On December 11, Chairman Dave Camp (R-MI) officially introduced HR 1, the “Tax Reform Act of 2014.” A few of the interesting provisions which would affect individuals, as embodied in this first tax reform volley, about which we will expect to hear more from the new Congress, are:
- Consolidate the present seven individual tax brackets to 3: 10%, 25% and 35%
- Repeal the personal exemption.
- Change the personal residence exclusion by requiring use of such for 5 out of the previous 8 years, and imposing a phaseout for higher income taxpayers.
- Reduce the $1 million debt cap to $500,000 for the mortgage interest deduction.
- Allow charitable deductions for contributions made between January 1 and April 15 of the year following the tax year in question.
- Repeal the personal casualty loss deduction.
- Repeal the deduction for medical expenses.
- Repeal the 2% floor for miscellaneous itemized deductions.
- Repeal the alternative minimum tax.