THE business tax provisions of the Tax Cut and Jobs Act include:
• The new Tax Cuts and Jobs Act cuts corporate taxes from eight graduated rates of 15 percent to 35 percent to a flat rate of 21 percent.
• Introduces a 20 percent deduction for pass-through entities.
• Uses a new territorial system of taxation instead of the current tax on worldwide income of multinational corporations.
• Requires companies to pay a one-time, low tax rate on their existing overseas profits at 15.5 percent on cash assets and 8 percent on non-cash assets.
• Preserves the current tax treatment of nonqualified deferred compensation.
• Expands the number of taxpayers who may use the cash method of accounting.
• Retains the business interest expense deduction for small businesses.
• Simplifies the inventory rules for small businesses.
• Expands the exception for small businesses from the uniform capitalization rules.
• Removes computer or peripheral equipment from the definition of listed property.
• Provides consideration of an inflation index.
• Allows nonresident aliens as qualifying beneficiaries of an electing small business trust.
• Repeals the technical terminations rule for partnerships.
• Prohibits businesses from writing off sexual harassment settlements.
• Limits executive pay at nonprofits with a new levy of 21 percent excise tax on salaries above $1 million.
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.
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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies. He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at firstname.lastname@example.org.