Bulletin Board Magazine [Volume 2 - 2025]

To qualify the property must meet the following five criteria: 1.It must be used in the U.S. or a U.S. territory. 2.The original use must begin with the taxpayer. 3.Construction of the facility must have commenced after December 31, 2024, and before January 1, 2030. 4.The property must be in service before January 1, 2034. 5.The taxpayer must elect to claim an immediate deduction for the property. Moving to the second improvement of businesses’ capital expenditure operations are the expensing of research and development costs (R&D). A quick history of the on again off again expensing trail for R&D: Prior to TCJA, R&D costs could be written off as they were incurred. TCJA required that those costs be capitalized and amortized ratably over a five year period (15 years if the costs occurred outside the US). The new law returns the ability to deduct domestic research or experimental expenditures paid or incurred in tax years beginning after December 31, 2024. Small business taxpayers with average annual gross receipts of $31 million or less will generally be permitted to apply this change retroactively to tax years beginning after December 31, 2021. All taxpayers that made domestic research and experimental expenditures after December 31, 2021, and or before January 1, 2025, will be permitted to elect to accelerate the remaining deductions for those expenditures over a one- or two-year period. Amending a tax return for those periods will not be necessary with this election. There is easily a dozen more business provisions addressed by the bill. Many will require regulations on specific details, and all should be given their due in consideration of your business tax structure and plans. This bill impacts areas like business interest limitations, paid family leave, employer provided child tax credits, excess business losses and qualified small business stock sales. I could expand on business deductions and financing of spaceports (think airports but with interstellar departure gates) but I may lose my audience. One area that was reduced heavily in a clear policy shift was the clean energy tax incentives put forward in prior administrations and legislative initiatives. Well over a dozen programs are ending various credits in excise taxes, rebate programs and production developments in a host of areas like wind, solar, and hydrogen. These incentives will either not be renewed or will terminate on June 30, 2027. Let us spend a little time on the impact on your and your employees’ personal tax returns. Let’s start with tax rates. The bill generally makes the tax rates enacted by TCJA permanent. There will be some changes to the brackets cutting off between the 12% and 22% ranges and include inflation adjustment changes impacting those ranges between now and 2030. But overall, the status quo established by the TCJA

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