Congress has introduced a bipartisan bill that extends some of the provisions that have recently expired. The Tax Relief for American Families and Workers Act of 2024 proposes the following changes:
Bonus depreciation would go back to 100% for property placed in service in 2023 through 2025.
Research and development costs from 2022 and forward would be able to be expensed, as capitalization won’t be required again until 2026.
Business interest limitations would include the depreciation and amortization addback again.
The refundable portion of the Child Tax Credit would be increased for 2023 to $1,800 per qualified child, where it is currently $1,600. It also would increase the refundable amount in 2024 and 2025 to $1,900 and $2,000, respectively. In 2024 and 2025, it would increase the base of $2,000 for inflation.
Section 179 depreciation deduction and limitation would be increased for inflation beginning in 2024 to $1.29 million reduced by the amount by which costs exceed $3.22 million.
The threshold for filing forms 1099-MISC and 1099-NEC would increase from $600 to $1,000 beginning in 2024.
All ERC claims after January 31, 2024 would not be processed. This is in part due to the amount of fraud surrounding the credit and directing more funds to cover the tax changes introduced.
If any of these changes impact you significantly, this will most likely cause a delay in filing returns for the 2023 tax year as we wait to see if this act moves forward, and in the event that it passes, as calculations on tax software are updated and approved.