Both chambers of Congress, the U.S. Senate, and the U.S. House of Representatives meet. … [+]
There doesn't seem to be a dull moment in recent Congresses, and 2024 is already shaping up to be a busy year for small businesses from a legislative perspective. The year began with the extension of the Continuing Resolution (CR), which temporarily funds the government, and the introduction of a bipartisan, bicameral tax package.
The introduction of this tax package was timely given that much of 2024 and 2025 will be spent on tax policy negotiations as a provision from 2017. Tax Cuts and Jobs Act (TCJA) And of course, 2024 is a presidential election year. A total of 435 seats in the House of Representatives and 34 seats in the Senate will be added, with 86 chambers in 44 states holding regular parliamentary elections this November.
Here's what these issues mean for Main Streets across America.
government funding
Weeks later, lawmakers had a package ready to fully fund the rest of the government through the end of September, but Congress has until Friday evening to pass the bill. To keep the federal government running after that, both the House and Senate will need to finalize a spending package for fiscal year 2025 by October. As mentioned above, government shutdowns have a negative impact on small businesses. These prevent business owners from accessing critical resources such as financing and loans, disaster relief, and federal contracting needs.
Introduction to Tax Relief for American Families Act
Earlier this year, a bipartisan, bicameral Tax Relief for American Families Act The system was introduced by Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, and Jason Smith (R-Missouri), chairman of the House Ways and Means Committee. This bill includes several features that will have a significant impact on small business owners, including an expansion of the Child Tax Credit (CTC), Section 179 expansion, “bonus” depreciation, and disaster relief for businesses affected by recent natural disasters. Contains several provisions that give. Assistance to communities affected by the Ohio Railroad Accident. If enacted, this bill would allow businesses of all sizes to immediately deduct the cost of U.S.-based research and development investments, increasing the amount of investments that small businesses can immediately write off from $1 million to $1.29. I will do it. a million. The bill would also extend 100% bonus depreciation from January 1, 2023 to December 31, 2025. For business owners, this means that a large portion of the purchase price of eligible assets, such as machinery, can be immediately deducted rather than depreciated. It is turned off for the “lifetime” of the asset. Finally, the CTC expansion would phase in the maximum reimbursement by 2025, increasing the amount a parent with two children earning $15,000 would receive from her $1,875 to her $3,600. will be raised to. Parents may also be allowed to use previous year's income if they can obtain greater credit.
For now, the tax plan is pending in the Senate, but its fate is uncertain due to the closeness of Senate Republicans. But strong bipartisan support in the House could influence Senate negotiations.
TCJA tax expiration
In 2025, several regulations will come into force. Tax Cuts and Jobs Act (TCJA) The impending deadline will lay the groundwork for a national debate on U.S. tax policy. Although the TCJA included personal tax cuts for most American households, it also created a permanent 40% tax cut for large corporations and only a temporary 20% deduction for small businesses. Ta. Business sentiment among small and medium-sized enterprises regarding tax laws is gloomy. According to a May 2021 poll by Small Business For America's Future, more than 70% of small business owners believe the current tax code favors large businesses. The expiration of the TCJA is an opportunity for Congress to improve the tax code for small businesses, but it is unclear whether consensus will be reached and we do not yet know which administration will occupy the White House in 2025, so what will happen with the expiration? It's difficult to say. handled.
2024 Elections and Small Business Confidence
2024 is a key election year between presidential and federal elections, as well as state and local elections across the country. As candidates make their case to voters, they need to consider the high level of trust Americans have in small businesses. In fact, according to PEW, 86% of Americans view small businesses positively, while only 29% view large businesses positively. Positive views of small businesses are also bipartisan, with an overwhelming majority of Democrats and Republicans viewing small businesses positively.
Small businesses have a critical role to play in the upcoming election year as trusted institutions both in their local communities and nationally. Business leaders can take meaningful action, such as giving employees time off to vote and supporting federal and state policies that increase access to voting.
In the short term, small business owners once again find themselves in a position of uncertainty regarding federal funding. The federal government has become an increasingly partisan and malicious process that will only harm all Americans. Between the election and the impending tax debate, 2024 will be a critical year for small businesses, providing opportunities for entrepreneurs to advocate and lead on these issues.
