2021 Year-end tax planning 2021 YEAR-END TAX LETTER ARTICLES SERVICES 2021 YEAR-END WEBINAR SERIES ARTICLE Reconciliation bill ARTICLE Expiring tax provisions ARTICLE Employee retention credit – eligibility under the suspension test Year-end business tax planning webinar series Register today for the year-end business tax planning webinar series as specialists from our tax services practice discuss the latest regulations and the most common topics their clients are asking about. The program will address business interest limitation provisions, transfer pricing, global intangible low-taxed income (GILTI), Paycheck Protection Program (PPP) loan updates, tax implications for remote employees, expiring tax provisions and pending legislative tax changes, among other key topics. Register now 2021 webinar series agenda Register now U.S. international tax update and global tax developments Nov. 30, 2021 | 2 – 3 p.m. EST Significant U.S. international tax legislation continues to be drafted and debated at a fast and furious pace. At the same time, countries from around the globe and the OECD are still discussing comprehensive reform of international tax rules, specifically related to digital taxation. During our presentation, we will navigate through any new international tax law changes as well as update you on impending modifications to compliance forms and other expected developments. State and local tax update Dec. 1, 2021 | 2 – 3 p.m. EST In this seminar, we will cover the latest regarding states with pass-through entity tax elections and how it applies to your business. In addition, subject-matter specialists will share how your business could be impacted by nexus implications from employees working remotely. Don’t miss the latest on what is new in state and local tax. Federal tax update Dec 2, 2021 | 2 – 3 p.m. EST Our annual federal tax update will help businesses understand how recent legislative developments will affect their tax situation. In addition, attendees will learn how to apply these changes. We will also provide a retirement plan update in which our professionals will review the impact of recent legislative guidance on employer-sponsored programs and detail steps employers need to take. Recent tax alerts 2021 year-end tax letter Published on Oct. 13, 2021 History repeating? As we write this year’s tax letter, we are reminded of our 2017 edition. While it is said history does not repeat itself, sometimes its events are awfully similar. In the fall of 2017, it was unclear whether the Tax Cuts and Jobs Act (TCJA) would be enacted. Provisions were being debated and there was no clear path to passage. The same can be said of 2021: The $3.5 trillion “human” infrastructure reconciliation package remains mired in debate between moderate and progressives within the Democratic Party. The bipartisan infrastructure bill is also ensnared in the same conflict, with the legislation’s future likely tied to the outcome of a successful budget reconciliation package negotiation. With little likelihood of Republican support, all but three Democratic votes will be needed in the House and all 50 Democratic senators will be needed for passage using the reconciliation process. What does this mean for you? At this time, it is difficult to say as the contents of the reconciliation bill are currently being fiercely debated. Whether the package’s top line is $1.5 trillion, $3.5 trillion or some amount in between, if Democrats are able to compromise and successfully pass a bill, it’s certain to include major tax changes. These changes could come in the form of a capital gains rate increase, corporate and individual rate increases, and modifications to the estate and gift tax. Based on the initial House Ways and Means Committee bill (see our previous tax alert), most of the provisions would not become effective until 2022, with the notable exception of capital gains (currently proposed for an effective date of Sept. 13, 2021). Consequently, we strongly recommend you monitor the progress of the ongoing negotiations carefully. Accelerating income into 2021 and deferring significant expenses until 2022 where practical may be the best planning strategy depending upon your tax bracket. With respect to capital gains, if a September effective date remains, the planning door may have closed; however, it is possible there will be a change in effective dates as negotiations progress, possibly to the date of enactment or even Jan. 1, 2022. Our focus in this year’s letter is on the tax code modifications being considered, critical issues in healthcare and employee benefits, state and local tax trends as well as important reminders of expiring taxpayer-friendly provisions enacted via previous COVID-19 stimulus legislation. Tax planning should be addressed throughout the year and be an integral part of financial planning. As always, we encourage you to contact your Baker Tilly advisor to discuss how these issues impact your tax position. What's inside this year's letter? Download the full letter Reconciliation bill Expiring tax provisions Employee retention credit – eligibility under the suspension test Excess business loss limitation effective for 2021 IRS enhances compliance enforcement Updates in the world of virtual currency Employee benefits and executive compensation update Tax proposals provide accounting method planning opportunities for businesses in 2021 Plan your estate before it’s too late State and local tax news U.S. international tax and transfer pricing update View the individual insights Each insight will provide more information about the most pressing year-end tax issues. Questions? Contact our team 2020 YEAR-END TAX LETTER In case you missed it, check out our year-end tax planning letter from last year. Read the letter 2020 YEAR-END BUSINESS TAX PLANNING Take a look back at the year-end tax landscape in 2020. Watch the webinars The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments. 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