A Brief Backgrounder On The Tax Cuts And Jobs Act Of 2018

January, 2019 by

A Brief Backgrounder On The Tax Cuts And Jobs Act Of 2018

In December 2017, the US Congress passed what is now recognized as the most significant tax reform legislation in more than thirty years. Previously known as “The Tax Cuts and Jobs Act,” the bill was signed into law by President Donald Trump on December 22, 2017.

Passed by the Republican Vote

The road toward signing has been a long and winding one for the bill, which won a 227-203 vote on December 19, solely on Republican support. A few hours after midnight, it breezed through the Senate, garnering a 51-48 vote. The final version, by then a $1.5 trillion bill, was subsequently approved by the House.

The bill came into effect on January 1, 2018. Consequently, taxpayers began to see changes in their taxes throughout the 2018 tax year.

What’s in a Name

Interestingly, the name change had more to do with Senate convention than any objection on the part of the Democrats, none of whom voted in support of the bill. Going by the archaic Byrd Rule, which essentially decreed certain provisions as extraneous, the Republican faction was compelled to change the name of the bill. This also necessitated the removal of two provisions, which the House had to reapprove before a vote could be taken.

Senate Ruling

The Senate decided changes would have to be made to the name of the bill, as well as two provisions. One provision would have allowed homeschooling costs to be paid with funds from 529 savings accounts. The other provision dealt with colleges being subject to a new excise tax.

As recorded in public records, the bill is now named “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”. However, most still refer to it by its less long-winded name, the Tax Cuts and Jobs Act, which has stuck since its introduction in November 2017.

Find out more about how the Tax Cuts and Jobs Act will affect you by visiting the Bharti Sudan CPA website.

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