Running your own business takes a lot of time, effort, and dedication. Part of the process of running a successful organization is to stay up to date on your taxes. The IRS has recently highlighted the Tax Cuts and Jobs Act, passed in December 2017, with one central message in mind: if you own a company, plan now for new tax reforms.
Here’s what you should know:
If the law was passed in 2017, why is the IRS choosing to issue a reminder now? The answer is simple: These adjustments go into effect for fiscal year 2018, and cover a number of topics ranging from deductions to international business and accounting method changes. The new law will have an impact on tax rates, as well as quarterly estimated tax payments, and the IRS wants to make sure that businesses are prepared for the changes with plenty of lead time. Catching taxpayers off guard isn’t something they take lightly, and this reminder is likely one of many to come before the FY 2018 tax filing season is underway. In coordination with this announcement, officials have also released numerous press releases, tax tips, and YouTube videos to help small businesses understand and adhere to the new tax law.
What Do The Changes Encompass?
The biggest note for “passthrough businesses,” as the IRS calls them, is the law change surrounding business income deductions. Many organizations can now take advantage of a new 20-percent qualified business income deduction when filing their taxes. Other deductions include revised depreciation methods and expanded options for business property expensing. In addition, owners can expect to see changes in fringe benefits, like-kind exchanges, and business credits for organizations who provide paid family and medical leave. To learn more about the specific adjustments that the Tax Cuts and Jobs Act entails, the IRS is encouraging citizens to visit the Tax Reform Resources page on their website. They also provide a “Tax Tips” email subscription program, for those interested.
If you want a clearer understanding of the Tax Cuts and Jobs Act, and its effect on your business, speak with a team member, and we’ll guide you through the process. For more information on other accounting topics, check out our blog.