Biden's Tax Policies

After becoming the 46th President of the USA, Joe Biden has taken firm steps in redirecting the falling path of the American economy. The much-awaited tax policies of the new government have re-installed the faith of business in the country & accounting firms will be able to make the best use of the policies to assist small businesses. Covid-19 pandemic has thrown several challenges before the stumbling economy & firm steps are expected from the government to save the economy. The tax session will be a smoother one with the implementation of the right tax policy. 

The pandemic has forced the government to invest on multiple fronts & support the businesses to keep the economy going. There is uncertainty in Congress with a lot of things on the plate to discuss as the focus shifts to an updated tax plan. The pandemic demanded a stricter tax policy and Biden is expected to boost the economy through swifter tax regimes. This blog will highlight the possible aspects of Biden’s tax plan & benefits for the accounting firms.

Table of Contents

  1.       What’s in Biden’s Tax Plan?
  2.       Expiring Provisions of the Tax Cuts & Jobs Act & Proposed Improvements
  1.       Highlights of the Biden’s Tax Policy
  1.       Benefits of Biden’s Tax Proposal for Accounting Firms
  2.       Final Thoughts!

What’s in Biden’s Tax Plan?

President Biden’s tax proposal includes a provision to raise the corporate tax rate to 28 percent and makes things harder for companies to move their assets overseas and enhance the Internal Revenue Service. These are desperate times that require extraordinary steps & the Biden administration has come up with policies to support the local business & individuals.

The administration aimed to reverse the reduction of corporate taxes under President Donald J. Trump. Earlier, in the President Trump administration, the corporate rates were cut to 21 percent for 35 in 2017. It enacted a series of provisions that the Biden administration says have encouraged the big firms to move lower-tax jurisdictions, like Ireland.

The proposed plan is expected to raise a total of $2.5 trillion in new tax revenues over 15 years. Also according to the analysts at the University of Pennsylvania’s Penn Wharton model, ‘It put the estimate even higher, estimating a 10-year increase of $2.1 trillion, with about half the money coming from the plan’s various changes to the taxation of multinational corporations.’

There is now increased potential to pass more of the legislative agenda of the administration. Senate rules require 60 votes to pass legislation – including the budget reconciliation. The administration will be able to now focus on the initiative of bipartisan support, like tax incentives for domestic manufacturing & infra investment.

Expiring Provisions of the Tax Cuts & Jobs Act & Proposed Improvements

Qualified Business Income Deduction

For pass-through entities, the 20% qualified business income deduction is mandatory and it could be a sunset sooner for people with income of $400,000 or more. The Biden administration has proposed changes to increase the top tax rates by 10% on pass-through income.

SALT Limitation

By the end of 2025, the SALT (State And Local Tax) deduction of $10,000 per home is set to expire. It has been a point of debate for Congress since the inception of law in 2017. The SALT limitation is resulting in higher taxes and the Biden administration had suggested changes or expiry of the policy.

Research and Development Expenses

The businesses will need to capitalize on the research & development costs & monetize the cost over 5 years. Earlier businesses were able to filly expedite the research & development cost in the way their liked or administered.

Highlights of the Biden’s Tax Policy

Taxes Levied on Corporate Taxes

The aim of the administration to raise taxes during the Covid-19 period will be to raise the corporate tax rate. Biden administration is viewing the raise of the rate as the way to enhance the corporate tax receipts that have plunged to their lowest levels as the share of the economy.

Ensuring the Big Firms to Pay at least 15 Percent in Taxes

Large-sized companies pay less than the current tax rate & at times nothing. The tax code provision is allowing firms to reduce liabilities through offshoring, exemptions, & deductions.

Strengthening of Global Minimum Tax

As part of the Trump administration’s 2017 tax package, the U.S. companies have strengthened the global minimum tax regime by raising the tax rate & eliminating some of the exemptions that weakened the impact.

Replacement of Fossil Fuel Tax Subsidies with Clean-Energy Initiatives

The Biden administration plans to strip away from the longstanding subsidies for Oil & other fossil fuels and replace them with greater incentives for clean energy.

Enhance the Speed of Internal Revenue Service

There has been a struggle within the Internal Revenue Service with budget cuts & slim resources over the years. The administration is trying for better funding of tax collection agencies.

Benefits of Biden’s Tax Proposal for Accounting Firms

Let us look at some of the top benefits for accounting firms with the new tax policy –

  1. The accounting firms will be able to uplift the businesses with the use of a new set of support from the Biden administration.
  2. The firms will be able to guide the big firms & enterprises with the obligations & make necessary changes in the tax calculations.
  3. The firms will assist the companies to grasp the changing tax structure. All the hassle of remembering the new tax regulations will be eliminated with the automation of tax rules & tools.
  4. Filing the taxes and necessary norms becomes easier with the introduction of new tax policies within the stipulated time.
  5. The tax firms don’t waste any time guiding the business with the necessary adjustments required in filing taxes.

Final Thoughts!

The Biden administration is promising the people a well-planned recovery from the Covid-19 pandemic. The tax policies are aimed at helping the small & large businesses comply with the new tax rules at the right point in time. Contact the right kind of accounting firm to be upbeat with Biden’s tax policies & tax norms. The accounting firms are always on their toes and will guide the businesses to oblige to the tax regulations promptly.

Share this post on

Start Your Free Trial

Testimonials

Continued support

I would like to thank you for your continued support. I’m so glad everything turned out well. I owe you one.

Vishal Savadiya

Prompt service

George was outstanding; he fixed my issue within a couple of minutes and got me back to work! Thank you for such prompt service!

Lyndsey Chapman

Best tech support

Your tech person resolved this issue to the best of my satisfaction. He is very knowledgeable, helping and nice person. Thank you for this help.

Bipin Bhatt
KB Accounting & Tax Services

Exceptional service

I appreciate the exceptional service that Duke Williams always provided us at JS Morlu. He is patient, knowledgeable and extremely helpful.

John S. Morlu
Global Managing Partner

Quick response

As always, It was a very positive experience having your technician solve the issue we were currently experiencing.

Brad Pollack
Retail Service Options

Kristi PArker

Was assisted with permission setting, easy process. Thank you.

Origin Books

Mary L Zembruski

They have always promptly resolved any issues I have contacted them about.

Wilson Landscaping

Christopher Hutzel

Easy of working and very helpful

Christopher Hutzel
Compactor Service

Mandy Leong

Great customer service

Mandy Leong
Managed Staffing

Taylor Hill

Not a problem since I started years ago. Support is amazing and couldn’t be quicker. Just tonight, I emailed them and within 1 hour David helped me through an issue and resolved it as quick as I could have asked. Glad I found these guys.

Taylor Hill
Hill Tax, Payroll & Bookkeeping

Serina McCoy

Service was very quick to resolve the issue we had with logging in. Michael Olson emailed and called with in a few minutes on realizing we had an issue and had us back up and working quickly.

Serina McCoy
Gilberts Mobile Service

Mark Tevrucht

thank you reason for stars is my opion nothing is perfect

Mark Tevrucht
T&T AUTO & TRUCK

Nancy Evans

Easy to work with Aaron.

Nancy Evans
Nancy P Evans CPA PC

Tom Cloninger

Excellent service! Very responsive!

Tom Cloninger
RAN Accounting & Consulting

Rich Durso

Anderson solved my issue quickly and efficiently!

Rich Durso
RTD

Juli Hale

We’ve been very happy with the service so far. I would highly recommend Sagenext for hosting QuickBooks and other software. Thank you Michael Olson!

Juli Hale
Vico Plastics, Inc.

Nabila Qureshi

Great Customer service and support. Will highly recommend Aaron was very helpful and knowledgeable

Nabila Qureshi
Tax King USA Inc

Yelena V Moshkovsky

Great service with persistence to solve the issue and easy to reach. Anderson was a lot of help with my remote desktop issue.

Yelena V Moshkovsky
Supporting Strategies

IT Director

Sage Next have been great. We moved from 2 other quickbooks hosting providers to SageNext because it is the fastest server we could find which makes working on it much easier for our team. That plus their team is always available and very helpful!

IT Director
American Foods

Victoria

Very happy with the functionality of the hosted environment and excellent customer service. A human always answers the phone quickly and is always knowledgeable and resolve any issue quickly. Thank you Michael and your support team.

Victoria
Abacus

Cristen Rolen

Worst support team who are getting more time ever.

Cristen Rolen
Cristen CPA Firms

Ed

Aaron was extremely helpful, and resolved my issue quickly and professionally. Sagenext hosting services has been reliable, and support has always been great.

Ed
Zigo Associates

Peg Kelly

Michael Olson was very helpful, professional, knowledgeable and kind. He’s a keeper should have more employees like him. Highly recommend Sagenext.

Peg Kelly
All Star Therapy

Jon Graff

Support has been terrific, every time I’ve had issues I’ve been able to get help quickly which has resolved any issues. Michael Olson recently helped me resolve a backup issue. Thank you Sagenext

Jon Graff
The Reason Foundation

Candi

Prompt support when needed!

The College Music Society

Stacy

Sage is wonderful! Aaron was an incredible help to me!

Elfand & assoc

Brenda

Thank you so much! I use Quickbooks on their servers and they are very helpful for all my computer needs. Thank you Michael for your great support.

BDKdoor

Gwendolyn Terrell

Customer Service was great they was able to fix the issue in a timely matter.

National Tax Center

Newsletter

Free Trial

Sagenext Trial