% of taxable income.
Over $9,525 but not over $38,700 …………	$952.50, plus 12% of the excess over $9,525.
Over $38,700 but not over $82,500 ……….	$4,453.50, plus 22% of the excess over $38,700.
Over $82,500 but not over $157,500 ……..	$14,089.50, plus 24% of the excess over $82,500.
Over $157,500 but not over $200,000 ……	$32,089.50, plus 32% of the excess over $157,500.
Over $200,000 but not over $300,000 ……	$45,689.50, plus 35% of the excess over $200,000.
Over $300,000 ……………………	$80,689.50, plus 37% of the excess over $300,000.

‘‘(E) ESTATES AND TRUSTS.—The following table shall be applied in lieu of the table contained in subsection (e):

‘‘If taxable income is:	The tax is:
Not over $2,550 …………………….	10% of taxable income.
Over $2,550 but not over $9,150 …………..	$255, plus 24% of the excess over $2,550.
Over $9,150 but not over $12,500 …………	$1,839, plus 35% of the excess over $9,150.
Over $12,500 ………………………………………	$3,011.50, plus 37% of the excess over $12,500.

‘‘(F) REFERENCES TO RATE TABLES.—Any reference in this title to a rate of tax under subsection (c) shall be treated as a reference to the corresponding rate bracket under subparagraph (C) of this paragraph, except that the reference in section 3402(q)(1) to the third lowest rate of tax applicable under subsection (c) shall be treated as a reference to the fourth lowest rate of tax under subparagraph (C).

‘‘(3) ADJUSTMENTS.—

‘‘(A) NO ADJUSTMENT IN 2018.—The tables contained in paragraph (2) shall apply without adjustment for taxable years beginning after December 31, 2017, and before January 1, 2019.

‘‘(B) SUBSEQUENT YEARS.—For taxable years beginning after December 31, 2018, the Secretary shall prescribe tables which shall apply in lieu of the tables contained in paragraph (2) in the same manner as under paragraphs (1) and (2) of subsection (f) (applied without regard to clauses (i) and (ii) of subsection (f)(2)(A)), except that in prescribing such tables—

‘‘(i) subsection (f)(3) shall be applied by substituting ‘calendar year 2017’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof,

‘‘(ii) subsection (f)(7)(B) shall apply to any unmarried individual other than a surviving spouse or head of household, and

‘‘(iii) subsection (f)(8) shall not apply.

‘‘(4) SPECIAL RULES FOR CERTAIN CHILDREN WITH UNEARNED INCOME.—

‘‘(A) IN GENERAL.—In the case of a child to whom subsection (g) applies for the taxable year, the rules of subparagraphs (B) and (C) shall apply in lieu of the rule under subsection (g)(1).

‘‘(B) MODIFICATIONS TO APPLICABLE RATE BRACKETS.—In determining the amount of tax imposed by this section for the taxable year on a child described in subparagraph (A), the income tax table otherwise applicable under this subsection to the child shall be applied with the following modifications:

‘‘(i) 24-PERCENT BRACKET.—The maximum taxable income which is taxed at a rate below 24 percent shall not be more than the sum of—

‘‘(I) the earned taxable income of such child, plus

‘‘(II) the minimum taxable income for the 24-percent bracket in the table under paragraph (2)(E) (as adjusted under paragraph (3)) for the taxable year.

‘‘(ii) 35-PERCENT BRACKET.—The maximum taxable income which is taxed at a rate below 35 percent shall not be more than the sum of—

‘‘(I) the earned taxable income of such child, plus

‘‘(II) the minimum taxable income for the 35-percent bracket in the table under paragraph (2)(E) (as adjusted under paragraph (3)) for the taxable year.

‘‘(iii) 37-PERCENT BRACKET.—The maximum taxable income which is taxed at a rate below 37 percent shall not be more than the sum of—

‘‘(I) the earned taxable income of such child, plus

‘‘(II) the minimum taxable income for the 37-percent bracket in the table under paragraph (2)(E) (as adjusted under paragraph (3)) for the taxable year.

‘‘(C) COORDINATION WITH CAPITAL GAINS RATES.—For purposes of applying section 1(h) (after the modifications under paragraph (5)(A))—

‘‘(i) the maximum zero rate amount shall not be more than the sum of—

‘‘(I) the earned taxable income of such child, plus

‘‘(II) the amount in effect under paragraph (5)(B)(i)(IV) for the taxable year, and

‘‘(ii) the maximum 15-percent rate amount shall not be more than the sum of—

‘‘(I) the earned taxable income of such child, plus

‘‘(II) the amount in effect under paragraph (5)(B)(ii)(IV) for the taxable year.

‘‘(D) EARNED TAXABLE INCOME.—For purposes of this paragraph, the term ‘earned taxable income’ means, with respect to any child for any taxable year, the taxable income of such child reduced (but not below zero) by the net unearned income (as defined in subsection (g)(4)) of such child.

‘‘(5) APPLICATION OF CURRENT INCOME TAX BRACKETS TO CAPITAL GAINS BRACKETS.—

‘‘(A) IN GENERAL.—Section 1(h)(1) shall be applied—

‘‘(i) by substituting ‘below the maximum zero rate amount’ for ‘which would (without regard to this paragraph) be taxed at a rate below 25 percent’ in subparagraph (B)(i), and

‘‘(ii) by substituting ‘below the maximum 15-percent rate amount’ for ‘which would (without regard to this paragraph) be taxed at a rate below 39.6 percent’ in subparagraph (C)(ii)(I).

‘‘(B) MAXIMUM AMOUNTS DEFINED.—For purposes of applying ...