The tax reform legislation that has passed both the Senate and House is poised to alter your tax return in significant and minor ways — from the credits you’re eligible for, to what you can deduct, to the total amount you owe.
However, there are notable differences between the two proposals. In the coming days, you can expect to hear much about these distinctions. The Senate and House will need to merge the two bills into a single version, which will then be voted on by both chambers.
Below, you’ll find a comparison of some significant disparities in how the two bills address individual tax filers.
1. Expiration of individual provisions
Senate: Most provisions will expire in 2025.
House: Many of them are permanent.
2. Health insurance mandate
Senate: Effectively eliminates the mandate by setting the penalty to $0.
House: Retains the mandate.
3. Tax rates and brackets
Senate: Retains seven tax brackets but modifies and generally lowers the rates. The new rates would be: 10%, 12%, 22%, 24%, 32%, 35%, 38.5%.
House: Proposes four brackets: 12%, 25%, 35%, and 39.6%.
4. Standard deduction
Senate: Increases it to $12,000 for single filers (from $6,350); to $18,000 for heads of household (from $9,350); and to $24,000 for joint filers (from $12,700).
House: Raises it to $12,200 for single filers; to $18,300 for heads of household; and to $24,400 for joint filers.
5. Child tax credit
Senate: Boosts it to $2,000 (up from $1,000), but the additional $1,000 is non-refundable, meaning that many low and middle-income taxpayers may not see that increase.
The credit will apply to children under 18 (up from 17) but is only available until 2025.
Grants the full credit to higher-income families.
House: Increases it to $1,600 (from $1,000), but the extra $600 is also non-refundable.
Grants eligibility to higher-income families.
6. New family credit
Senate: Establishes a temporary $500 credit for dependents who do not qualify as children.
House: Sets a temporary $300 personal credit for parents and their non-child dependents.
7. Deduction for mortgage interest
Senate: Maintains the current deduction.
House: Reduces the caps on mortgage interest deductibility from $1 million to $500,000.
8. Medical expenses deduction
Senate: Retains the deduction and temporarily lowers the threshold needed to qualify from 10% to 7.5% of adjusted gross income.
House: Eliminates this deduction.
9. Deduction for teachers’ supplies
Senate: Increases the deduction to $500 (up from $250).
House: Abolishes it.
10. Graduate student tuition waiver
Senate: Maintains the waiver.
House: Eliminates it.
11. Student loan interest deduction
Senate: Keeps it intact.
House: Removes it.
12. Alternative Minimum Tax
Senate: Retains the tax but increases exemption amounts through 2025; after that, they revert to current law.
House: Repeals it.
13. Estate tax
Senate: Increases the exemption to $11 million for individuals and $22 million for couples, protecting more people from the tax.
House: Doubles the exemption for six years and then completely eliminates the estate tax in 2024.
