2020 Accounting Today’s Best Accounting Firms to Work for
Biden’s tax plan
Biden has been critical of the TCJA and his planned tax law changes call for higher taxes on both ordinary and capital gain income for high net worth individuals. His proposed changes include:
- Raise the top marginal individual income tax rate for incomes above $400,000 to the pre-TCJA rate of 39.6%.
- Tax long-term capital gains and dividends above $1 million at the ordinary income rate of 39.6%.
- Cap the value of itemized deduction to 28%, thereby reducing the benefit for taxpayers in rate brackets higher than 28%.
- Raise the corporate income tax rate from 21% to 28%.
- Institute a 15% alternative minimum tax on corporations with $100 million or more in profits.
- Raise the Global Intangible Low Tax Income (“GILTI”) (a tax on income from foreign affiliates, including foreign-held intangible property and its related income) rate from 10.5% to 21%.
- Institute a 12.4% Social Security payroll tax, to be split between employers and employees, on income earned in excess of $400,000.
- This proposal results in a “donut hole” where wages between the current cap of $137,000 and $400,000 are not taxed.
- Phase out the Section 199A deduction on taxable income in excess of $400,000.
- Expands the Earned Income Tax Credit (“EITC”).
- Expand the Affordable Care Act’s premium tax credit.
Trump’s tax plan
Although President Trump has not officially issued a tax policy proposal for his re-election campaign, the budget proposals submitted to Congress since the passage of the TCJA have assumed the individual income tax provisions set to expire at the end of 2025 will be made permanent. Trump is set to unveil this month a Tax Reform Plan for low-income and middle-income taxpayers – Tax Reform 2.0.
Sadly, it did not take long for scammers to take advantage of the programs being offered to help individuals and businesses through this current situation. Don't let your guard down! Remember, the IRS and banks will not contact you for bank account information or to verify social security numbers or information on your tax return. Also, you should not pay anyone a fee to process your stimulus check. The Federal Communications Commission (FCC) is receiving reports of potential scams, warning on their website:
President Trump signed the Families First Coronavirus Response Act (FFCRA H.R. 6201) shortly after it passed through the Senate on March 18, 2020. The legislation applies to companies with 500 employees or less employees. The employer cost of these expanded programs will be absorbed by available tax credits included in the bill.
Yesterday, Treasury Secretary Mnuchin announced plans for the federal government to allow a deferral of tax payments for individuals up to $1 million and Corporations up to $10 million originally due April 15th to be paid by July 15, 2020 without incurring penalty and interest charges. The filing deadlines of those returns have not been automatically extended, so individual and C Corporation returns without a filing extension, are still due on April 15th .
Business clients often ask us: Should we outsource our accounting needs? What exactly are the benefits we can expect?
As we near the end of 2019, we are sharing an overview of the most significant changes under the Tax Cuts and Jobs Act (TCJA) and other key tax provisions you need to be aware of moving into 2020 with strategies for your individual and business situation. For a copy of our planning guide, contact us at firstname.lastname@example.org.
As we near the beginning of the end (of 2019), it is crucial that employers account (literally and figuratively) for changes in the law.
These summer activities can affect next year’s tax returns. Here are some things taxpayers do during the summer along with tips they should consider now: