Last week, the Senate released its tax proposal. It is a little better for my family than the House proposals and original framework that I blogged about in more detail previously (here and here).
The big beneficial difference for us in the Senate Plan is the change in the child tax credit which increases the phase out level to a million dollars in income so we would now qualify for child tax credits. However, my youngest is 17 next year so we would only get $1,650 credit next year, before dropping to a $500 dependent credit the next year.
Add it all up and my tax increase for next year would be about $2,100 under the Senate bill, compared to my earlier estimates of $3,000 for the House bill and $4,000 for Trump "framework". However, our 2019 tax increase would likely be back over $3,000 as my youngest turns 18.
There are significant differences in the plans on tax brackets, state and local tax deductions, mortgage interest deductions, and business income but these differences would have little or no effect on our personal situation. Under all iterations of the Republican tax bills, we would fall back to the enhanced standard deduction, and thus lose benefits of personal exemptions and itemized deductions. As discussed in earlier posts, this would increase our taxable income by about $30,000, and that is the primary reason our tax bill would increase despite a marginal decrease in rates and elimination of the AMT.
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P.S. (revised 11/22): I deleted a postscript note on taxability of tuition benefits as I received additional information about this item in the House tax bill. It appears my previous interpretation was incorrect.
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