The Importance of a Tax Planning Adviser

by Karen Stern

The start of a new year means tax planning. Whether you are preparing to file 2018 taxes, creating a business plan, or strategizing how to make gifts and manage investments, a tax adviser can help you maximize your tax benefits under the Tax Cuts and Jobs Act.

Your tax adviser can help you navigate the new tax law by creating a customized tax strategy that fits your situation. Below is a small sample of recent tax changes. Consider talking with your adviser about how these changes could impact you.

- C corporations, including personal service corporations, are now taxed at a flat rate of 21%.
- Individual income tax rates have decreased by 2% to 3% at almost all income levels.
-The individual state and local tax deduction is limited to $10,000, and miscellaneous itemized deductions are eliminated.
- Pass-through entities and individuals with Schedule C or F income on their individual tax return may benefit from a 20% deduction of their qualifying business income.
- The domestic production activities deduction has been eliminated.
- Business interest expense is now limited to 30% of adjusted taxable income.
- Net operating losses (NOLs) are now limited to 80% of taxable income and cannot be carried back but can be carried forward indefinitely.
- There is a 100% bonus depreciation on qualifying business assets until Dec. 31, 2022.
- Section 179 limits were raised. The maximum allowable expense increased to $1 million but starts being phased out when asset purchases exceed $2.5 million.
- Entertainment is no longer a deductible business expense.

Learn more about how recent tax reform could impact your tax planning. Contact your financial adviser or Karen Stern, partner in charge of the Brown Smith Wallace Entrepreneurial Services Group, at kstern@bswllc.com.

Karen Stern, CPA, (kstern@bswllc.com), partner in charge, Brown Smith Wallace Entrepreneurial Services Group, provides tax and accounting services for companies ranging from start-ups to $20 million in revenue.