United States Tax Changes — Live Tracker

What changed

Many Tax Cuts and Jobs Act (2017) provisions are scheduled to lapse on 31 December 2025. These include the 20% qualified business income (QBI) deduction under Section 199A, the doubled standard deduction ($29,200 for married filing jointly in 2024), expanded child tax credit, and lower individual income tax brackets. The proposed One Big Beautiful Bill in Congress aims to extend most provisions permanently, but legislation has not yet passed. If no action is taken, 2026 rates revert to pre-2018 levels.

Who it affects

• Pass-through business owners using the 20% QBI deduction (sole traders, S-corps, partnerships)
• All individual taxpayers subject to income tax
• Families claiming the child tax credit

What to do

Monitor congressional progress on TCJA extension. If the QBI deduction is at risk, consider accelerating income into 2025 or deferring deductions. Work with a CPA on year-end planning before December 2025.

What changed

Bonus depreciation under the TCJA has been phasing down since 2022: 100% (2022), 80% (2023), 60% (2024), and 40% for qualifying property placed in service during 2025. The phase-down continues to 20% in 2026 and 0% in 2027 under current law. Qualifying property includes machinery, equipment, computers and some qualified improvement property. Proposed legislation aims to restore 100% bonus depreciation retroactively but has not yet been enacted.

Who it affects

• Businesses purchasing qualifying depreciating property
• Companies making capital equipment investments in 2025
• Real estate investors buying qualified improvement property

What to do

If 100% bonus depreciation is reinstated retroactively, you may need to file an amended return. For 2025, plan capital purchases knowing only 40% is immediately deductible; the remaining 60% depreciates over the regular asset life.

What changed

The TCJA changed Section 174 so that specified R&D expenses incurred from 1 January 2022 must be capitalized and amortized over 5 years (domestic R&D) or 15 years (foreign R&D) on a straight-line basis, with a midpoint convention in year one. Previously, companies could deduct R&D expenses immediately. This significantly increases taxable income and effective tax rates for companies with large R&D budgets. Bipartisan legislation to reverse the change has repeatedly stalled in Congress.

Who it affects

• Tech companies and startups with significant software development costs
• Biotech, pharmaceutical and engineering companies
• Any business claiming R&D tax credits (credit and amortization interact)

What to do

Review your 2022 and later tax returns to ensure R&D expenses were capitalized correctly. Work with a tax advisor to model cash tax impact and consider whether the R&D credit offsets the amortization effect. Consult a CPA on how software development costs are classified.

What changed

The IRS lowered the Form 1099-K reporting threshold from $20,000 (and 200+ transactions) to $5,000 for the 2024 tax year, as a transition year before the full $600 threshold applies. Payment settlement entities including PayPal, Stripe, Venmo Business, Etsy and similar platforms must issue a 1099-K to any business account receiving $5,000 or more in the calendar year. All amounts received are taxable income regardless of whether a 1099-K is issued.

Who it affects

• Freelancers and self-employed individuals paid via platforms
• Small businesses using PayPal, Stripe, Venmo or Etsy
• Online sellers on Amazon, eBay or similar marketplaces

What to do

Collect all 1099-Ks when filing your 2024 tax return and reconcile against your own records. Even without a 1099-K, all income is reportable. Ensure your accounting software captures all platform receipts to avoid discrepancies with IRS records.

What changed

The Inflation Reduction Act (August 2022) created a new 15% Corporate Alternative Minimum Tax effective for tax years beginning after 31 December 2022. The CAMT applies to corporations whose average annual adjusted financial statement income (AFSI) exceeds $1 billion over a three-year period. AFSI is based on book income rather than taxable income, limiting the impact of accelerated depreciation and other deductions. Treasury issued final regulations in 2024 clarifying AFSI adjustments and the CAMT credit mechanism.

Who it affects

• Large corporations with average book income over $1 billion
• US subsidiaries of large multinational groups meeting the threshold
• SMEs are not affected (the $1 billion threshold excludes the vast majority)

What to do

SMEs can disregard CAMT. If your group approaches the $1 billion AFSI threshold, engage a tax advisor to model the impact and review the interaction with bonus depreciation, R&D amortization and foreign tax credits.