On Thursday September 27, 2018, the House voted to pass the American Innovation Act (H.R. 6756) and the Family Savings Act (H.R. 6757), two of the three bills that make up “Tax Reform 2.0.” On Friday September 28, the House passed the third bill: the Protecting Family and Small Business Tax Cuts Act of 2018 (H.R. 6760). This package of bills makes adjustments to last year’s Tax Cuts and Jobs Act (P.L. 115-97), which represents the most significant tax reform in decades.
The Protecting Family and Small Business Tax Cuts Act makes permanent the lower individual tax rates, expanded standard deduction, capped state and local tax itemized deduction amount and various other provisions from the Tax Cuts and Jobs Act set to expire in 2025. The Family Savings Act of 2018 broadens access to savings plans for retirement and education, including creating universal savings accounts from which individuals can make tax-free withdrawals. The American Innovation Act of 2018 expands new businesses’ ability to deduct start-up costs, with the hope of spurring future innovation and opportunity.
Now that Tax Reform 2.0 has cleared the House of Representatives, the next step is for the bills to go to the Senate. Dixon Hughes Goodman will continue to monitor Tax Reform 2.0 and provide insights into how it could affect your business.