Hardwood Floors February/March 2019

BUSINESS BEST PRACTICES FINANCE

The Impact of Recent Federal Tax Code Changes on Your Business By Mary Jane Pieroni & Stephen J. Lenivy

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Due to the complexities of the tax law changes, the following are only summaries of these provisions. Please consult your tax adviser for guidance on applying these reforms to your business. MARGINAL TAX RATES The marginal tax rate is the rate applied to your next dollar of income or deduction. The maximummarginal federal tax rate has been reduced to 21 percent for C Corporations from the previous maximummarginal rate of 35 percent. Fiscal year tax filers may be eligible for a blended rate for the 2017 tax year. Businesses of all sizes, across all industries, have been impacted by the monumental changes to the federal tax code. Tax planning should consider all possibilities to lower your total tax liability effectively.

Four of the most impactful measures from tax reform affecting businesses:

Permanent reduction of the corporate tax rate

1

Expanded availability of cash method accounting for small businesses

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Limitation of interest expense deductibility

3

CASH VERSUS ACCRUAL METHOD OF ACCOUNTING

Tax reform expands the number of taxpayers eligible to use the overall cash method to calculate taxable income. Under the new law, C Corporations (except for farming businesses and certain qualified personal service corporations) and partnerships that have a C Corporation as a partner may use the cash method of

Expansion of bonus depreciation

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