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Navigating the New Tax Landscape: Insights on the Tax Relief for American Families and Workers Act of 2024

Exciting news has just emerged concerning the Tax Relief for American Families and Workers Act of 2024! The House of Representatives passed the bill on January 31, 2024, with an 83% approval. This marks a significant step forward for the legislation, offering potential tax relief and benefits for individuals and businesses.

Let’s explore the key provisions of the act and what they might mean for you:

1. Extending Tax Incentives for Businesses:

Good news for entrepreneurs and business owners! The act proposes a temporary extension of several popular tax incentives to bolster investment and innovation:

  • Depreciation: Bonus depreciation is now expected to be 100% from January 1, 2023 through December 31, 2025 for qualified business investments, allowing companies to deduct the entire cost in the year of purchase. This incentivizes capital investment and boosts cash flow.
  • R&D Deduction under Section 174: The immediate deduction for research and experimental expenses is retroactively allowed from 2022 through 2025, offering another avenue for tax savings on business innovation initiatives.

2. Increased Child Tax Credit:

The act aims to make raising children slightly easier on wallets by proposing a more generous Child Tax Credit (CTC). Here’s what families might see:

  • Increased Credit Amount: An increase in the refundable CTC translating into more money directly deposited into eligible families’ bank accounts.
  • Relaxed Earning Requirements: The current CTC has income limits, leaving some families with higher incomes ineligible for the full amount. This proposed law aims to loosen these restrictions, potentially making the credit available to more families.

3. Next Steps: Senate Consideration and Beyond

With the House vote complete, the act now awaits consideration by the Senate. We’re hoping this Bill is voted on and passed as soon as possible to avoid confusion at the filing deadlines.

If you have any questions or concerns regarding the legislation, please feel free to reach out to us at 616.458.1835.