U.S. House Passes Three Tax Bills
Last week, the U.S. House of Representatives passed three pieces of tax legislation: H.R. 6756, the American Innovation Act, which was passed on a bipartisan 260-156 vote; H.R. 6757, the Family Savings Act, which passed with the support of 230 Republicans and 10 Democrats; and H.R. 6760, the Protecting Family and Small Business Tax Cuts Act, which passed 220-191. That bill would would make permanent the individual and small business tax cuts that were passed in 2017 and will expire at the end of 2025. It also would make several other features of that bill permanent, including: $10,000 cap on state and local tax deduction; lower mortgage interest deduction; expanded standard deduction; and the expanded child tax credit. It also would extend the newly-expanded medical expense deduction until 2020.
H.R. 6757 would expand access to new and existing retirement savings vehicles. It also would help local businesses provide retirement plans to their workers and helps workers participate in retirement plans and create small universal savings accounts in which individuals would be able to contribute up to $2,500 into accounts on an annual basis, with any withdrawals being tax free.
H.R. 6756, American Innovation Act of 2018, aims to spur innovation by allowing businesses to deduct the lesser of their start-up expenses or $20,000 for firms with less than $120,000 in expenses. For firms with more than $120,000 in expenses, those costs that could not be deducted immediately could be amortized over 180 months.
There is no similar legislation in the Senate and that chamber likely won’t consider additional tax legislation by the end of the 115thCongress this December. If the Senate does not act, lawmakers will have to reintroduce the package when the 116thCongress begins in January 2019.