New tax amendments

Here are some recent tax amendments and changes that may be relevant to individuals and businesses:

Individual Taxpayers:

  1. Tax Cuts and Jobs Act (2017): The TCJA introduced significant changes to individual tax rates, deductions, and credits. Key changes include:
    • Reduced individual tax rates, with a top marginal rate of 37%.
    • Doubled the standard deduction to $12,200 for single filers and $24,400 for joint filers.
    • Limited state and local tax (SALT) deductions to $10,000.
    • Introduced a new 20% deduction for qualified business income (QBI) from pass-through entities.
  2. 2020 CARES Act: The CARES Act provided relief to individual taxpayers, including:
    • Waiving the 10% penalty for early withdrawals from retirement accounts up to $100,000.
    • Allowing individuals to deduct charitable contributions up to $300 without itemizing.
  3. 2021 Consolidated Appropriations Act: This law extended and modified some of the CARES Act provisions, including:
    • Extending the waiver of the 10% penalty for early withdrawals from retirement accounts until January 1, 2026.
    • Allowing individuals to deduct charitable contributions up to $600 without itemizing.

Business Taxpayers:

  1. Tax Cuts and Jobs Act (2017): The TCJA introduced significant changes to business tax rates, deductions, and credits. Key changes include:
    • Reduced corporate tax rate from 35% to 21%.
    • Introduced a new 20% deduction for qualified business income (QBI) from pass-through entities.
    • Limited the interest expense deduction to 30% of earnings before interest, taxes, depreciation, and amortization (EBITDA).
  2. 2020 CARES Act: The CARES Act provided relief to businesses, including:
    • Allowing businesses to defer payroll taxes for the remainder of 2020.
    • Providing a 5-year carryback period for net operating losses (NOLs).
  3. 2021 Consolidated Appropriations Act: This law extended and modified some of the CARES Act provisions, including:
    • Extending the payroll tax deferment period until January 1, 2022.
    • Allowing businesses to carry back NOLs to the 2018 or 2019 tax year.

Other Changes:

  1. Section 179 Expensing: The TCJA increased the Section 179 expensing limit to $1.08 million and allowed businesses to expense qualified property with a recovery period of 20 years or less.
  2. Research and Development (R&D) Tax Credit: The TCJA increased the R&D tax credit from 14% to 18% of qualified research expenses.
  3. Opportunity Zones: The TCJA created Opportunity Zones, which allow investors to defer capital gains taxes by investing in designated low-income communities.

Please note that these are just some of the recent tax amendments and changes, and there may be additional provisions that apply to your specific situation. It's always a good idea to consult with a tax professional or financial advisor to ensure you're taking advantage of all the tax savings available to you.