Major tax reform is on the horizon, and your clients are facing unprecedented uncertainty about their tax future.

These proposed changes could dramatically impact your clients:

✅ 1. Corporate Tax Rate Adjustment

A proposal is under consideration to lower the corporate tax rate from 21% to 15%. This change aims to make corporate taxation more competitive and potentially encourage business investment.

✅ 2. 100% Bonus Depreciation

There is support for making 100% bonus depreciation permanent. This proposal aims to encourage capital investment by allowing businesses to fully and immediately deduct the cost of qualifying assets.

✅ 3. 100% R&D Expensing

There is also support for making 100% R&D expensing permanent, viewing it as a means to stimulate innovation and economic growth. This proposal would eliminate the current amortization requirement, allowing businesses to immediately deduct their R&D expenditures.

✅ 4. Removal of Tax on Tips and Overtime

There is a plan to exempt tips and overtime pay from federal income tax. This would increase employees’ take-home pay, particularly in industries where tips and overtime are common.

✅ 5. Increased SALT Deduction Cap for Couples

The state and local tax (SALT) deduction cap, currently at $10,000, may be doubled for married couples filing jointly. This change would benefit taxpayers in states with higher local taxes.

✅ 6. New Auto Loan Interest Deduction

A new deduction may allow taxpayers to deduct interest paid on auto loans. This could provide financial relief to those financing vehicle purchases, though it would mainly benefit taxpayers who itemize deductions.

✅ 7. Lower Cap for Home Mortgage Interest Deduction

The mortgage interest deduction cap, currently at $750,000, may be reduced to $500,000. This adjustment would limit the deductible interest on new mortgages above the new threshold.

It’s important to note that these proposals are subject to legislative approval and may undergo modifications during the legislative process.