Aprio Releases 2024 End-of-Year Tax Update

Aprio, a top 25 business advisory and accounting firm, has released its 2024 End of Year Tax Update, highlighting 2024 tax updates and factors that will significantly impact tax planning for 2025 and beyond.

Notably, the guide hones in on the planned sunset of provisions made to the 2017 Tax Cuts and Jobs Act (TCJA). The majority of the changes made by the TCJA are scheduled to expire, or “sunset,” on December 31, 2025, unless Congress acts to extend them. Tax areas that could be affected include business, individual, estate planning, international, employee retention credit programs (ERC), employment, and state and local taxes.

“While the upcoming tax year brings uncertainty for businesses and individuals alike, Aprio’s tax advisors are poised to act should any major tax laws change that could impact clients,” said John Rose, Director of National Tax Services at Aprio. “This year’s End-of-Year Tax Update provides a deep dive into major tax updates, pain points, and opportunities for entities of all tax areas. With the release of Aprio’s EOY tax update, businesses and individuals can begin early preparation and navigate the evolving tax landscape effectively.”

The current legislative landscape, including the upcoming presidential election, has the potential to create even more uncertainty and complexity around a variety of key tax provisions. With this guide, Aprio has provided businesses and individuals with insights into how they can navigate the complex rules and regulations in the ever-changing tax world.

Highlights from the guide include:

Business Tax: The most significant change to the business tax landscape scheduled to occur at the end of 2025 is the planned sunset of the qualified business income (QBID) 20% deduction (Sec. 199A).
Individual Tax: With the sunset of the TCJA, the biggest impact for most people will be the increase of tax marginal rates to pre-2017 levels, essentially bringing about a tax increase for most taxpayers.
Estate Planning Tax: With the sunset of the TCJA, anticipated changes affecting estate tax law would go into effect on January 1, 2026, including (1) federal estate tax exemption will decrease by 50%, (2) capital gains taxes for heirs upon asset disposition may increase, and more.
International Tax: 2024 brought the notice of IRS Section 961 adjustments, which sets rules to ensure that the appropriate basis is transferred to the U.S. corporation in these transactions, helping to prevent double taxation or loss of basis. The double taxation concern has increased in importance due to the enactment of the TCJA, causing greater amounts of CFC earnings and profits (E&P) to become previously taxed E&P (PTEP).
Employee Retention Credit Program (ERC): The ERC was originally enacted through the passage of the CARES Act in 2020. With that, the expiration for filing new ERC claims for 2021 expires on April 15, 2025. In August, the IRS announced additional updates to the ERC program, including a limited reopening of the Voluntary Disclosure Program (VDP).
Employment Tax: Anticipated changes will affect both federal and state employment taxes, with changes to state and local reporting and taxation requirements to consider, some in place in 2024, others beginning in 2025.
State & Local Tax: One of the biggest state reactions to the TCJA was the creation of the pass-through entity tax (PTET) regime, which allowed shareholders and owners of PTE businesses (partnerships and S corporations) to “workaround” the cap on state and local tax deductions at the federal level. Upon sunset, changes to PTET depend on how each state initially enacted its PTE tax.

To explore these end-of-year tax updates and prepare your 2025 tax strategy, visit Aprio.com and download your copy of the 2024 End of Year Tax Update or contact an Aprio advisor directly.

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