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On September 13, the House Ways and Means Committee passed three separate bills that will be the cornerstone of what is being referred to as Tax Reform 2.0.
The bills focus on making permanent certain provisions of the Tax Cuts and Jobs Act (TCJA) that affect individuals, families, and small businesses. They also promote family and retirement savings and new business innovation. For example, one proposal would allow new businesses to write off more of their initial start-up costs. Here’s a brief overview of the three bills.
Many provisions of the TCJA currently are scheduled to expire after 2025. The proposed Protecting Family and Small Business Tax Cuts Act of 2018 would make the following individual and business-focused provisions permanent:
The second bill, the Family Savings Act of 2018, provides for changes to retirement and education accounts and creates a new tax-deferred savings account. Specifically, this proposed law would:
The third bill, called the American Innovation Act of 2018, is the briefest of the three, at only 15 pages. It would allow new businesses to deduct up to $20,000 in start-up expenses in the year they’re incurred so long as they meet certain qualifications. Specifically, this bill would:
A full House vote on the bills is expected to take place at the end of September or in October. If the bills pass the full House, it’s not expected that the legislation will be taken up in the Senate before the midterm November elections, though experts believe the provisions on retirement savings could eventually find bipartisan support. A major sticking point is the estimated price tag of the legislation: $627 billion over the next decade, according to a recent analysis by the Joint Committee on Taxation.
Regardless of the chances of passage, it’s important to keep abreast of any tax law changes. We can answer your questions on how current tax law and any proposed legislation may affect your individual or business tax planning.
*Securities offered through 1st Global Capital Corp. Member FINRA, SIPC. Investment advisory services offered through 1st Global Advisors, Inc. We currently have individuals licensed to offer securities in the states of AL, AZ, CA, CO, CT, FL, GA, HI, ID, IL, IN, KY, MI, MS, MO, NV, NJ, NC, OH, RI, TN, TX, WA, WV and WI. This is not an offer to sell securities in any other state or jurisdiction.