- The President signed the biggest tax reform law in over 30 years
- Most of the changes will take place in 2018, expire after 2025
- Your tax return could look very different
- In many business areas, the computation will be very complex and will require on-going accounting and planning prior to year-end to maximize your tax savings
Small Business Tax Return Changes
- There could be up to a 20% deduction for individual owners of-flow through” businesses (sole proprietors, LLCs (excluding C corporations), partnerships, S Corporations, renal activity and REITS) on qualified business income. The new IR Code Section 199-A is very comprehensive and is not always easily understood. Because of its complexity and difficult interpretation, it is highly advised to consult with a tax professional – before the end of the year.
- The new corporate income tax rate will be a flat 21% (permanent)
- The business deduction for entertainment is eliminated
- The 50% meals deduction now includes meals on the employer’s premise
- Many more and enhanced business asset write-off options (including increased Section 179 deduction)
- New Net operating rules eliminating the two-year carry back and the percentage of the loss carried forward.
Individual Tax Return Changes
- Tax brackets have been expanded-ranging from 10% to 37% (lower top rate). There are no changes in the tax rates for long-term capital gains and dividends
- The is no longer a deduction of personal and dependent exemptions
- The maximum child credit is increased to $2000 per qualifying child (up to $1400 refundable) with higher income limits to qualify
- You will no longer be able to deduct state and local taxes above $10,000 per year
- There is a limit on new home mortgage interest deductions limited to %750,000 and home-equity loans not used to purchase or substantially improve the home are eliminated.
- Member of American Institute of Certified Public Accountants and Arizona Society of Certified Public Accountants