Last night, Chairman Kevin Brady (R-TX) of the House Committee on Ways and Means released the “Retirement, Savings, and Other Tax Relief Act of 2018.”This bill includes several changes to the federal tax code.
- Tax Extenders: The bill would extend a number of tax provisions that expired at the end of 2017. This list of provisions, commonly known as “extenders,” includes provisions related to alternative fuels, private mortgage insurance, and the depreciation of race horses and NASCAR facilities. The provision related to biodiesel would be extended until 2021, and then phased out by 2025.
- Technical Corrections: The bill includes several “technical corrections” to the Tax Cuts and Jobs Act of 2017. It would clarify that qualified improvement property can be immediately deducted and clarifies an issue with the treatment of net operating losses.
- Retirement Savings: The bill includes several changes to the administration of retirement accounts, particularly as they relate to small employers. Additionally, individuals would now be able to withdraw up to $7,500, without penalty, from retirement accounts for the birth or adoption of a child. It would also allow individuals to contribute to traditional Individual Retirement Accounts (IRAs) past the age of 70½.
- Miscellaneous Other Provisions: The bill would include a provision allowing start-up businesses to deduct up to $20,000 in start-up expenses. This provision was previously included in the Tax Reform 2.0 package released earlier this year. It also provides disaster relief assistance to individuals impacted by natural disasters in 2018, including Hurricanes Florence and Michael, western wildfires, and weather events in Hawaii.
The bill also includes a few other provisions related to disaster relief areas and the administration of the Internal Revenue Service (IRS). The IRS would be required to submit a plan to improve its customer service within a year and a full plan to overhaul the entire agency by September 2020.
This bill will be considered by the full House of Representatives later this week, before heading to the Senate. Its passage in the Senate, however, is far from certain. We’ll continue to monitor developments and update our analysis over the coming days.
Reprinted with permission from - Tax Foundation - by Nicole Kaeding