The House Ways and Means Committee approved a bill Sept. 13, 2018, that would make permanent several tax reform provisions that are set to expire after 2025. The Protecting Family and Small Business Tax Cuts Act of 2018 (H.R. 6760) addresses bonus depreciation and the estate tax, among other tax provisions.
The Tax Cuts and Jobs Act, passed in 2017, reduced taxes for all businesses, but only the tax cuts for incorporated businesses operated as C corporations are permanent. The vast majority of farms and ranches, however, file their taxes as sole-proprietors, partnerships or S corporations.
“Failure to [make these provisions permanent] will result in a huge tax increase. In addition, the uncertainty caused by temporary tax provisions makes the already tough business of running a farm or ranch even harder,” American Farm Bureau Federation President Zippy Duvall wrote in a letter urging committee members to support the bill.
The legislation would make permanent the following provisions:
- Reduced pass-through tax rates and expanded brackets
- The Section 199A new 20% business income deduction
- Unlimited bonus depreciation (expensing)
- The doubled estate tax exemption ($11 million person/$22 million couple)
- The increased alternative minimum tax threshold for individuals
“We must keep building off the momentum from last year’s tax reform to ensure our economy keeps booming,” said Rep. Kevin Brady, R-Texas, committee chairman. “That’s why we’re here today to change the culture of Washington – from one that waits an entire generation to fix a broken tax code to one that keeps our code ahead of the pack and the best in the world.”
Source: AFBF, House Ways and Means Committee