Call Us Now To Schedule An Appointment!
- +1 956-233-7841
secure plus financial
House Committee on Ways and Means Reconciliation Bill “Pay-Fors” Initial Draft
House Committee on Ways and Means and Chairman Richard Neal (D-MA) have released the initial draft of their portion of the reconciliation package that plans to fund $3.5 trillion in new spending. Many of the provisions will be effective in tax year 2022 (with some exceptions noted below). Here are some of the big-ticket items that will pay for the package:
Reconciliation Bill Funding Items
Corporate and Business Provisions
- Starting 2022, Top Corporate tax rate will raise to 26.5% on income over 5,000,000 dollars. For income up to 400,000 dollars, tax will lower to an 18% rate; the current 21% rate will remain unchanged for income between 400,000 dollars and 5,000,000 dollars. [§138101]
- Personal service corporation’s income will be subject to the 26.5% rate and will not be eligible for graduated rates. [§138101]
- An additional 3% tax on corporate income will phase the benefits of the graduated corporate rate out above 10,000,000 dollars and up to a maximum additional tax of 287,000 dollars. (§138101)
- Nonresident aliens are subject to 30% withholding tax for interest income received from a company where they own at least 10% of the interests. [§138145]
- Effective September 13, 2021, limits taxpayers with an AGI greater than 400,000 dollars from qualifying for the 75% or 100% exclusions for gains on qualified small business stock under IRC §1202. [§138150]
- Expansion of the constructive sale rules of IRC §1259 and the wash sale rules of IRC §1091 for digital assets and currencies such as cryptocurrencies [§138151, §138153]
- Requires reporting of GILTI income and country-by-country operation of foreign tax credits. [§138124, §138126]
- Effectively increases the rates on GILTI and FDII income through reduced exemptions and deductions. [§138121]
Has your Accountant been in touch with you recently to review how much in taxes you are saving this year?
Let’s jump on a free zoom call to assess your business; we can help you increase your cash flow through implementing tax planning by defining where in the records your profit is hiding within.
secure plus financial
Related Updates
Is your CPA maximizing your Tax Savings?
Almost all the clients we helped already have a bookkeeper, accountant, or CPA; some are even their family members or friends. Unfortunately, we found it is very rare that they are also tax strategists.
Maximize tax savings with Late S Elections
The IRS will facilitate the grant of relief to late-filing S Elections entities by consolidating many other revenue procedures.
Taxing your S-Corporation as a C-Corporation
A C-Corporation structure may be more beneficial. Under the Tax Cuts and Jobs Act, corporate income tax rates are a flat 21% compared to individual tax rates.
Schedule C to S-Corporation Tax Strategy
If you are a sole-proprietor operating with an LLC, you can elect to be treated as an S-corporation for tax purposes.
Claiming your Home Office as your Primary Office
If you have a business location outside of your home, but also maintain a home administrative office to run your business, you can claim the home office as your primary office.
5 Medical Reimbursement Tax Strategies
There are several medical reimbursement tax planning strategies available for your business. They diverge in their capacity to establish tax savings.
Claiming Tax Deductions for Fringe Benefits
Confirm your assets are being depreciated and properly capitalized. Often, your accountant might not be doing this properly.
4 Health Care Tax Strategies for your business
Health Care is one of the most powerful tax strategies available to maximize the tax savings of your business. As a business owner, you have more options to save on healthcare and insurance costs.
Maximize the Depreciation of your Assets
Confirm your assets are being depreciated and properly capitalized. Often, your accountant might not be doing this properly.