Follow Adam Linkedin Twitter Facebook
Email Adam Email
Financial
Aug 1, 2017

2017 Tax Changes: The Million Dollar Question

Sponsored Content provided by Adam Shay - Managing Partner, Adam Shay CPA, PLLC

Did you realize the U.S. income tax code has not had a major overhaul since 1986? 

Now that the Affordable Care Act reform effort appears to be behind us, Washington has indicated an area of focus on tax reform.

What will it look like? That is tough to say. 

I’ll do my best to summarize various items that have been discussed.  Keep in mind that you should only make tax planning moves and implement tax strategies around the current tax code, not guess the future. 

Some of the proposals include:

  • A border tax on imports into the United States. This was a high priority item early on, but latest releases and pushes have indicated this will most likely fall by the way side.
  • Business Income Tax Rate Cuts. There have been proposals to lower business tax rates on C corporations and flow through entity income (K1s for S corporations and partnerships) to have their income taxed at 15 percent. This could be a significant tax savings, as the top tax rates currently are around 39 percent.  If the flow-through rate becomes the case, you’re going to see even more of a reason not to be taxed as a sole proprietor. If this change goes through, then in some circumstances it could make sense for people to shift from being an employer to self-employed.
  • Individual Income Tax Rate Cuts. In general, they would like to lower income tax rates across the board. Interestingly enough, President Trump recently indicated he might not be so willing to do so with the highest income levels.
  • Simplify the Tax Code. There have been discussions of simplifying (i.e. eliminating) deductions and credits. Some proposals are to raise the standard deduction and to potentially do away with the mortgage interest deductions and/or charitable contribution deductions.  You can imagine the forces and dollars at stake that will be fighting some of those changes.
  • Immediately Be Able to Expense Capital Assets.  Proposals have been made to allow companies to immediately expense capital asset purchases, such as large machinery, equipment and vehicles. The flip side of this is they may do away with the business interest deduction.

There will be some challenges related to implementing tax changes. As you know, there have been challenges in Washington of arriving to consensus. Will all the necessary parties get on the same page? 

In addition, the tax proposals - along with the proposed budget - will most likely need to be revenue neutral. Technically a budget doesn’t have to be, but it is a much more difficult process if it is not, and would stray from core principals of not increasing the deficits.

My goal today was to update you on potential tax law changes. If you have any questions, concerns or feedback, please feel free to reach out to me.

Adam Shay, CPA (N.C. License Number 35961), MBA, is managing partner of Adam Shay CPA, PLLC. He focuses on minimizing taxes and improving the financial results of entrepreneurs, and is actively involved in supporting the Wilmington entrepreneurial and startup community. For more information, visit http://www.wilmingtontaxesandaccounting.com/ or email him at [email protected]. He can also be reached by phone at (910) 256-3456.

 

Other Posts from Adam Shay

Adam shay blk 52015121549
Ico insights

INSIGHTS

SPONSORS' CONTENT
Hardy revised

Transforming the CHHS of Today to the CHHS of Tomorrow

Charles Hardy - UNCW College of Health and Human Services
Aaeaaqaaaaaaaaidaaaajdhiztrkodm0lte2yjetngrkmy1hotrmltawmdvlmwqyztmymw

Growing the Spirit of Entrepreneurship

Diane Durance - UNCW Center for Innovation and Entrepreneurship
Lyleheadshot2017 1251720228

2019 VolunTourist Season is Wrapping Up!

JC Lyle - Wilmington Area Rebuilding Ministry

Trending News

Realtor Submits Site Plans For Luxury Condos, Executive Office Center

Cece Nunn - Aug 22, 2019

Firm's Expansion Expected To Lead To New CRO Jobs In Wilmington

Cece Nunn - Aug 22, 2019

Pawsome News: New Pet Daycare And Retailers Opening In Wilmington

Johanna Cano - Aug 20, 2019

Public Forums Draw Questions About NHRMC's Future

Vicky Janowski - Aug 20, 2019

SummerFest 19 To Include Street Food Cook-off At Battleship Park

Jessica Maurer - Aug 21, 2019

In The Current Issue

Battleship Opens New Tour Section With Food Focus

An area landmark has a new tool for providing insight into the daily lives of the men who served aboard the World War II vessel....


Thinking Smaller For New Subdivisions

Some homebuilders and developers in the Wilmington area are working on creating smaller subdivisions and infill communities....


Advocating For Realtors

Anne Gardner, the new CEO of Cape Fear Realtors, talks about her role leading one of the region's largest trade associations....

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

WILMA's Leadership Accelerator
Power Breakfast - The H Word (June 13, 2019)
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`