Our Blogs

On our blogs you will find our Tax Sherpa Stories series as well as additional posts covering all manner of tax topics. Some items are timely as there are multiple tax filing dates throughout the year and some items are important larger concepts.

Book An Appointment

Our Services

The Tax Relief for American Families and Workers Act of 2024 - What We Know So Far

tax concepts

January 17, 2024•1 min read

In a recent video, Neal McSpadden offered an insightful analysis of the proposed Tax Relief for American Families and Workers Act of 2024. This pending legislation holds significant implications for small business owners and solopreneurs, with potential changes to tax credits, deductions, and more.

Understanding the Act:

Child Tax Credits: The Act proposes adjustments to the child tax credit, including inflation indexing, which could impact many families.
Research Deductions: Crucial for small businesses, the Act might change how research expenses are deducted, offering potential relief and more immediate benefits.
Impact on Small Businesses: The proposed Act could affect various aspects of business operations, from financial planning to tax liability.

The Tax Relief for American Families and Workers Act of 2024 could usher in significant tax changes. Small business owners and solopreneurs should stay informed to prepare for these potential shifts. Neal's video provides a comprehensive guide to understanding these changes.

Senate Publication: https://www.finance.senate.gov/imo/media/doc/the_tax_relief_for_american_families_and_workers_act_of_2024_technical_summary.pdf

relief act2024tax law

Neal McSpadden

Neal went from owing the IRS over $1,300,000 to Zero and in so doing discovered the world of tax planning. Since 2011 he's helped tens of thousands of clients save hundreds of millions of dollars on overpaid income taxes.

Back to Blog

Frequently Asked Questions

What's the difference between tax advisory and just filing my taxes?

Filing your taxes each year is a necessary task, but it is always backwards looking. Tax advisory works with you throughout the year to make sure that you are on the right track when it comes to your taxes and have strategies in place to save money now.

I've heard about tax write-offs for small businesses. What exactly can I write off, and how does it benefit my business?

Tax write-offs, also known as tax deductions, are expenses that a business incurs that can be subtracted from its revenue to reduce the amount of taxable income. Common write-offs include office supplies, mileage, rent for a business location, and advertising expenses, among many others. By writing off legitimate business expenses, you can significantly reduce your taxable income, which can lead to a lower tax bill. It's essential, however, to maintain proper records and ensure that the expenses are truly business-related.

What's the difference between a tax deduction and a tax credit?

A tax deduction reduces the amount of your income that is subject to taxation, which in turn can lower your tax liability. Common deductions include expenses like mortgage interest, student loan interest, and business expenses. A tax credit, on the other hand, is a direct reduction of your tax bill. This means if you owe $1,000 in taxes and have a $200 tax credit, your tax due would be reduced to $800. Some popular credits include the Child Tax Credit, the Earned Income Tax Credit, and credits for energy-efficient home improvements.

I'm thinking of hiring an independent contractor instead of an employee. Are there different tax implications for each?

Yes, there are significant tax differences between hiring an employee and an independent contractor. When you hire an employee, you're responsible for withholding federal and possibly state income taxes, Social Security, and Medicare taxes from their paychecks. You also typically pay unemployment taxes on wages paid to employees. Independent contractors, on the other hand, are responsible for their own taxes. As a business owner, you'd provide them with a Form 1099-NEC (if you pay them $600 or more during the year) instead of a W-2, and they would be responsible for their own self-employment taxes. It's important to correctly classify your workers, as misclassifying can lead to penalties.

Get in touch with us

Have questions? Use the form here and one of our knowledgable staff will get back to you as soon as possible.

(678) 944-8367

office@taxsherpa.com

3900 CROWN RD SW STE 16709

Monday - Friday, 10:00 am - 5:00 pm

Send us a message

Follow Us

Disclaimer: The content presented on this website is intended for informational purposes only and is not tailored to the needs of any specific individual or entity. It should not be considered as financial, investment, or tax advice. The information provided is general in nature and does not account for individual circumstances or financial positions. Before making any financial or tax-related decisions, we strongly advise consulting with a qualified professional who can provide guidance tailored to your individual situation. All information on this site is provided in good faith, but we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information on the site. Use of this site and reliance on its content is solely at your own risk.