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The Berman Buzz

Tax Tip Tuesday: Business Tax Breaks in Motion

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Amid chaos and congressional gridlock, the House of Representatives overwhelmingly approved a $78 billion tax bill in February 2024. Most of the bill has some powerful business incentives that:

  1. Allows businesses to deduct domestic research and experiential expenses through 2025, departing from the previous requirement to amortize these costs over five years.

  2. Extends 100 percent bonus depreciation through 2025 from the current 60 percent, which phases out entirely over the next few years.

  3. Increases the base amount for the Section 179 Equipment Expensing Deduction to $1,290,000, with presumed provisions to reindex for inflation. 

  4. Increases the base limitation amount for the 30 percent of taxable income interest deduction by adding back to the base depreciation and amortization expenses.

The crazy thing is this appears retroactive to 2022, potentially paving the way for refund claims, so stay tuned for further developments!

As part of an exchange for these business incentives, the childcare credit will rise to $2,100 per child by 2025. So, the good news is this is a terrific business tax package. The bad news is that the bill could face derailment in the Senate by the hard-liners in Congress. For example, Congressman Matt Gaetz of Florida describes the business and childcare breaks as “welfare in drag.” Not exactly sure what that means in tax terms. So, we will leave it at that for now.

Here to Help

If you have questions about your unique situation or need strategic advice regarding tax planning, we are here to help. We build value-added relationships with each client to understand their business structure to provide solid solutions, and our approach offers direct access to the firm's decision-makers. Our innovative cross-functional services help businesses address the challenges ahead. Contact us to let us know how we can best support you.

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