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Bookkeeping tip! In a new draft bill released by the Ways and Means Committee, we have started to get more insight into the new tax code (2021/2022).
Within the new 830 page bill, specific highlights regarding your business and personal income may be affected. Here are a few changes to expect:
- The top tax bracket increased to 39.6%.
- Capital gains rate increase to 25%.
- Additional NIIT tax for anyone making more than 400k income.
- Contribution limitations on I.R.A.s for high-income individuals.
- Retroactive Restrictions for individuals involved in conservation easements.
- Allows S Corps to convert to Partnerships without triggering tax on the reorganization.
- Enhancement of the Work Opportunity Tax Credit to more individuals
26.5% C Corp rate (5M+ income businesses).
Remember, this is just a draft coming out of the House of Representatives. Still, some of it mirrors what was discussed in President Biden’s American Jobs and American Families Plan back in March/April this year.
If you are a business owner expecting to pay taxes this year and next, this will most likely affect you once the bill becomes law.
As your bookkeeping professional, we are here to help you. To help get ahead and start planning on making smarter tax decisions with your business and income, we are happy to schedule a time with you to discuss what could make sense for this year and every year forward.
With the 830 page bill, there are lots to unpack. Remember, you can still make proactive changes to help set you up for success this year, and we can help.
Need help understanding how this may apply to you and what proactive strategies are needed to be implemented before these changes occur? Let us take care of your bookkeeping. Book Your Free Tax Assessment Here.