A new tax bill has been introduced in the House, and it could have meaningful implications for individuals and businesses alike. While the bill is still making its way through Congress, here are a few highlights that may impact MKA clients:
- Increased SALT Deduction Cap – The bill proposes raising the state and local tax (SALT) deduction cap from $10,000 to $30,000, though this would phase down for higher-income filers.
- Permanent Individual Tax Rate Reductions – Many of the individual tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA), originally set to expire, would become permanent.
- Expanded Pass-Through Deduction – The qualified business income deduction for pass-through entities (such as S-corps, LLCs, partnerships, and sole proprietors) would increase from 20% to 23%.
- Bonus Depreciation & R&D Expensing Returns – The bill restores full bonus depreciation and immediate expensing for research and development, which had previously expired.
- Changes for Tipped Workers and Child Tax Credit – Proposals include exempting tips from income tax and expanding the child tax credit to $2,500 through 2028.
These proposed changes—especially the updates to business provisions and individual tax brackets—could offer planning opportunities but also introduce new complexities.
As always, MKA is here to help you navigate what this could mean for your financial plans and tax strategy. If you’d like to discuss how this legislation may affect you, don’t hesitate to reach out to your MKA advisor.