Tax reform: how we got here and what it means for you

Your Guide to State, Local, Federal, Estate + International Taxation

tax reform, Congress, House, Senate, TrumpThis time of year is typically chaotic with the holidays, last-minute shopping and family gatherings. Oh, and then if you are a tax practitioner, such as myself, you have the additional gift from Congress in tax reform. That’s right. The President signed into law last Friday The Tax Cuts and Jobs Act. This is the most significant tax bill in the last 30 years. So, how did we get here?

The House and Senate unveiled tax reform bills this fall and both passed. There were differences in each of the bills. On December 15th, the House-Senate Conference Committee merged both bills into a single piece of legislation to be voted upon. This is where it gets a little strange.

On Tuesday, December 19th, the House passed the bill in the afternoon. As I headed into an hour of tax training at lunch, the television in our lobby was showing the House voting. It would have been fun to watch the voting, but it would have taken much longer than an hour allotted for our training.

On Tuesday evening, the bill headed to the Senate for voting. I figured since this was the most significant tax act since the Tax Reform Act of 1986, I would tune in to CSPAN to watch. After all, in 1986, taxes were not on my mind. I also made some popcorn to enhance my viewing experience. Well, the Senate passed the bill. It was mostly parliamentary procedure and I know the season finale of The Voice was more compelling. However, I did find out on Wednesday that the bill had to go back to the House for another vote. What?

Apparently, the Senate removed a few provisions as they did not comply with their complex budget rules. Among the provisions removed was allowing parents to use an education-savings account for home-schooling their children. So, the House voted again and now we have tax reform.

Stay tuned in the coming weeks right here on Tax Insights for additional tax blogs on various pieces of the tax reform and how they’re going to impact you and/or your business.

Kelly Lynch, CPA