As 2024 draws to a close, both individuals and businesses are facing an array of tax considerations influenced by an evolving landscape of federal and state policies. Navigating these complexities with confidence requires a clear understanding of current legislative dynamics, potential changes on the horizon, and strategic tax planning. Tax Law Advocates is here to guide you through these intricate matters, ensuring you are well-prepared to optimize your tax situation as we head into the new year.

Navigating the Tax Landscape in 2024

Federal Tax Considerations

The federal tax environment for 2024 is marked by significant uncertainty and potential change. Here are some key areas of focus:

  1. Potential Bipartisan Legislation: Business leaders are keenly watching whether Congress will pass bipartisan tax legislation. This could restore favorable rules for research and development (R&D) expense deductions, interest deduction limitations, and bonus depreciation. Additionally, an enhanced child tax credit is under consideration. As these decisions are pivotal, engaging with policymakers and advocating for business-friendly policies is crucial.
  2. Impact of the Tax Cuts and Jobs Act (TCJA): The TCJA provisions, which have provided substantial benefits to individuals and businesses since 2017, are set to expire at the end of 2025. This includes changes to individual tax rates, the pass-through business income deduction, and estate tax exemptions. The looming expiration of these provisions necessitates proactive planning to mitigate potential tax increases.
  3. Global Minimum Tax and International Tax Rules: The introduction of a 15% global minimum tax regime is on the horizon, along with potential changes to how multinational corporations’ profits are allocated among countries. U.S. businesses with international operations must stay informed about these developments to manage their global tax obligations effectively.
  4. Legislative Challenges and Deficit Concerns: The 118th Congress, with its divided control, faces numerous legislative hurdles, including funding measures and appropriations bills. The federal budget deficit, which exceeded $25 trillion at the end of 2023, adds pressure to consider adjustments to tax policies, potentially impacting tax relief provisions and future tax legislation.
  5. Inflation and Economic Growth: The interplay between inflation, higher interest rates, and a tight job market will continue to influence U.S. and global economic growth. Businesses must account for these factors in their tax planning strategies to adapt to changing economic conditions.

State Tax Considerations

State tax policies are also evolving, and staying abreast of these changes is essential for effective tax planning:

  1. Remote Seller and Marketplace Facilitator Rules: States continue to amend and refine their remote seller and marketplace facilitator provisions. Businesses operating across state lines must ensure compliance with these evolving nexus standards and collection requirements.
  2. Passthrough Entity (PTE) Taxes: Many states have implemented PTE tax regimes to counteract the federal SALT cap limitations. As more states consider adopting or amending these provisions, it’s important for businesses and individuals to understand the implications for their tax liabilities.
  3. Excise Taxes and Revenue Streams: State policymakers are exploring new revenue sources, including excise taxes on emerging sectors like online gaming. Businesses should monitor these developments to assess potential impacts on their operations.
  4. Consumer Exemptions and Sales Tax Holidays: States often propose and enact exemptions and sales tax holidays to boost consumer spending. While these measures can provide temporary relief, they may also affect state tax revenue and necessitate adjustments to business tax strategies.

Strategic Planning for the New Year

As we approach the end of 2024, strategic tax planning becomes increasingly important. Here are some actionable steps to consider:

  1. Review and Adjust Tax Strategies: Evaluate your current tax strategies in light of potential changes in federal and state tax laws. Consider consulting with Tax Law Advocates to tailor your approach based on the latest legislative developments and projections.
  2. Engage with Policymakers: For business leaders, actively engaging with policymakers to advocate for favorable tax policies can influence future legislative outcomes. Building relationships and providing insights on the impact of tax policies on business investment and job creation is essential.
  3. Prepare for Changes in 2025: With significant changes anticipated in 2025, including the expiration of TCJA provisions, businesses and individuals should plan ahead to mitigate potential tax increases. This includes considering adjustments to investment strategies and tax-saving opportunities.
  4. Stay Informed: Regularly update yourself on federal and state tax policy changes, including new incentives, regulations, and legislative proposals. Tax Law Advocates can help you stay informed and adapt your tax planning strategies accordingly.

As you navigate the complexities of closing out 2024 and planning for the future, Tax Law Advocates is here to provide expert guidance and support. Whether you need assistance with understanding potential tax implications, developing strategic tax plans, or advocating for favorable policies, our team is ready to assist you.

Contact Tax Law Advocates today at 855-612-7777 or visit our website to schedule a consultation. Let us help you close out the year with confidence and set a solid foundation for your tax planning in 2025.

Staying ahead of tax considerations and making informed decisions can significantly impact your financial well-being. Trust Tax Law Advocates to be your partner in navigating the evolving tax landscape with expertise and confidence.