The U.S. Senate late Friday approved its version of the Tax Cuts and Jobs Act by a 51-49 vote. The act contains legislation that would make sweeping changes to business and individual federal tax provisions.
Included are major changes to corporate tax rates and taxation of business pass-through income, as well as individual income taxation. Some changes to tax-preferred savings arrangements are included in the Senate bill, with some potential effect on IRAs, HSAs, employer-sponsored retirement plans, 529 state-sponsored college savings plans, and ABLE accounts for special-needs individuals.
The next step for tax reform legislation is a conference committee process by which the Senate and House-passed versions, which differ in a number of respects, must be aligned. Only when the Senate and House have approved tax reform legislation in identical form can it be signed into law by President Trump.
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