The House Ways and Means Committee marked up the tax package earlier this week. I’m not going to go through all of the provisional changes in the bill.
They’re too numerous to detail given the constraints of time and sanity. But the following is a small taste of the contents in the markup, which include…
For Individuals
1 – Making permanent most of the individual expiring provisions of TCJA including the higher standard deduction
2 – Adding a higher senior bonus deduction of $4,000 that phases out at higher incomes
3 – Increasing the SALT Limitation to $30,000.
4 – Increasing the Child Tax Credit to $2,500. It further adds a requirement that all parents and children claiming the credit must have a valid Social Security Number, making the credit impossible for many immigrants.
5 – Illuminating the tax on many cash tips, overtime, and car loans from 2025 – 2028
6 – Increasing the credit for Estate and Gift Taxes to $25M in 2025 and indexing it for inflation thereafter
For Businesses
1 – Reinstating the ability to deduct Research and Development Expenses from 2025 – 2029 without amortization
2 – Increasing the limit on Section 179 – Rapid Depreciation to $25M
3 – Changing the reporting threshold on Form 1099 – K transactions from $600 back to the higher limit
Energy Tax Provisions
1 – Ending many of the Electric Vehicle, Residential Energy, and Hydrogen Production Tax Credits
2 – Phasing out of the Advanced Manufacturing Production Credit
3 – Adding a foreign ownership limitation of most energy credits
I want to be clear that this bill still has a long way to go before being signed into law. Democratic opposition to it has been almost universal.
The GOP maintains a small margin of votes in both houses. Each yea is important, making even the most Junior Member of either house a king in negotiations. As such, many things will probably change if it passes at all.
Now isn’t the time for any of us to begin tax planning based on a bill that hasn’t been signed into law. I just wanted you to get a clearer picture of what’s on the table to begin the thought process.
Let me leave you with this…
We just celebrated Mother’s Day and I’ve been remembering one of my family’s stories.
Forty years ago when I went to college, my Mother became an empty nester. She didn’t want to spend Mother’s Day alone, so she began a tradition where she’d take my Grandmother to Vegas every year for the holiday.
They bought front row seats to the Liberace Show at The Hilton that first year. If you were seated in the front row, after the show you were invited backstage to meet the star.
So they went backstage and told him that they were there celebrating Mother’s day. He immediately got behind one of his glittering pianos and serenaded them by singing that old Connie Francis single “Mama”.
I would have given anything to be there. Granny spoke about that day until she died at the age of 93. Mama passed away as well.
Take a moment and call your Mother and your Father.
Terrible things happen in families. Ugly things are said, but once they’re gone you can’t right a wrong. No matter what’s happened in your life, let them know how much you love them.
You’ll be glad you did.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
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