H.R.5374 - Bring Small Businesses Back Tax Reform Act114th Congress (2015-2016)
|Sponsor:||Rep. Hultgren, Randy [R-IL-14] (Introduced 05/27/2016)|
|Committees:||House - Ways and Means|
|Latest Action:||House - 05/27/2016 Referred to the House Committee on Ways and Means. (All Actions)|
This bill has the status Introduced
Here are the steps for Status of Legislation:
Summary: H.R.5374 — 114th Congress (2015-2016)All Information (Except Text)
Introduced in House (05/27/2016)
Bring Small Businesses Back Tax Reform Act
This bill amends the Internal Revenue Code to establish new maximum individual tax rates for qualified business income that does not exceed $1 million (i.e., small business income). The maximum rates are: (1) 10% of such income not exceeding $150,000, and (2) 20% for income that exceeds $150,000 and is not more than $1 million.
The rates apply to up to $1 million of qualified business income that is: (1) gross earnings derived by an individual from any active trade or business carried on by the individual, excluding deductions attributable to the trade or business; and (2) the taxpayer's distributive or pro rata share of pass-through income from entities such as a partnership or S corporation. Qualified business income does not include capital gains, interest, dividends, or royalties.
For taxpayers that are not a corporation or a partnership with a corporation as a partner, the bill repeals the annual limitation on the election to deduct certain depreciable business assets.
The bill also permits certain small businesses whose average gross receipts do not exceed $25 million (currently, $5 million) to use the cash accounting method without limitations and exempts such businesses from inventory rules.