Tax Reform 2.0

“These three bills continue to take steps forward for our economy and our country. Over the past year, we have seen jobs created, growth in our economy, and hardworking Americans keep more of the money they earn,” Thornberry said. “It is now up to the Senate to continue this work.”

How will “Tax Reform 2.0” help individuals and their families?

• Permanently extends tax reform provisions that currently expire in 2025, including:
  • Lower individual tax rates and larger standard deduction
  • Higher child tax credit,
  • Doubled estate tax exemption, and
  • Higher alternative minimum tax threshold.
• Allows individuals to deduct their medical expenses if they exceeded 7.5 (instead of 10 percent) percent of their adjusted gross income through 2020.
• Creates a new Universal Savings Account (USA) to offer a fully flexible savings tool that families can use at any time.
• Gives flexibility to also use education savings to pay for apprenticeship fees to learn a trade, cover the cost of homeschooling, and help pay off student debt.
• Allows families to access their retirement accounts on a penalty-free basis to use as they see fit when welcoming a new child into the family, whether by birth or adoption. And allows families to replenish those retirement accounts in the future.

How will “Tax Reform 2.0” help small business?

• Makes the 20 percent deduction for pass-through business income permanent.
• Allows new businesses to write off more of their initial start-up cost.
• Allows start-ups to expand by bringing in new investors without triggering limits on their access to tax benefits like the R&D credit for activities conducted in their early years.
• Helps local businesses provide retirement plans to their employees.

Thornberry also said, “We have seen a lot of positive outcomes from the ‘Tax Cuts and Jobs Act,’ and I am hopeful that we will continue to see a healthier economy, more jobs, and Americans living a higher quality of life.