There have been big changes in the tax law. However, such changes need to be enacted by Congress to become law and therefore any provisions discussed could be revised or eliminated. The Country should be taking steps towards simplifying the tax law for the individual but also for corporations. It’s time for tax reform in the US, and Joe Biden has made a serious effort to get the ball rolling with his Build Back Better program.
The first piece of the Build Back Better plan would allow the Alternative Minimum Tax (AMT) exemption to be increased by $75,000 (up from $53,700). The AMT was recently raised as part of the tax law passed in December.
For individuals, there has been a lot of talk about eliminating the personal exemption for those making over $500,000. This has brought up some concerns on a possible increase in taxes. However, the current tax rate for those making over $500,000 is already higher than the previous rate.
For corporations, the under-reported income is a big concern. The alternative minimum tax is looming in all major companies and this needs to be addressed. It would be nice to see tax rates lowered, but it’s important not to encourage companies to take any loopholes they can.