Whether the mid-term results were what you expected or not, for tax professionals the big question looming in the last six weeks of the year is whether we need to anticipate changes to tax laws before year end.
To start, a 2023 government budget has not yet been passed, leaving room for last minute agendas to be pushed through. Historically, a party losing control takes the opportunity to push through legislation before the clock strikes midnight on New Year’s Eve.
Current bills are looming but there is no indication yet as to what the bi-partisan support will be with the exception of items like disaster aid for areas like Florida and Puerto Rico.
Proposals without clear bi-partisan support include the extension of research and development credits for businesses, expanded child tax credit as well as expanded child and dependent care credits, and the extension of the mortgage insurance premium deduction.
Whenever Congress faces a situation of required spending bills to be passed, in the case of the needed 2032 budget, there usually is more push for compromise to push through varying agendas.
A lot of eyes remain on the SAFE Banking Act impacting cannabis businesses nationwide. The industry continues to struggle with securing bank accounts and lending services despite the legalization of cannabis sales in most states. The SAFE Banking Act has been passed by the House twice without success in the Senate. Pressure created by the incoming seat changes is hoped by many to be enough to get this legislation through.
What does this mean for tax professionals?
Keep your eyes peeled for the next six weeks. This time of year is especially challenging as we try to prepare year-end tax planning for clients not knowing what provisions may end up being extended to impact 2022 and what may be new for next year.
