Tax Talk – Sit Back, Relax and Stay Tuned
By Leo Parmegiani, CPA, MST, Partner; Christopher Migliaccio, JD, Partner; and Thomas Kinder, JD, LLM, Director
As recently discussed in our article Looming Tax Law Changes: What Every Business Owner Needs to Know, many of the provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) are set to expire at the end of 2025. While that has not changed, the conclusion of the election and Republicans controlling the Presidency and both branches of Congress allow us to provide a little more clarity on the road ahead.
In order to extend the provisions set to expire, there would need to be legislative action. Given the make-up of Congress, action seems likely at least for several of the provisions. As mentioned in the article, in 2024 a bill passed in the House to restore bonus depreciation in full for 2023-2025, remove unfavorable expensing provisions related to R&E expenses and make several other business-favorable changes.
That leads us to believe these tax provisions are top of mind for lawmakers and are likely to be part of a tax package. Further, while any tax legislation would likely need to go through reconciliation and require a complex budget process, changes like an increase in the corporate tax rate seem unlikely to be used as part of that process.
Our recommendation is to hold steady and do not make any hasty decisions until there is more certainty. However, staying on top of the path of the Congressional process can be valuable. We will continue monitoring the situation and keep you updated on potential legislation and our thoughts moving forward. Please reach out to us if you have any questions.
Please see a link to our recent article which appeared in Family Business Magazine discussing a number of the TCJA provisions set to sunset: Looming Tax Law Changes: What Every Business Owner Needs to Know.
Contact Us
If you have any questions, contact your PKF O’Connor Davies client service team or:
Leo Parmegiani, CPA, MST
Partner
lparmegiani@pkfod.com
Christopher Migliaccio, JD
Partner
cmigliaccio@pkfod.com
Thomas Kinder, JD, LLM
Director
tkinder@pkfod.com