Tax accounting highlights and legislative timeline: CLA

The proposed tax bill is ready to extend the tax rates and to make significant changes to deductions and loans, which affects both individuals and companies. Understanding these changes and stays during the entire legislative procedure is crucial for effective tax planning, navigating potential effects and well -founded decisions.

Tax loads updates

On May 14th, the Committee for House Ways and Means (W&M) voted to advance the tax bill to the household committee of the house. The tax burden is included in the comprehensive budget reconciliation package, which the house will be coordinated later this month.

What is the process to convert the tax bill into the law?

As soon as the house is right about the tax burden, a few steps have to follow:

• If the house passes the legislative template, the Senate will go to the Senate, where it goes through a similar service process, probably in June
• As soon as the Senate has adopted its own version of the budget reconciliation package (including the tax bill), the house and the Senate must reconcile its differences
• The house and the Senate coordinate separately and say goodbye to the reconciled version
• The Congress sends the legislation to President Donald Trump for the signature

Potential tax changes in the proposed invoice

Some Key highlights In the proposed tax bill, in addition to the TCJA extensions and President Trump's campaign:

1. Extension of ongoing tax rates: The current income tax rates and clips for individuals, goods and trusts are continued (adapted to inflation).
2. Larger tax compensation for owners of PASS-HROUGH companies: The tax deduction for owners of qualified through transactions will increase from 20% to 23%, starting with the tax year 2026. This effectively reduces the highest rate for qualified business revenue (QBI) from 29.60% to 28.49%.
3. Higher limit for state and local tax deductions for individuals, goods and trusts: The current proposal increases the state and local tax deduction limit to $ 30,000. The extended deduction begins to decrease if your income is over $ 400,000 (starting with the tax year 2026).
4. Salz's caps problems locked up: The deduction for state income taxes paid by pass-through companies (i.e. PTET taxes) is limited with exceptions for qualified businesses or companies (from 2026 tax year).
5. Larger discount and gift tax exemption: The amount that you can give away during your life without a discount or gift taxes increases to 15 million US dollars, adapted for inflation from the 2026 tax year.
6. Changes to the tax credits: Various tax credits within the framework of the law on inflation reduction are significantly changed and gradually switched off.
7. Improved expenses of certain properties: From January 19, 2025, companies can completely deduct the costs for certain properties and equipment with improved bonus depreciation and increased Section 179 from January 1, 2025.
8. Restoration of the complete deduction for research and development costs: From 2025, companies can completely deduct their domestic research and development costs. The previous costs incurred in previous years would still have to be amortized.
9. Increased deduction of business interest: From 2025, companies may be able to deduct more interest expenses due to the re -enactment of the depreciation and amortization -addback -Addback -ADDBack when calculating the business interest restriction of section 163 (j).
10. Changes to the employee retention (ERC): The period in which the IRS would question an ERC claim would be extended to at least six years from the date on which the claim is submitted. The IRS ends the processing of reimbursements for the claims in customer loyalty submitted after January 31, 2024.
11. Renewed opportunity zone program: The program, which promotes investments in economically necessary areas, is renewed and changed.
12. Extended access to simpler accounting methods for manufacturers: Currently, small manufacturing companies can apply simpler accounting methods and have fewer tax restrictions. The threshold for the qualification of this flexibility would increase from $ 31 million to average annual gross revenue from 2026 to $ 80 million.
13. End of the liberation of Minimi's tariff: Eliminates the liberation of minimis (currently 800 US dollars) for US tariffs for imports.

What can you do now to prepare for the upcoming tax bill?

Take these proactive steps to manage the effects of the tax bill on your personal and professional circumstances:

• stay calm – The tax bill is still in the early phases of the legislative procedure and could be significantly changed by the Senate.
• Stay informed -Visit our tax Policy Watch page to get updated insights into various aspects of house tax bill in order to get a more detailed look at changes that can affect your families and companies.
• Stay connected – Subscribe to our tax policy newsletter to stay up to date and regardless of where trade and tax policy ends up.

How CLA can help with potential changes to tax law

With tailor -made tax strategies and comprehensive analyzes on tax policy, the CLA's tax team can help navigate the tax planning this year and beyond this year and beyond.

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