Looking Ahead: 2025 Expiring Tax Breaks
Looking Ahead: 2025 Expiring Tax Breaks
Regardless of which candidate wins the 2024 election, there is an enormous issue facing small business owners that looms large over all planning decisions: the expiration date on many of the 2017 tax cuts.
Even though it’s a ways off, the expiration of the majority of 2017 “Trump-era” tax cuts are set for December 31, 2025. It is relevant because it is having an impact on tax planning for 2024 and 2025, and will certainly be the subject of attention in Congress for much of next year.
List of the Most Common Tax Breaks Expiring at the End of 2025:
Personal:
Lower tax brackets
Higher standard deduction
Higher child tax credit
Cap on state and local tax (SALT) at $10,000
Expiration of higher estate and gift tax exemption
Small Business:
Bonus depreciation
Larger Sec 179 expensing
Research and Development expensing
20% small business flow-through deduction (QBI)
Important Reminder: Upcoming Deadline for Beneficial Ownership Info (BOI) Reporting
This serves as a reminder that the required upcoming December 31st deadline to file 2024 BOI reporting to the Financial Crimes Enforcement Network (FinCEN) is still ongoing. This affects many small businesses that are registered with their respective Secretary of State to conduct business.
Are There Any Exemptions from Filing? There are specific exemptions for entities such as non-profits, banks, insurance companies, accounting firms and other heavily-regulated industry types. There is also a specific exemption for U.S. small businesses that have more than 20 full-time employees AND reported more than $5,000,000 in gross receipts on the previous years federal income tax return.
What about Sole Proprietorships?
Unless a sole proprietorship was created in the United States by filing a document with a secretary of state or similar office, a sole proprietorship is generally exempt from the filing requirements.
Who is a Beneficial Owner?
A beneficial owner is any individual who, directly or indirectly:
Exercises substantial control over a reporting company; OR
Owns or controls at least 25 percent of the ownership interests of a reporting company.
What Information is Reported About an Owner?
For each individual who is a beneficial owner, a reporting company will have to provide:
The owner’s individual name;
Date of birth;
Residential address; and
An identifying number from an acceptable identification document such as a passport or U.S. driver’s license.
How to Report? Filing is done electronically through a secure filing system available via FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov).
When is the Report Due?
If your company was created or registered before 2024, the report is due by December 31, 2024.
If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
Where Can I Find BOI Reporting Information?
https://fincen.gov/sites/default/files/shared/ BOI_Small_Compliance_Guide.v1.1-FINAL.pdf
https://fincen.gov/boi-faqs
