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  • Michael J. Conard, Jr. EA

Adapting to Changes: How Recent Tax Reforms Impact Individuals and Businesses in Wisconsin

Wisconsin has seen a series of tax law changes in 2023, affecting both individuals and businesses. These reforms, spanning from deductions to property taxes, are significant for tax preparation in De Pere and Green Bay. Understanding these changes is crucial for effective tax planning and compliance.


1. Increased Capital Loss Deduction: For most taxpayers, the maximum deduction for a net capital loss has been raised from $500 to $3,000. This change is particularly beneficial for individuals with investment portfolios, offering a higher threshold for offsetting capital gains with losses.


2. Active Duty Military Pay Subtraction: There's now a subtraction available for certain pay received from the federal government during active military service. This provides tax relief for military families and acknowledges their unique financial challenges.


3. Reduction in Tax Rates for Lower Brackets: The first and second income tax brackets have seen a reduction in their rates, now down to 3.5% and 4.4% respectively. This change is aimed at easing the tax burden on lower and middle-income earners in Green Bay and other areas.


4. Changes in Tuition and Fee Deductions: The subtraction for tuition and fees has decreased, impacting families and individuals investing in education. This alteration needs careful consideration during tax preparation, especially for students and parents in De Pere.


5. Modifications to Earned Income Credit: In line with federal changes, Wisconsin has adjusted its earned income credit, increasing the amount of investment income allowed before disqualification. This is particularly relevant for lower-income families and individuals seeking tax relief.


6. Repeal of Tangible Personal Property Tax: Starting January 1, 2024, Wisconsin will repeal its tangible personal property tax. This reform is a significant shift, aligning Wisconsin with neighboring states and impacting businesses that previously were taxed on machinery, equipment, and similar assets.


7. Sales Tax Increase in Milwaukee: To address structural deficits, Milwaukee and Milwaukee County have the authority to increase sales taxes. This includes a potential 2% sales tax in Milwaukee and an additional 0.4% in Milwaukee County, effective as early as January 1, 2024.


These changes reflect a dynamic tax landscape in Wisconsin, underscoring the importance of staying informed and working with knowledgeable tax professionals for effective tax preparation and strategy. For individuals and businesses in De Pere and Green Bay, adapting to these changes can mean significant differences in tax liabilities and potential savings.


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