Here Are Deductions Cut In GOP Tax Plan

WASHINGTON, DC — Itemized deductions many Americans have claimed on their tax returns will vanish in the GOP's rewrite of the tax code, the first overhaul in a generation. The plan, previewed to rank-and-file lawmakers Thursday, resets tax brackets, gives corporations a huge tax break and moves America closer to business-friendly tax laws.

The good news for many middle-incomeAmericans is that they’ll still be able to make up to $18,000 in tax-free contributions to the 401(k) plans, a widely used savings vehicle many have used to tuck away a retirement nest egg. But the not-so-good news is that simplification of the tax code — Republicans say most Americans will be able to file their returns on a postcard-size form — means several deductions they’ve counted on are eliminated.

The elimination of the deductions helps pay for the $1.5 trillion in tax cuts the plan promises over the next decade.

Here’s what the plan, as currently written, could mean to you, according to talking points released Thursday:

• Home mortgage interest: The plan cuts in half the interest deduction on home mortgages, to $500,000 from $1 million.
• Student loan interest: The deduction for interest paid toward student loans is eliminated in the plan as currently written.
• Medical deduction: Taxpayers with high medical expenses will no longer be able to claim a deduction.
• Moving deduction: Anyone who moved to a new home in the past year won’t be able to deduct moving expenses.
• Adoption credit: If you’re planning to adopt one of tens of thousands of children waiting for permanent homes, you won’t be able to claim a deduction.
• Alimony payments: Divorced taxpayers with alimony obligations will no longer be able to claim a deduction.
• State and local tax deductions: Taxpayers will be able to deduct state and local property taxes of up to $10,000, but can no longer deduct income or sales taxes.
• Standard deductions: The standard deduction will nearly double, to $12,000 for individuals and $24,000 for married couples.
• Child tax credit: The per-child tax credit increases to $1,600, up from $1,000.
• Non-child dependent credit: Taxpayers can claim a $300 credit for each non-child dependent or parent, but the credit will disappear after five years.

The Ways and Means Committee will work on finalizing the proposal next week under Republicans' ambitious timetable to get a bill to Trump by Christmas. Republicans say delivering on key campaign promises to cut taxes is important to protect the party's congressional majority in the 2018 midterm elections.

See Also: GOP Tax Cut: Winners And Losers

Also see: GOP Tax Bill Cuts Rates, Popular Breaks

Photo: House Ways and Means chairman Kevin Brady, R-Texas, left, leaves a GOP conference on taxes, Thursday, Nov. 2, 2017, on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin)