It’s never too early to begin tax planning. With continuous updates through the year, this handy reference can help you evaluate your options and strategies when it comes to requirements and opportunities to mitigate your tax liability. Staying actively involved could also help you preserve and create longer-term wealth for you and your family.
To learn more about these changes and how they affect you or your business, visit our dedicated tax reform page for a comprehensive list of topics and industry insights, or contact your Moss Adams professional.
Companies that relied on Staff Accounting Bulletin 118 will need to complete and disclose the results of their provisional estimates within the 12-month measurement period that began in December 2017.
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Tax reform made substantial changes to the way businesses now must manage their expenses, requiring additional scrutiny, increased data management, and extra review of contract details.
With the new, significantly lower C corporation tax rate of 21% and ability to deduct state income taxes in full, many business owners are exploring whether to convert their companies to C Corporations. However, this strategy isn’t right for everyone.
While there aren’t any specific tax-related changes when it comes to exit planning, there are still several strategies to consider when planning for the future of your company. These include:
Tax reform introduced sweeping changes to how the United States taxes international business while preserving many of the concepts that previously existed. With new GILTI provisions and a new tax on offshore earnings, there are several considerations for taxpayers making cross-border transactions and investments.
Companies that incur qualified R&D costs are eligible for a R&D tax credit, which could potentially save them thousands of dollars in annual state and federal taxes.
The R&D credit is based on four criteria:
Companies that don’t perform an R&D tax credit study risk improperly calculating the credit and lacking sufficient documentation in the case of an IRS audit. The ASC 730 Safe Harbor Directive offers an opportunity to reduce this risk.
ASC 606, Revenue from Contracts with Customers, represents a monumental change to how companies recognize revenue. The tax implications of a company’s adoption of ASC 606 for financial reporting purposes are varied and complex—in some cases, creating new book tax differences and additional data maintenance requirements. Compounding the tax impacts are changes to the tax rules under Internal Revenue Code (IRC) Section 451 for revenue recognition.
Following the US Supreme Court’s decision in South Dakota vs. Wayfair on June 21, 2018, many states have enacted economic nexus laws. These laws require remote sellers to collect sales tax into their respective states, similar to laws enacted in South Dakota.
Taxpayers could choose to claim either the standard deduction or to itemize their deductions. The standard deduction is a fixed number determined by a taxpayer’s filing status and is annually adjusted for inflation.
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While some taxpayers may use the standard deduction, careful planning is important for taxpayers who itemize deductions to help identify current and future tax-saving strategies.
The alternative minimum tax (AMT) is an additional tax to which taxpayers may be subject. The calculation of AMT prevents overutilization of tax breaks, by disallowing certain deductions and requiring additional income recognition.
The combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption have created a considerable number of estate planning opportunities and more flexibility with your plan, including the following:
The federal tax reform limitation on the state and local taxes paid deduction has prompted more aggressive tax planning in states with higher taxes. Many taxpayers are looking for ways to decrease their tax liability, but there are some important things to consider when planning an individual residency or sponsored transition.
There are different trust income taxes depending on where the trust is deemed to be located—also known as the trust situs. This could also affect the potential trust taxation for beneficiaries.
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Capital gains haven’t changed much since 2017, so many planning opportunities remain the same.