What’s in the GOP tax bill: A cheat sheet

The prime beneficiaries of the House Republicans’ Tax Cuts and Jobs Act are evident when you look at the numbers: It contains $1 trillion dollars in tax relief for corporations and businesses, $228 billion for individuals and $172 billion for estates.

Whether you will win or lose by the bill depends on where you live, whether you itemize deductions, how many kids you have and how you earn your money. Though the plan is likely to change in the coming weeks, here are some highlights as it now stands:

--Tax brackets will be revised to 12 percent (incomes of $0 to $45,000 filing individually and $0 to $90,000 for those married filing jointly); 25 percent ($45,000 to $200,000 indvidual; $90,000 to $260,000 MFJ); 35 percent ($200,000 to $500,000 individual; $260,000 to $1 million MFJ); and 39.6 percent (over $500,000 individual; over $1 million MFJ).

--The standard deduction will nearly double to $12,000 for individual filers and $24,000 for those married filing jointly. Currently, 70 percent use the standard deduction; that figure would likely increase that percentage to 84, and tax filing would be a lot easier for more Americans.

--The child tax credit will rise from $1,000 to $1,600. There will also be a new $300 credit for each taxpayer, spouse and non-child dependent, though it would expire after five years. The threshold for the credit increases to $115,000 for individual filers and $230,000 for those married filing jointly (from $75,000 and $110,000).

--Personal exemptions will be eliminated. For itemizers with three or more kids, the loss of exemptions could offset other reductions in the bill.

--State and local tax deductions would be repealed, with an asterisk. While homeowners in high-tax localities will not be able to deduct state and local income taxes, those who itemize can take a tax deduction for property taxes up to cap of $10,000.

--Mortgage interest will be deductible for loan amounts up to $500,000, down from the current $1 million. The new limit would apply to new purchases after the effective date (Nov. 2), and interest would be deductible only on taxpayer’s principal residence. Existing loans would be grandfathered.

--To qualify for the capital gains exclusion on a home sale ($250,000 for individual filers, $500,000 MFJ), the home seller would have to have used the home as principal residence for five of the previous eight years. (Currently, it’s two of the last five years). Exemption would be phased out a dollar for every dollar by which a taxpayer’s adjusted gross income exceeds $250,000 for individual filers and $500,000 for those married filing jointly.

--Tax on long-term capital gains would not change (top rate: 23.8 percent).

--The alternative minimum tax (AMT) would be repealed. This tax was meant to penalize higherincome taxpayers who used deductions/credits to wipe out tax liability. AMT is expected to hit 4.5 million filers in 2017, many of whom earn $200,000 to $1 million.

--The basic exclusion amount for gift and estate would double, indexed for inflation, as of Jan. 1, 2018 ($11.2 million for individual filers, $22.4 million MFJ). Tax above this amount remains at 40 percent until full repeal in 2024.

--Corporations and businesses will see a permanent reduction of corporate tax rate from 35 percent to 20 percent. S corporations, LLCs, partnerships and sole proprietorships (aka “pass-throughs”) would see a top rate would at 25 percent rate, but only on profits. The rest of the money earned would be taxed as salary and subject to nominal personal income tax rates. Those who provide professional services, such as lawyers, doctors, accountants, consultants and architects, are specifically excluded from the lower rate unless they can prove that they have a capital-intensive business.

--Miscellaneous things repealed: itemized deduction for medical expenses and moving expenses; credit for adoption and alimony payments; and deduction for student-loan interest. Jill Schlesinger, CFP, is the Emmy-nominated CBS News Business Analyst. A former options trader and CIO of an investment advisory firm, Jill covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, “Jill on Money.” She welcomes comments and questions at askjill@ moneywatch.com. Check her website at www. jillonmoney.com