On December 22nd, President Trump signed the Tax Reform bill into law and BDO was there to help clients navigate through the impending changes. Recently, BDO Tampa Bay hosted a Planning for Tax Reform event for the Tampa business community. The event featured BDO’s local tax leaders, who gave a high level overview of the changes resulting from the tax reform bill, specifically highlighting the effect on individual taxes, taxation of partnerships and pass through entities, international tax, corporate tax planning, and accounting for income taxes (ASC-740).
From lowering the corporate and individual income rates and eliminating numerous deductions, to the elimination of AMT for corporations, the impacts of the $1.5 trillion sweeping legislation will be different for every business and every individual.
While accountants and tax departments wade through the 185-page legislation, BDO has put together the Top 10 Things Companies Need to Know about Tax Reform:
- The corporate tax rate was permanently reduced from 35 percent to 21 percent
- There’s a tax break for owners of pass-through entities
- There might be huge tax benefits to changing your company’s current choice of entity
- Tax reform means significant changes to the international tax system
- Your corporate AMT and DPAD are dead, but Research Tax Credits live on
- They’ve scrapped NOL carrybacks and limited use of carryforwards
- Tax reform’s impact on accounting methods may change when revenue is recognized, but new provisions could also lead to temporary and permanent benefits
- There are new rules for bonus depreciation and full expensing on new and used property
- The availability of cash method of accounting expanded for small businesses
- Now is the time to assess total rewards strategies
Tax reform of this magnitude is the biggest change we’ve seen in a generation, and will require intense focus to understand not only how the changes apply at a federal level, but also to navigate the ripple effect this is likely to have on state taxation as well. BDO’s tax professionals have significant experience in all areas impacted by the new tax legislation and can advise companies and individuals as they sort out what the new tax code means for them.
BDO USA, LLP (BDO) is one of the nation’s leading accounting and advisory firms. In addition to their strong and growing national footprint – through 63 offices and more than 500 independent alliance firm locations in the U.S. – BDO offers more than 1,300 offices in over 150 countries, helping clients advance their business goals across industries, throughout the country and around the world.
BDO develops thought leadership publications and events to help businesses stay abreast of emerging trends and requirements. For additional information and links to various resources and tools, visit: www.bdo.com/insights or follow along on Twitter @BDO_USA_Tax.
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This post was written by Elevate, Inc.