I’m still not understanding the correlation between a difference in a person’s tax filings and build back better.
Dan, every year our tax liability is adjusted to pay for everything the government does. The Build Back Better bulls will be scrutinized more because of the huge spending bills and the funding for them. Some parts of the recent bills are funded by reallocating funds from other programs that are discontinued or modified. Other parts are directly back to your current income tax, fees, and other taxes hurried into anything they can hide it in. Same goes for your state budget.
Most income tax changes are subtle and most lower middle class don’t see much of a change. Often small business owners are hit the worst. It can be little things like a change in Mileage reimbursement, % of deductions, what and how existing rules apply, other “credits” like child care caps, medical, and so on.
Simple returns with basic W-2’s, mortgage interest, property tax, dependents…. are usually adjusted by late December and is available (in software) by early January. Families in this category see a little fluctuation and it’s usually a slight change in tax credits and tax rate.
I haven’t had a W-2 in decades. I have two businesses and some years I’m just dumbfounded. What and how they tweak what I can claim or a percentage of something can be as fluid as a swamp. I leave the majority of it to my accountant. He will have me re-categorize expenses and he works his magic.
One of the big tickets that was in the funding for earlier BBB bills was changes to inheritance, capital gains, and LAND TRUSTS. As far as I know, none of these major changes hit this tax year. But modify roll over rules, one time exemptions, and worst – busting land trusts. Imagine having a dairy farm that has the land in a family trust. If that’s busted and it goes in your name as a capital gain and you need to pay even 20% on a 1.5 million dollar farm. 300k tax bill would squash almost any small farm.
