On November 26, 2018 House Ways and Means Committee Chairman Kevin Brady (R-TX) released the Retirement, Savings, and Other Tax Relief Act of 2018 and the Taxpayer First Act of 2018. These two pieces of legislation could have a major impact on individuals and small businesses.
Key proposals in the Retirement, Savings, and Other Tax Relief Act of 2018 include:
- Disaster tax relief provisions for those impacted by Hurricanes Florence or Michael, the recent California wildfires, and other presidentially declared disasters. The bill would allow tax-favored retirement plan withdrawals, special personal casualty loss rules, and employee retention credits for employers.
- Provisions from the Family Savings Act of 2018, such as penalty-free withdrawals of up to $7,500 for birth of a child, the repeal of maximum age IRA contribution, and multiple employer plan reform to provide small business employees with access to retirement plans.
- Provisions from the American Innovation Act of 2018, such as the ability for businesses to deduct up to $20,000 in start-up expenses, as well as preservation of net operating losses (NOLs) and credits attributable to the start-up period, in the event of an ownership change.
- Technical correction to The Tax Cuts and Jobs Act, which would allow qualified improvement property to be subjected to 100 percent bonus depreciation.
- The extension of a variety of expiring provisions.
The Taxpayer First Act of 2018 would place a substantial amount of responsibility upon newly-sworn Internal Revenue Service (IRS) Commissioner Charles Rettig to introduce sweeping reform to the IRS, including, but not limited to:
- Improved customer service experience that will adopt private sector best practices and provide taxpayers with more secure and varied means of communication, such as online and telephone call back services.
- A collaborative effort with the private sector to improve cybersecurity and protect taxpayers from identity theft refund fraud. Initiatives would include the implementation of an information sharing and analysis center and appointment of an IRS Chief Information Officer.
- Expansion of electronic service offerings, such as the creation of individualized online accounts and portals for taxpayers and more stringent electronic filing requirements.
For more information about this potential new tax reform, please contact Anatoli Pilchtchikov or Kevin O’Brien at 301.231.6200.