President Joe Biden’s 2024 budget proposals could negatively impact small businesses.
The measures include increasing the top capital gains rate for income over $1 million, eliminating the “step-up in basis” loophole, and raising the corporate tax rate. However, tax experts are skeptical about the chances of the proposals passing without revisions due to a divided Congress.
Biden’s proposal would raise the top individual rate to 39.6% for earners above $400,000 for a single taxpayer or $450,000 for married couples filing jointly. Currently, those earning above $578,125, or $693,750 for joint filers, are subject to a 37% rate. The proposal would take effect for taxable years beginning after December 31, 2022, potentially impacting more businesses.
Small business owners should be aware of these proposals, as certain provisions may reappear in future legislation.
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