There are dozens of tax programs slated to expire on New Years Eve. Many would have been extended if the new administration would have been able to pass the B to the 4th legislation.
There are too many to include here, so I’ve chosen those that may have the most impact on your returns.
1 – Research & Development Expenditures
Currently these can be expensed in the year incurred. Beginning next year, they must be spread over five years.
2 – Interest Deduction Limitation
Currently companies cannot deduct interest expenses beyond 30% of EBITDA (Earnings before interest, depreciation, and amortization). Next year, they take out the depreciation component and make it 30% before EBITA.
3 – Child Tax Credit
The expanded Child Tax Credit reverts to its original basis of $2,000 per child with up to $1,400 being refundable.
4 – Earned Income Credit
The Expanded Earned Income Credit reverts back to its original limits.
5 – Child & Dependent Care Tax Credit
Again, this reverts back to its original limits.
6 – Above-The-Line Charitable Contribution Deduction
This was temporarily allowed for taxpayers who didn’t itemize. This goes back to the older rules where one must itemize in order to deduct donations.
7 – Modified Limits on Charitable Contributions
This also reverts back to the older limits.
Let me leave you with this.
As an entrepreneur, we all have the same concerns. Until someone does something about crime, inflation, and increased taxation, we’re going to have difficulties.
I don’t understand why our elected officials can’t focus on the needs of small businesses. We drive the economy.
Big businesses don’t create jobs. We do. Without jobs, America would become a permanent welfare state.
Is that the country we’d like to see in our future? Yet no one seems to be addressing these issues. If anything, the new legislation will make things worse. Included in that legislation for Illinois is the following.
1 – An increase in the minimum wage to $12 per hour.
2 – The end of cash bails for criminals
3 – And increases in taxes
My favorite change is in College Admissions. Public universities must now make standardized test scores optional for undergraduate admissions.
Please allow me to ask a question? Would any of you want me to do your taxes if I hadn’t scored high on standardized tests?
Welcome to a world where every kid gets a trophy.
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 Employee Retention Credits, PPP Loan Forgiveness, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Accounting Solutions Ltd.
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