AICPA recommends tax law changes

The American Institute of CPAs submitted a set of legislative priorities in a letter to congressional leaders earlier this month, suggesting possible changes to the tax rules.

In a March 6 letter to the Republican and Democratic leaders of Congress's main tax committees, the House Ways and Means Committee and the Senate Finance Committee, AICPA Tax Executive Committee chair Blake Vickers recommended a number of legislative proposals:

• Include the Freedom to Invest in Tomorrow's Workforce Act (H.R. 1151 / S. 756), allowing 529 plan funds to be used for post-secondary credential expenses;
• Provide permanent and consistent tax relief to individuals and businesses affected by natural disasters, such as the Filing Relief for Natural Disasters Act (H.R. 517 / S. 132);
• Retain the qualified business income deduction and expand the QBI deduction; limit phase-in range;
• Extend the Section 174 research and experimental costs expensing and other related expired/expiring provisions of the Tax Cuts and Jobs Act of 2017;
• Preserve the pre-TCJA full deduction for all state and local taxes paid or accrued in carrying on a trade or business, whether paid at the entity level or by a partner/owner;
• Continue the TCJA higher exemption amounts for the individual Alternative Minimum Tax, which simplifies filing for many taxpayers;
• Preserve the current availability of the cash method of accounting for tax purposes;
• Increase the Form 1099-K reporting threshold from $600 to $10,000 or above for third-party payment platforms; and,
• Include the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act (S. 400), which would provide certainty to businesses by making a temporary paid family leave tax credit permanent.

The letter comes as Republicans in Congress prepare a reconciliation bill that will extend the expiring provisions of the Tax Cuts and Jobs Act, such as the QBI deduction, while adding campaign promises from President Trump, such as making income from tips, overtime and Social Security tax exempt, as well as interest on car loans for American-made vehicles. A new proposal emerged last week from Commerce Secretary Howard Lutkin, who said Trump wants to exempt people who earn less than $150,000 per year from paying taxes.

"I know what his goal is — no tax for anybody making under $150,000 a year," Commerce Secretary Howard Lutnick said in an interview with CBS News, according to Kiplinger. "That's his goal. That's what I'm working for."

The AICPA has more tax changes beyond the ones listed above. The AICPA's full 2025 Tax Legislative Compendium contains 69 proposals, including 14 disaster tax relief recommendations. The overall goal is to improve tax administration, make the Tax Code fairer, and effectively promote important policy objectives.

"Each new Congress, the AICPA sends Congress our recommendations for simple fixes to technical issues they can address as they draft tax legislation," said Melanie Lauridsen, the AICPA's vice president of tax policy and advocacy, in a statement Monday. "Our tax legislation priorities include recommended proposals that would reduce uncertainty and complexity for taxpayers, improve simplification within the tax system, and transform how taxpayers and tax practitioners interact with the IRS, while our 2025 Compendium addresses significant issues affecting businesses, taxpayers and their accounting representative."