Federal Income Taxes Are Set To Skyrocket

Owners of pass-through entities could see their effective federal income tax rate increase by 30% by the end of 2025, rising from 30% to 39.6%. The 199A deduction and other tax provisions will expire, leading to higher taxable income. Bonus depreciation will decrease to 60% in 2024 and 40% in 2025. Since 2022, research and development expenses must be capitalized over 5 years. These tax changes could be approved through the budget reconciliation process, bypassing the need for bipartisan support. For more information, click here.