Are Tax Law Changes Coming?
This is the busiest time of year for you. Closing out financials. Getting ready to file tax returns. Then, BOOM! You hear on the news that Congress is proposing a tax law change retroactive to 2023. What?
Hundreds of questions run through your mind:
- Should we wait until we hear more?
- How will the changes impact us?
- Will Sage Fixed Assets still release its annual Tax Update that we have come to rely on?
Sage can't control Congress, but we can find ways to make change as painless as possible for you, our customer. If Congress enacts the law (H.R. 7024), we will provide an update to the 2024.1 tax release soon afterward.
February 9, 2024 Update - Bill Status
The U.S. House of Representatives passed H.R. 7024 on January 31. The bill's fate is uncertain in the Senate, where 60 votes are needed for passage, and opposition has emerged. With the Senate on recess from February 10 to 25, discussion on the bill is not expected until after February 25. Any amendments, whether in committee or on the floor, could complicate final approval, requiring re-passage by the House.
Answers to Your Questions
Q. When will the normal 2024.1 tax release be available?
A. The 2024.1 release was released on Wednesday, January 24, 2024. We recommend that you update to the 2024.1 version. We will provide an update to the 2024.1 version after these proposed tax changes take effect.
Q. What are the proposed Fixed Asset tax law changes for 168(k) Bonus Depreciation?
A. The 100% bonus depreciation percentage is extended for three (3) years, going back to 2023. Under the current text of the bill, 80% is the default rate for 2023; 100% can be elected. For 2024 and 2025, 100% will be in effect.
Q. Do I have to wait for the 2024.1.1 update to take 100% bonus for my 2023 tax return?
A. No. If you have installed 2024.0 or 2024.1, you can switch to 100% bonus (from the current 80%) and run a fileable 2023 Form 4562.
Watch this helpful how-to video:
Q. Are there any proposed tax law changes for Section 179?
A. Yes, but not for 2023. For 2024, there are increases to the expensing deduction and limitation.
- The Expensing deduction increases to $1.29 million.
- The Limitation increases to $3.22 million.
Q. Since it is not yet law when will Congress vote on the bill?
A. The estimated date range for a vote is after January 29 and into March or later. Yes, it’s a broad date range, but it’s the best we have at this time.
Q. The proposed changes don’t affect me. What should I do?
A. You can prepare a 2023 fileable Form 4562 with the Sage Fixed Assets 2024.0 or 2024.1 release. This is helpful if the potential bonus changes do not impact you (e.g., your company does not take Bonus Depreciation) or your company uses the Section 179 Expensing deduction, which remains unchanged for 2023.
Q. What should I do? How can I plan ahead?
A. Sage Fixed Assets already has several tools to help you start the planning process. For example, you could:
- From the top menu go to File > Edit Company > Add Book* to create another book to use for planning,
- select Asset > Copy Book to copy your Tax book information to an empty book to use for planning, and
- use the Depreciation > 168 Allowance Switch to change the Bonus Depreciation percent for the applicable assets.
* Add Book is available in Sage Fixed Assets–Depreciation, Network, or Premier versions.
Get More Information
Watch this site for updates from the Sage Fixed Assets team for the latest news. You can also go to Help > Sage Community Hub in your product to return here for information on product releases, articles on fixed assets topics, and links to other resources.
Our goal is to keep you informed, make your job easier, and help you maximize the benefit of your Sage Fixed Assets product.