2024 Presidential Tax Proposals: What CPA Firms Need to Know

As the 2024 presidential race develops, both Vice President Kamala Harris and former President Donald Trump have unveiled economic plans aimed at appealing to working-class voters. For CPA firms, understanding these proposals is crucial for strategic planning and client advisory. Let's break down the key elements:

Tax Policies:

1. Taxes on Tips:
   • Harris: Proposes eliminating federal income tax on tips, but maintaining payroll taxes.
   • Trump: Suggests removing both federal income and payroll taxes on tips.

2. Child Tax Credit:
   • Harris: Proposes expanding to $3,600 per child, with a $6,000 credit for newborns.
   • Trump: No specific proposal mentioned, but likely to extend 2017 tax cuts.

3. Corporate Taxes:
   • Harris: Previously suggested increasing from 21% to 35%.
   • Trump: Wants to further reduce from 21% to 15%.

4. Social Security:
   • Harris: No specific proposal mentioned.
   • Trump: Pledges to eliminate taxes on Social Security benefits.

Economic Policies:

1. Housing:
   • Harris: Offers up to $25,000 in assistance for first-time homebuyers; plans to build 3 million new housing units.
   • Trump: Suggests using federal land to address housing shortage; promotes homeownership through tax incentives.

2. Price Controls:
   • Harris: Proposes federal ban on prices for groceries.
   • Trump: No specific price control measures mentioned.

3. Trade and Tariffs:
   • Harris: No specific tariff proposals mentioned.
   • Trump: Suggests 10-20% tariff on all imports, with a 60% tariff on Chinese imports.

4. Energy:
   • Harris: No specific energy production proposals mentioned.
   • Trump: Plans to increase oil and gas production to lower energy costs.

Implications for CPA Firms:

1. Tax Planning: Prepare for potential changes in tip taxation, child tax credits, and corporate tax rates.

2. Real Estate Advisory: Consider the impact of proposed housing assistance and construction plans on property values and investment strategies.

3. International Tax: Stay alert to potential changes in tariffs and their impact on clients with international operations.

4. Retirement Planning: Anticipate possible changes to Social Security taxation and adjust strategies accordingly.

5. Healthcare Cost Analysis: Understand how proposed drug price controls might affect clients' healthcare planning and budgeting.

6. Energy Sector Analysis: Consider the potential impacts of energy production policies on relevant clients and investments.

At Madras Accountancy, we understand that these potential policy shifts create both challenges and opportunities for CPA firms. Our outsourcing services can provide the additional capacity and expertise needed to help your firm navigate these complex scenarios, allowing you to focus on high-value advisory services for your clients.

Remember, these are campaign proposals and may evolve. We'll continue to monitor developments and provide updates as the election approaches. For more information on how we can support your firm in preparing for potential tax policy changes, please contact us.