House Ways and Means Committee approved GOP tax bill

  • The House Ways and Means committee approved the GOP tax bill, the Tax Cuts and Jobs Act.
  • The bill now moves to the full House floor for a vote, possibly next week.
  • The move keeps the Republican timeline for tax reform intact.

The House Ways and Means Committee approved the GOP's tax bill on Thursday, clearing another obstacle for the plan.

The committee voted 24 to 16 to report the bill to the full House on Thursday, with the vote going along party lines.

Most importantly for Republicans, the step keeps the Tax Cuts and Jobs Act (TCJA) in step with their goal to pass it through the House by Thanksgiving.

RELATED: Most tax-friendly states

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Most tax-friendly states in America

10. Delaware

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9. Mississippi

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8. South Dakota.

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7. Alabama

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6. Louisiana

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5. Arizona

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4. Nevada

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3. Florida

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2. Alaska

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1. Wyoming

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While the Ways and Means Committee never threatened to be an impediment to the bill's passage — Republicans have a chokehold on the committee — the committee process resulted in substantial changes to the legislation's text.

Some changes made by the adopted amendments include weakening a proposed excise tax on multinational corporations, raising the threshold on a new tax on private universities' endowments, and a change to the so-called carried interest loophole.

The bill now moves to the full House, where GOP leaders will need to win over a group of noncommittal members to ensure that the bill is passed.

A handful of GOP lawmakers have said they opposed the current version of the TCJA because it would eliminate most of the state and local tax (SALT) deduction. The TCJA would no longer let people subtract sales and income taxes imposed by a state or local government from their federal tax bill, and would only allows for the deduction of property taxes up to $10,000.

RELATED: 10 ridiculous tax loopholes

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10 ridiculous tax loopholes

1. Alaskan Whaling Captain Deduction

Alaskan whaling captains can avoid tax on up to $10,000 of whaling-related expenses per year. Costs they can deduct include purchasing and maintaining the boat, weapons and gear, food and supplies for the crew, and storing and distributing the catch.

Oddly, whaling captains report these costs as a charitable deduction on their tax returns. Unless someone is authorized by the Alaska Eskimo Whaling Commission, however, whaling is illegal in the United States.

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2. NASCAR Track Deduction

When a business pays for capital improvements — like building a new office or buying a new machine — it typically deducts those costs over the life of the asset, which could translate into decades. A special exception exists in the tax code for “certain motorsports entertainment complex property placed into service before Jan. 1, 2017,” which refers to NASCAR tracks and other racing facilities. The exception allows businesses to deduct the costs over seven years, which is much faster than usual.

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3. Hawaii’s Exceptional Tree Deduction

If you take care of an “exceptional tree” in Hawaii, you can deduct up to $3,000 on your state taxes of what it costs you. A local county arborist advisory committee must declare it an exceptional tree and you’ll need an affidavit from the arborist stating the tree’s type and location and what you paid to maintain it. You can take this deduction only once every three years.

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4. Florida’s Rent-a-Cow Deduction

If you live in Florida and want to pay lower property taxes — perhaps on your second home that has a lot of open land — consider renting some cows. Under greenbelt laws, if you use your land for agricultural purposes, your real estate taxes are based on the agricultural value of the land, not its market value.

This deduction doesn’t explicitly state how many cows you have to raise or even that you have to own them. Developers often let a few dozen rented cows roam their land — sometimes even during construction — to lower their property tax bills.

5. New Mexico’s Centenarian Deduction

If you live to be 100 years old, moving to New Mexico will cut your tax bill because you will pay no tax to the state. A caveat: You cannot take the deduction if you claim someone as a dependent. Paying no state income tax might not be a huge break, but if it’s available, take it.

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6. Qualified Performing Artist Deduction

If you’re searching for a tax loophole you can use — one that doesn’t benefit only the 1 percent — the IRS allows qualified performing artists to deduct certain expenses. To qualify, you must have performed for at least two different employers during the year and received at least $200 from each, had business expenses that exceeded 10 percent of your performing arts income and claimed less than $16,000 in adjusted gross income for the year. If you’re married, that $16,000 limit applies to both your spouse’s and your incomes.

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7. Home Landscaping Deduction

If you regularly see clients at your home office, you might be able to write off a portion of your landscaping costs. The IRS allows a deduction for the portion of your home costs that are related to your home office, so as long as you use your home office exclusively for business, you might be able to take this one. If keeping your lawn looking good for your clients is part of the job, you’re in luck.

(Elenathewise via Getty Images)

8. Personal Pool Deduction

Install a pool for medical treatments and you could be in for a big tax break. One taxpayer suffering from emphysema and bronchitis was prescribed swimming by his doctor as part of his treatment, so he built a pool and wrote off a portion of the costs as a medical expense. He could deduct only the amount by which the installation cost exceeded the home’s increase in value, but he did get to include upkeep costs.

See: 19 Medical Expenses You Can Deduct From Your taxes

(ivanastar via Getty Images)

9. Body Oil Deduction

Deducting body oil on your taxes might sound downright crazy, but you might be able to. One professional bodybuilder needed to shine a little brighter during competition so he applied body oil. When tax season rolled around, he included the cost as a business expense. At first, the IRS disallowed the deduction, but the Tax Court approved because using the oil made him more competitive.

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10. Charity Meat Deduction

Meat packers, butchers and processing plants in South Carolina can earn a $75 state tax credit for each deer carcass they process and donate. You must be licensed with the state or the U.S. Department of Agriculture and you must have a contract with a qualified nonprofit that distributes food to the needy. If you use any of the deer for commercial purposes, you will not qualify for the donation.

Up NextTax Deductions 2017 — 50 Tax Write-Offs You Don’t Know About

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The SALT deduction is popular in states with higher taxes like New York, New Jersey, and California. A handful of members from those areas have pushed back against the SALT deduction proposals.

At the same time that the House is advancing its bill, the Senate is expected to roll out their tax reform legislation, which is expected to be wildly different than the TCJA.

The White House released a statement soon after the bill's passage in Ways and Means, applauding the step forward.

"Today's passage of the Tax Cuts and Jobs Act through the House Ways and Means Committee is an important step toward providing historic tax relief for the American people," the statement said.

"There is still much to do, but the Administration remains confident that, through continued cooperation with Congress, we will achieve these priorities this year."

The differences will likely need to be ironed out in a conference committee — all while Republicans hope to get a bill to President Donald Trump's desk by Christmas.

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