The table below compares the current law to the House and Senate Conference report released December 15, 2017.

Current law Conference report
Personal tax rate Seven tax brackets: 10%, 15%, 25%, 28%, 33%, 35%, 39.6% Seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37% (expires 2025)
Sole proprietorship and pass through tax rate 39.6% 20% deduction for qualifying domestic non service business income including architects and engineers; small services qualify (expires 2025)
Max corporate tax rate 35% 21% beginning 2018; reduce 80% dividends received deduction to 65% and 70% to 55%
Depreciation Section 179 limit $500,000 Immediate expensing of most property through 2022 (excludes structures); Section 179 limit increased to $1 million. Certain real property improvements qualify
Mortgage interest Deductible on up to $1.1 million debt Deductible on up to $750,000 of new debt; old debt limit to remain at $1.1 million (expires 2025)
Personal state income and property tax Allowable as an itemized deduction Allowable up to $10,000 (expires 2025)
Business Interest Generally deductible Ave gross receipts greater than $25 million limitation on net interest deductible to 30% of adjusted taxable income (EBITDA) thru 2022, then EBIT thereafter
Cash method of accounting Generally limited to businesses with less than $1 million, $5 million, or $10 million in revenue depending on the facts Expanded to include businesses with less than $25 million in revenue
Domestic production activities deduction Domestic producers eligible for 9% deduction of qualifying income Repealed after 2017
Alternative minimum tax (AMT) Corporate AMT: 20%, Personal AMT: 26%/28% Repeal corporate AMT, increased personal exemption amounts (personal expires 2025)
Gift and estate tax Tax up to 40% on gifts and estates,     subject to $5.45 million lifetime exemption per spouse Liftetime exemption doubled, estate tax remains (expires 2025)
Health Insurance Mandate Mandatory health insurance coverage Repeals mandate beginning 2019
Net operating losses Allowed two years back and twenty years forward to offset up to 100% of taxable income Carried forward only indefinitely and offset up to 80% of taxable income
Business entertainment expenses 50% deductible Non deductible
Self created property Capital gain on sale Ordinary income on sale
Employer paid Family and Medical leave wages No credit Eligible employers receive 12.5% or greater tax credit

Richard Huffman, CPA, MST
Tax Partner

Wright Ford Young & Co
(949) 910-2727
16140 Sand Canyon Avenue
Irvine, CA 92618-3715