Republican Tax Bill Overhauls Rules Many Were Counting On<br />Now, Washington is considering changing those rules as part of a $1.5 trillion tax package moving through Congress, targeting for elimination provisions<br />that people like Ms. Vause, Mr. Kepley and Mr. Flanagan relied on to make what they believed were financially responsible decisions.<br />Benjamin Franklin Kepley, 80, a retired Navy surgeon, decided he<br />and his wife could sell their house in Florida and move into a continuing care retirement community because they could deduct a portion of the cost as a prepaid medical expense.<br />But the House version does not include a similar caveat for other changes it makes to individual tax deductions,<br />and most observers expect the deductions for medical expenses, student loan interest, tuition waivers and state and local taxes to go into effect on Jan. 1.<br />Mr. Kepley said he was initially deterred by the cost, but friends who had already made the move explained<br />that it was basically an insurance policy against future health problems and that he could deduct some of the fee as a prepaid medical expense.<br />“But what Congress sometimes tries to do is, if a change is going to affect economic<br />behavior in a predictable way, then they try to make the change prospective.”<br />That is the approach the House bill takes to the mortgage interest deduction, which<br />it proposes capping at $500,000, down from the current limit of $1 million.<br />WASHINGTON — Before pursuing a doctoral degree in art history, Rachael Vause determined<br />that a tuition waiver, a $22,500 stipend and the ability to deduct the interest on her previous graduate school loans would allow her to enroll in a four-year program at the University of Delaware.
