Individual Tax Services

Congress Passes $1.2 Trillion Infrastructure Bill with Minor Changes to Code

Like any infrastructure bill, the legislation provides spending, more than $500 million of it "new", on roads, highways, bridges, public transit, and utilities. The bill is significantly smaller than what was originally proposed by President Biden in April.

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How Federal Taxes Will be Affected With a Biden Presidency

Biden's tax policy includes numerous changes that could impact individual taxpayers' tax bills, particularly those with higher incomes.

Read more on the proposal for personal taxes.

What are the Latest Tax Updates From Washington?

• [November 2021]The IRS has released the 2022 cost-of-living adjustments for more than 60 tax previsions. With inflation up significantly this year, mainly due to the COVID-19 pandemic, many increased considerably over 2021. As you implement 2021 year-end tax planning strategies, be sure to take these 2022 adjustments into account.
• [November 2021] The budget reconciliation bill, Build Back Better Act, is currently still being formulated and passage is uncertain. Here is how it may impact your year-end tax planning.
• [November 2021]The Infrastructure Investment and Jobs Act is directed toward massive investment in infrastructure projects across the country. There are also some noteworthy tax provisions you should know about, including early termination of the Employee Retention Credit, new information on digital assets, and miscellaneous tax provisions.
• [May 2021] President Biden recently announced his $1.8 trillion American Families Plan (AFP), the third step in his Build Back Better policy initiative. The announcement followed the previous releases of the proposed $2.3 trillion American Jobs Plan and the Made in America Tax Plan. These plans propose major investments in various domestic initiatives, such as expanded tax credits for families, offset with tax increases on high-income individual taxpayers and corporations. More information on proposed tax changes.
• [March 2021] The American Rescue Plan Act (ARPA) was enacted on March 11, 2021. This newest legislation aimed at providing economic and other relief from COVID-19 includes $1.9 trillion in funding for individuals, businesses and state and local governments. ARPA extends and expands some of the critical provisions in the CARES Act and the Consolidated Appropriations Act (CAA). It also includes some new provisions that should come as welcome news to many families and businesses. Details on ARPA
• [December 2020] The COVID-19 Relief Act was signed into law on 12/27/20 to provide additional economic relief for individuals and businesses. Many of the CARES Act’s tax credits, set to expire on 12/31/20, were extended in this newest bill. Details on COVID-19 Relief Act
• [March 2020] The Coronavirus Aid, Relief, and Economic Security (CARES) Act was a $2 trillion bill with an array of significant tax-saving provisions for both individuals and businesses. The bill, signed into law on 3/27/20, includes provisions for 2020 to create needed cash flow and it could affect prior tax years. Details on CARES Act

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What are the 2021 Tax Rates and Deductions?

• Individual Tax Rates: 2021 tax bracket thresholds were increased by approximately 1% over 2020 levels. Download the SVA tax guide: 2021 Tax Guide
• Standard Deduction:
  • $25,100 (married filing jointly)
  • $18,800 (head of household)
  • $12,550 (single)
• Child Tax Credit: The American Rescue Plan Act (ARPA) made several changes to the CTC for 2021. For example, it expanded the credit for eligible taxpayers from $2,000 to $3,000 per child ages six and above, and $3,600 per child under age six. It also made 17-year-olds eligible to be qualifying children for the first time and made the credit fully refundable. It also provides for monthly advance payments of the credit that will be paid from July through December 2021.
• Alternative Minimum Tax (AMT): AMT exemption is $114,600 (married filing jointly) and $73,600 (single). The threshold for phase-out of the exemption starts at $1,047,200 (married filing jointly) and $523,600 (single).
• Estate and Gift Tax Exemption: The lifetime exemption is $11.7 million. Estate and Trust Planning may be impacted by future legislation. Check out these articles to learn more. Critical Estate Changes Could be On the Horizon and Trust & Estate Planning 2021 With an Eye to Biden's Administration
• Pass-Through Income Deduction: Up to 20% of qualified business income is subject to various limitations. The deduction is not available for professional service businesses (including accounting, health, law, consulting, athletics, financial services, and brokerage services) except architecture and engineering.
• Net Operating Loss (NOL) Carryback: With the passing of the CARES Act, businesses and individuals can now carryback NOLs from 2018, 2019, and 2020 to the prior five tax years. Note that any losses arising in 2021 must be carried forward to future years. To understand the modified rules, view our Biz Tip on NOLs and AMT.

What are the 2022 Tax Rates and Deductions?

• Individual Tax Rates: 2022 tax bracket thresholds were increased by approximately 1% over 2020 levels. Download the SVA tax guide: 2022 Tax Rate Card
• Standard Deduction:
• Single: $12,950
• Head of Household: $19,400
• Married Filing Jointly: $25,900
• Married Filing Separately: $12,950
• Child Tax Credit: $2,000 per qualifying child/year. The eligibility is extended to age 17.
• Alternative Minimum Tax (AMT):
• Exemptions:
• Single or Head of Household: $75,900
• Married Filing Jointly: $118,100
• Married Filing Separately: $59,050
• Exemption Phaseouts Based on AMT Income:
• Single or Head of Household: $539,900 - $843,500
• Married Filing Jointly: $1,079,800 - $1,552,200
• Married Filing Separately: $539,900 - $776,100
• Estate and Gift Tax Exemption: The lifetime exemption is $12,060,000 with a top tax rate of 40%. A surviving spouse may be able to use the deceased spouse’s unused estate tax exemption. The annual gift tax exclusion is $16,600 per recipient ($32,300 if spouses elect “split-gift” treatment.
• Section 199A Deduction for Owners of Pass-Through Entities: Up to 20% of qualified business income is subject to various limitations. When an owner’s taxable income exceeds $170,050 ($340,100 for joint filers), the following limits are phased in over a $50,000 range ($100,000 range for joint filers):
• Deduction isn’t available for income from specified service businesses.
• Deduction can’t exceed the greater of the owner’s share of:
• 50% of the amount of W-2 wages paid to employees by the qualified business during the tax year, or
• The sum of 25% of W-2 wages plus 2.5% of the cost of qualified property.
• Section 179 Expensing and Bonus Depreciation:
• Section 179 expensing limit: $1,080,000
• Section 179 phaseout threshold: $2,700,000
• Bonus depreciation limit: 100%

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