There are many drastic changes to current tax law being proposed, but there are a few changes in the House proposal that we haven’t heard much about. Now that the House bill has been passed, we want to point out a few significant items:
- There is 6% add-on tax on incomes over $1,000,000 for individuals and $1,200,000 for couples that phases out the benefit of the 12% tax bracket for high earners, raising their effective federal tax rate in a portion of their income to 45.6%
- There are changes to the capital gain exclusion on the sale of your primary residence
- Must be your primary residence for 5 out the previous 8 years (instead of 2 out of 5)
- Starts to phase out at an adjusted gross income (AGI) of $250,000 for individuals and $500,000 for couples – this means taxpayers with incomes above these limits may owe capital gains tax on the sale of their residence
- Imposing tax on certain employer fringe benefits, such as:
- Dependent care assistance
- Moving expense reimbursements
- Adoption assistance
- Educational assistance
This list is not meant to be a complete list of changes. There are many more major changes. If and when any tax law change is signed into law, we will start blogging about the different changes.
Email your questions in to firstname.lastname@example.org, and we may address some of the topics raised in a future blog post.