Attention Business Owners - Important Tax Relief Available Only if Congress Hears from You

On January 31, the House of Representatives overwhelmingly passed H.R. 7024, the Tax Relief for American Families and Workers Act of 2024 (357 to 70). H.R. 7024 covers a few important pieces of tax law, including reestablishing immediate expensing for R&D, a return to 100% bonus depreciation, and increasing the Child Tax Credit. The legislation now moves to the Senate, requiring 60 votes to pass.

Some senators have stated objections to the expansion of the Child Tax Credit. There has been chatter from select senators calling for hearings and pledging to block the bill from a floor vote unless they can amend it. McGuire Sponsel* has been supporting The Main Street Innovation Coalition in seeking a repeal of 174 amortization requirements. We have made much progress in meeting with our elected representatives and educating them on the importance of repealing the 174 requirements. 

*H&CO utilizes certain specialty tax firms to support its sophisticated clientele. McGuire Sponsel is one of them.

In addition to our efforts, we ask that you complete this letter and send it to Senators Marco Rubio and Rick Scott in support of the U.S. Senate’s version of H.R. 7024.

Here is their contact information:

Senator Marco Rubio
Tax Staff: Peyton Roth
peyton_roth@rubio.senate.gov

Senator Rick Scott
Tax Staff: Katie Weissert
katie_weissert@rickscott.senate.gov

Lastly, we encourage you to join our small-business petition, including your contact information. Please send this to others in your network impacted by this issue and ask that they add their signatures, too.

You might also read Checklist for tax deadlines 2024: what you should keep in mind

Enhanced Child Tax Credit

The legislation aims to broaden the scope of the Child Tax Credit, offering increased assistance to families in the workforce. Key provisions encompass:

• Increase in Refundable Portion: The refundable portion of the Child Tax Credit will see a gradual rise from 2023 to 2025, providing additional financial support to families.
• Equity for Larger Families: Adjustments will be implemented to ensure fairness for families with multiple children.
• Flexible Income Assessment: Taxpayers will have the option to use either their current or prior-year income to calculate the Child Tax Credit in 2024 and 2025, allowing for flexibility in determining eligibility.
• Inflation Adjustment: Beginning in 2024, the Child Tax Credit will be adjusted for inflation to keep pace with the increasing cost of living.

Business tax relief

The legislation contains measures to assist businesses and stimulate economic growth. Key components consist of:

• Research and Experimental Expenses: The bill allows businesses to immediately deduct research and experimentation costs, fueling innovation and creativity.
• Bonus Depreciation: Continuing the trend, 100% bonus depreciation is extended through 2025, giving businesses the green light to fully write off qualified property expenses.
• Increased Section 179 Deduction: With a higher deduction limit for eligible property, businesses gain more wiggle room in deducting their investment outlays.
• Interest Deductibility: Businesses can now deduct interest expenses, aiding them in meeting payroll demands and expanding their operations.

You might be interested in reading Accumulated Depreciation and Depreciation Expense: A Complete Guide

Employee Retention Tax Credit (ERTC)

To combat fraudulent claims associated with the ERTC, the Tax Relief for American Families and Workers Act implements measures to enhance penalties for deceptive promoters. Additionally, it expedites the deadline for submitting new claims for the ERTC. These adjustments are aimed at upholding the credit's integrity while continuing to support businesses that rely on it.

Adjustments to 1099-MISC and 1099-NEC filing thresholds

The legislation acknowledges the shifting business environment by adjusting the filing thresholds for Form 1099-MISC and 1099-NEC. As per the new law, businesses will now be required to file these forms for payments exceeding $1,000 made after December 31, 2023, instead of the previous threshold of $600. This modification is aimed at simplifying reporting obligations while upholding precise tax reporting standards.

In conclusion, the Tax Relief for American Families and Workers Act of 2024, recently passed by the House of Representatives, encompasses crucial provisions aimed at providing financial support to families, stimulating economic growth for businesses, and upholding the integrity of tax credits. 

To learn more about how these changes may impact you or your business, consider reaching out to your elected representatives and staying informed on the latest developments in tax law.

How we can help you

Taxpayers need to stay updated on the provisions of this act and seek guidance from tax professionals to fully comprehend its implications for their individual situations.

Our team of tax advisors boasts over 30 years of experience in providing tax relief for American families, workers, and businesses, ready to assist you with any inquiries you may have.