Kelly Bullis: What tax law changes are expected in 2024?

I’m a bit jealous of the weather folks. It seems like they can be wrong 99% of the time and receive an award for it. The rest of us? We get held accountable for everything we say.

So, in fear and trepidation, I am going to step out and risk being wrong. Hey! I’ve been married for over 41 years, so I’m used to being wrong… a lot!

Some things to consider as we enter into a presidential election year. Both major political parties would love to score a “victory” for their side in tax law changes to gain potential votes.

Nobody wants to go home to run for reelection on a platform that they did nothing and tax rates, deductions, credits etc., are going to combine to increase everybody’s tax bite after 2025. (The current tax law from 2017 is set to expire at the end of 2025, reverting back to Obama era higher tax rates, etc.) A simple solution to that would be to just extend the 2017 tax law for at least one more year.

What is on the Republican’s wish list?

To fully restore the Research and Development deduction in the year they occur. (The current tax law from 2017 changed this to amortizing R&D costs over five years.)

To return to pre 2023 Bonus Depreciation deduction rules. (The 2017 tax law started phasing this out after 2022.)

What do the Democrats want?

Expanded child tax credits. Fully refundable with advance monthly payments like the rules used for 2021 tax returns.

Notice that both parties are wanting to have more goodies and giveaways, but nobody is proposing any major tax increases except Democrat Sen. Ron Wyden from Oregon. He wants to see a tax on annual built-in gains, despite not selling the underlying asset for … you guessed it, “the rich.” (Currently defined as having $1 billion in assets, but we all know that number will drop when negotiations begin on how much tax needs to be collected to pay for giveaway goodies.)

Since Congress has so many other “emergencies” on their plate to argue about for the first half of 2024, it doesn’t leave much time for them to come up with any major tax law changes before they adjourn for election season. I think there will only be a one-year extension of the 2017 tax law without any major changes. The rest will turn into talking points to score against the other side.

Have you heard? Proverbs 20:5 says, “The purpose in a man’s heart is like deep water, but a man of understanding will draw it out.”

Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. On the web at BullisAndCo.com. Also on Facebook.