At CSR, we are NOT tax experts. However, our clients (whether they are for profit, non-profit, or in the government sector) need to be aware of the changing landscape and defend or take advantage of this important external component of the SWOT analysis (remember how we discussed this under the “T” for SWOT??).
It’s always going to be a challenge to understand the right path to take, and this year is no different. Items to be aware of range from potential corporate rate hikes to expanded clean energy incentives - being on top of this is key. Here’s the top 8 that caught our attention (thanks AI for the list!):
1. Potential Corporate Tax Rate Increase:
One of the most significant proposed changes is an increase in the corporate income tax rate from 21% to 28%. This could significantly impact the bottom line of larger corporations.
2. Expanded R&D Tax Credit:
The good news for innovation-driven businesses is the expanded Research and Development (R&D) Tax Credit. Eligible businesses can now offset up to $250,000 of their payroll taxes with this credit, up from the previous $150,000 limit.
3. Enhanced Clean Energy Incentives:
The government has doubled down on promoting clean energy with 16 new or expanded credits and deductions. These include credits for solar panels, electric vehicles, and energy-efficient buildings.
4. Increased Retirement Plan Credits and Benefits:
The SECURE Act 2.0 aims to encourage retirement savings. Small businesses offering retirement plans can now claim a larger Employer Pension Startup Credit. Additionally, the credit for employer contributions to employee retirement accounts has increased, making it more attractive for businesses to sponsor retirement plans.
5. Student Loan Repayment Assistance:
Employers can now contribute directly to employees' student loan repayments, and these contributions are treated as pre-tax employee benefits. This can be an attractive employee perq and a valuable tax benefit for businesses.
6. Adjusted Business Loan Interest Deduction:
The maximum deduction for business loan interest has been increased to 35% of adjusted taxable income, up from 30%. This change provides some relief for businesses carrying significant debt.
7. State Tax Considerations:
State tax laws also evolve, so staying informed about your specific state's regulations is crucial.
8. Seek professional guidance:
Make sure you consult a qualified tax professional so they can help you understand how these changes apply to your specific business and optimize your tax strategy. We have relationships with all sorts of folks in this space and would be happy to make intros.
As a small business owner, staying on top of tax changes can feel like a full-time job. This year's got some big ones, from potential corporate rate hikes to clean energy incentives. We aren’t tax experts, but keeping an eye on these shifts can mean saving money or taking advantage of new opportunities. As you know from conversations we have with you, we aren’t suggesting you become a tax whiz. Just remember the key areas, like the expanded R&D credit or student loan repayment perq, and then get a qualified pro to help you navigate the specifics. They'll make sure you're using these changes to your advantage and keeping more of your income.
Ready for 2024's Tax Changes? Let's Tackle Them Together
Tax changes are coming in 2024, and they could significantly impact your organization. Our expertise in strategic planning and implementation across various sectors makes us your ideal partner in navigating these shifts.
CSR is equipped to help you adapt and seize opportunities. Don’t navigate these changes alone. Reach out to us, and let's ensure your organization is set for success in the evolving landscape.
About Author
Alex Muñoz, Principal & Co-owner at CSR, is a seasoned entrepreneur with over 30 years of experience in driving strategic growth. Known for challenging norms and fostering significant ROI, Alex's diverse background spans from manufacturing to non-profits.