Written by webtechs

The Tax Cut and Jobs Act of 2017

Tax Cuts & Jobs Act of 2017

  • 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
Written by David Thomas

Keeping Your Business Financial Records Safe

Regardless of the size of your business, you are likely to accumulate a lot of financial records as you operate. Because you may need to refer to these documents for financial planning, collection or tax purposes in the future, it is important to keep them safe and organized.

In the past, all businesses kept their important financial documents in paper form. Although you may still choose to keep hard copies of some or all of your documents, this is no longer the best method of organization and storage. Paper documents degrade over time, and they also take up significant space in your office or warehouse. In addition, they can be destroyed easily, leaving you with no evidence of important financial transactions. For this reason, it is important to keep digital copies of all of your documents, either instead of paper documents or as a back-up for your paper documents.

If you are keeping your digital files in one location only, they may be vulnerable. A single virus or other computer failure may cause all of your files to be destroyed in just one day. To prevent this type of catastrophe from destroying your important records, it is important to keep extra digital copies in a different location, such as in a secure cloud storage site or on a remote hard drive/USB drive.

Even if you have backup copies of all of your documents on another server, it is still important to protect your financial records from viruses, hackers and other security breaches. Financial documents often contain sensitive information that could be used against you or your clients if it falls into the wrong hands. Keep your files safe by ensuring that every storage location is equipped with antivirus software, passwords and other such security measures. Test and update these security measures on a regular basis to ensure that they are as effective as possible.

Partridge and Associates CPAs have over 40 years of strategic tax planning experience for Scottsdale and Phoenix small to mid-sized businesses. Contact us today for a free tax minimization for your business at 480.990.2727 or send us a message via our contact page.