Business Tax Changes for 2024 and Beyond

Business tax changes affect companies of all sizes. Whether you’re a small business owner or not, the ever-changing US tax laws will impact how you calculate your taxes. For this reason, it’s best to keep a watchful eye on these changes.

While it’s true that you can work with a tax professional in adopting these new laws, it helps to know what these changes are beforehand and how they will affect your business.

Here are some of the latest business tax changes you need to know and how they can affect 

your business:

Inflation Reduction Act (IRA)

In 2022, the Inflation Reduction Act (IRA) introduced a tax credit worth up to $7,500 for consumers buying new Electric Vehicles (EVs) and $4,000 for used EVs. The only downside to this new tax credit is that you must wait until your annual tax return filing to claim it.

But starting January 1, you’ll be able to get your EV tax credit at the point of sale. Car dealers are now allowed to give buyers their credit as cash, price discount, or downpayment, depending on their preference. 

Aside from enhancing EV tax credits, the IRA has also increased the tax credits for solar investments. Solar projects constructed before 2025 will receive a tax incentive of up to 30%.

Charitable Contributions

The states of Arkansas, Iowa, Kansas, Nebraska, New Jersey, and Pennsylvania will reduce the rates of their corporate income taxes.

Despite these significant tax cuts, there’s a proposed amendment that could cause corporate tax rates to increase from 21% to 28%. However, this is yet to be confirmed. 

Individual Income Tax Rates

In 2024, the following states will reduce their individual income tax rates:

• Arkansas
• Connecticut
• Georgia
• Indiana
• Iowa
• Kentucky
• Mississippi
• Missouri 
• Montana
• Nebraska
• New Hampshire
• North Carolina
• South Carolina
• Ohio

Both Ohio and Montana will be consolidating some of their brackets, while Georgia will be moving to a flat tax rate. Taxpayers in Michigan should also expect higher tax rates this coming year.

Standard Deduction

The IRS has increased the standard deduction for single filers and those married and filing jointly to $14,600 and $29,200, respectively. The deduction for the head of household has also been increased from $20,800 to $21,900.

Excise Taxes

Oregon and Utah will increase their excise tax rates for motor fuel, while Kentucky will launch a new tax on EV power. Taxpayers in Maine and Hawaii should also expect changes in their respective tobacco and e-cigarette excise taxes. 

The Research and Development (R&D) Tax

The R&D tax credit limit for eligible businesses has been increased to $250,000 from its original $150,000. Limits for business loan interest deductions have also improved by 5%.  

Depreciation

Aside from tax rate changes, the IRS modified the asset depreciation rules for 2024. The bonus depreciation allowance for qualified properties placed in service this year will be reduced from 80% to 60%. 

Adapting to Changes

There’s no denying that adapting to new tax laws can be challenging. So, to help you out, we’ve made a list of proactive steps you can take to prepare for the new tax year:

Plan Ahead

Tax preparation is the key to staying ahead of the game. Regular planning sessions will help you identify the new opportunities and risks these amendments will bring. 

Review Your Business Structure

Take the time to assess whether your current business structure will still be tax-efficient despite these new tax laws. If you think your business has outgrown its structure, now might be the perfect time to change it. 

Analyze Your Cash Flow

Analyze your financial records and see how your new tax liabilities will affect your company’s cash flow. Check your income statements, balance sheets, and cash flow statements. You can use these documents to determine the financial standing of your business and develop a comprehensive financial strategy. 

Look For New Deductions & Credits

Explore new deductions and credits that you can use to lower your business’s tax liabilities. Check which increased deductions we’ve mentioned earlier can be applied to your business. 

Consult An Expert

Lastly, one of the best ways you can adapt to the changing tax laws is by consulting a tax expert. 

Tax experts are committed to helping business owners maintain a good standing with the IRS. They’re always looking for significant amendments or new legislation that may take effect in the coming tax year. 

A tax expert will help you adapt to these changes by providing personalized advice tailored to the needs and goals of your business. 

Prepare For The New Year

Preparing for the new year is the best way to achieve success. Get help from a professional tax expert and contact NCH today. 

NCH is one of Nevada’s leading business specialists. We have a team of tax experts ready to guide you through the intricacies of these new business tax codes.

Our tax experts will help you through your tax planning, ensuring you get as many tax benefits as possible. We understand how burdensome tax liabilities can be, so we’ve made it our mission to help our clients get the most out of profits. 

With our tax experts by your side, you can rest easy knowing your business will be tax-compliant in the coming new year. 

To learn more about our tax consultation services, visit our website here or call us at 1-800-508-1729. 

DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.