On the heels of the debt limit standoff, the Republican-led House Ways and Means Committee has introduced legislation that would provide new tax breaks for individuals and businesses, including a temporary increase in the standard deduction.
Here are the three main propositions:
This would roll back changes made by the Tax Cuts and Jobs Act (TCJA) to R&D expensing rules under Section 174 and the interest expense deduction and restore full bonus depreciation. These changes would apply retroactively, so if implemented, taxpayers may need to file amended returns.
This would provide a temporary increase in the standard deduction for individual taxpayers on 2024 and 2025 returns -- $4,000 for joint filers and $2,000 for single filers.
This would reset the reporting threshold of Form 1099-K back to $20,000 from $600, helping gig workers who receive money for jobs from payment platforms like PayPal and Venmo.
To offset the costs of these tax policies, House Republicans are proposing a repeal of Superfund excise taxes and certain energy tax credits implemented under the Inflation Reduction Act.
This tax package will likely pass through committee (and, if not, by House floor vote due to Republican majority there). But as is, it would likely die in the Senate unless Democrats can force some negotiations. Both Democrats and the White House are insistent that any tax package also include making permanent the expanded Child Tax Credit under the American Rescue Plan ($3,600/year for children under 6; $3,000/year for children over 6), so that’s likely where negotiations will start.
Stay tuned to our blog as this tax package advances.