Tax Law Change: What’s on the Horizon?

The $64,000 question in most business circles these days is just how the IRS tax code is going to change. Not if but what and when.

The short-lived game show from 1955 to 1958 gave us the $64,000 benchmark for an important question but, in today’s money, that’s $605,823. And, most care about just how much of that a person or business gets to keep.

There is no certainty nor concrete answers at this point. While the debt ceiling has now been raised at least through early December calming (hopefully) markets, Congress and President Biden’s Administration will likely focus on an infrastructure bill as well as tax law changes. While a massive package has shown a price tag of $1.5 trillion to $3.5 trillion, it’s likely something will result in between those numbers. Just what, when and how much is yet to be determined.

There is pressure to pass this legislation by end of year and, as we all know, deadlines spur actions. Often that happens around the holidays.

It is tough to speculate based on President Biden’s “green book” because it was broad, and lots has changed since that was developed. However, if the draft legislation that was released recently is any indication, we should be ready for a host of tax changes across various areas of the tax code. Unfortunately, we’re anticipating rates to go up, but the manner and amount has yet to be seen. State deductions are still in flux as well.

While this isn’t giving individuals or businesses much to plan for, it’s important to recognize where things stand now and that we’ll likely see specifics around the holiday break in December.