President Trump is now celebrating in Florida after signing the bill for the Tax Cuts and Jobs Act. The Tax Cuts and Jobs Act, which is now officially known as “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” cuts business taxes from 35% to 21% and cuts several personal tax rates, though personal tax cuts are currently temporary. The law also adds a 20% deduction of income for businesses structured as tax flow-through entities, which is a common structure among small businesses.
The bill is estimated to reduce federal taxes, and thus federal income, by up to $1.5 trillion over the next decade.
Given the multitude of tax law changes, business owners are encouraged to consult their tax advisors on how the changes will impact them in 2018, and whether any strategic steps should be taken before year-end 2017 to optimize tax planning.