Highlights of Tax Reform Bill
(January, 2018) TCATA CEO David Cotter participated in a webinar by the Small Business Legislative Council designed to highlight changes for businesses in the recently passed tax reform bill. While the bill is huge and complex, with many tweaks presumably to come, here are a few takeaways (contact David if you’d like more details).
The new tax bill is slanted more toward C Corporations and, for other types of business, many of the favorable provisions are set to expire in 2025, though Republicans have vowed to try to make these changes permanent.
The alternative minimum tax for corporations has been repealed, with no changes for capital gains, dividends and interest income. A major change for C Corps is that the tax rate drops to 21%.
Small businesses, defined as having $25 million or less in revenue, can now take deductions up to $1 million under Section 179. For those over $25 million, only 30% can be deducted.
Pass through businesses can now deduct 20% of domestic qualified business income, resulting in an effective top marginal rage of 29.6% on business income. The ACA, aka Obamacare, mandate remains in place for most businesses, but the individual mandate was eliminated. This will likely result in higher health insurance premiums.
There are likely many services that one can use to more deeply analyze this bill and see how it is likely to affect your business. To see the slides from the SBLC webinar, visit our members only section.