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National Legislation and Legislation in Other States

Congress

Tax Bill (updated 12/19)

As a result of significant advocacy efforts by grassroots dentists and your ADA lobbying team, Congress is poised to pass a tax bill that we believe will be of value to the vast majority of dentists in this country.  Outlined below are some of the key provisions that may benefit member dentists, their practices and ultimately many patients.

 

Individual Rates:

 

The bill would preserve the seven-rate structure for individuals, while modifying the rates in tax years 2018 through 2025 as follows:

Rate

Joint returns

Head of household

Individuals

10 percent

$0-$19,050

$0-$13,600

$0-$9,525

12 percent

$19,051-$77,400

$13,601-$51,800

$9,526-$38,700

22 percent

$77,401-$165,000

$51,801-$82,500

$38,701-$82,500

24 percent

$165,001-$315,000

$82,501-$157,500

$82,501-$157,500

32 percent

$315,001-$400,000

$157,501-$200,000

$157,501-$200,000

35 percent

$400,001-$600,000

$200,001-$500,000

$200,001-$500,000

37 percent

>$600,000

>$500,000

>$500,000

 

Standard Deductions:

 

The standard deduction would be increased as follows in 2018:

  • To $24,000 from $12,700 for joint filers.
  • To $18,000 from $9,350 for heads of household.
  • To $12,000 from $6,350 for individuals.

 

 

179 Expensing:

The bill expands businesses ability to immediately expense some of the costs of qualifying property such as off-the-shelf computer software and some real property. Currently $500,000 can be expensed unless more than $2 million in property is bought. Under the final tax bill, as much as $1 million could be expensed and expensing would be expanded to include furniture, as well as nonresidential roofs, heating and air conditioning systems, and fire and alarm systems.

 

Cash Accounting:

The bill allows corporations and partnerships with corporate partners with average gross receipts of as much as $25 million (indexed for inflation) to use cash accounting.  The measure would also allow farm corporations and partnerships with gross receipts of as much as $25 million to use cash accounting. Eligible businesses could use cash accounting even if they had inventories.

 

Student Loan Interest Deduction (SLID):

Previous versions of the bill intended to completely repeal the student loan interest deduction.  The final bill retains the student loan interest deduction at its current levels. The bill would also maintain the tax the tuition waivers that graduate students receive from education institutions as income, previous versions had repealed this deduction.

 

Pass-Through Deduction:

The deduction would be limited for certain professional services businesses, including those in health, law and accounting.  It would only be fully available for service businesses with income of $157,500 or less for individual filers or $315,000 for joint/married filers and would phase out for incomes greater than those thresholds.*

 

Outlook:

The House is expected to vote today (Tuesday) and the Senate either Tuesday night or Wednesday. Discussions about a “follow-up” bill to address the need for some “technical changes” are already underway. 

 

Your advocacy efforts were instrumental in ensuring that the tax provisions that would benefit dentists were specifically considered in the development of the final tax bill.  It will be important that all dentists determine their own level of benefit from the final bill -- numerous factors such as geographic location, property ownership, family structure etc., will all play into determining their bottom line tax benefit. 

 

Below are some links to helpful resources regarding the final negotiated tax bill:

 

In Depth Summary of Final Bill:

https://waysandmeansforms.house.gov/uploadedfiles/12.15_tcja_policy_highlights.pdf

Joint Committee on Tax Revenue Table:

https://waysandmeansforms.house.gov/uploadedfiles/12.15.17_jct_score.pdf

Joint Explanatory Statement (pages 28-41):

http://docs.house.gov/billsthisweek/20171218/Joint%20Explanatory%20Statement.pdf

This explanation can be tricky to read – follow the Senate amendments listed and then any changes made by the Conference Committee.

 

*ADA staff will have specifics on the pass-through provision and how it impacts practices sometime in the near future.   

Other States

WI

Wisconsin- SB 572 was filed recently adding to the law passed a couple of years ago that established the Medicaid dental reimbursement pilot project. Under current law, the state pays an increased fee for pediatric and adult emergency dental in four specific counties. SB 572 adds any other counties to this fee increase pilot program where the greatest need for dental care exists, if funding allocated for the reimbursement increase in the existing pilot program exceeds $100,000.

Delta Dental of Wisconsin recently introduced a provider agreement containing a series of provisions that Wisconsin dentists found objectionable. After a significant number of contacts from member dentists, the Wisconsin Dental Association met with Delta Dental of Wisconsin to outline member concerns. On December 15th, DDWI responded with this letter announcing their intention to clarify some provisions of the agreement and amend others.

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