[RickFLM4]

I am a CPA, but not a tax CPA. Any tax CPAs here who may be able to impart some wisdom about how expected rule changes to pass-through entities may benefit small business owners? I suspect there are more than a few on the forum. (I understand lawyers and accountants don't seem to have an opportunity to participate in this but expect there are mostly other types of small business owners here.). Not surprisingly, there seems to be numerous sources of conflicting information in the press.

If possible, let's try to make this productive / informative for small business owners, not a political soapbox for either side.

[gatorfast]

CPA here as well. But not a tax CPA either even though that's what everyone assumes you do when you say you are a CPA. So yea I got nothing for you other than general observations of the proposed tax plan likely causing me to pay more taxes.

[geogerf]

Here's a summary of the conference report:
https://taxfoundation.org/conference...-and-jobs-act/

Looks like the corp tax rate was raised just a bit to 21% (from the proposed 20%). Less money collected compared with the current 35% rate, so not helping our national debt, but we're told this is supposed to spur the economy and we wouldn't see the effects for 10 years (Keynesian economics).

btw: not a tax cpa, but i work in the industry.

[Lups]

Omg cpa?

We probably don't have any tax lawyers here since those boys are rich.

As far as i have understood, this bill is solid for everyone with no kids, or elderly parents and with the pte everyone middle class should prepare for a step lower.

[stevenc]

Im a CPA but not a tax CPA. However i have been reviewing this to see how it will affect my clients.

Basically allows 20% deduction of your flow through income limited to 50% of your wage income. This encourages owners to take wages over distributions so they pay social security and medicare.

After the 20% deduction, income is taxed at the owners personal tax rates.

They also phase out over $100k.

Basically this only helps small businesses. Any business making decent money wont see any real benefit. Also most services businesses are excluded from the new rules.

[geogerf]

The bill looks to be great for real estate (what's Mr. President's background again?). I can't complain though, RE is my thing.

[Maynard]

I hear that the best tax advice is to suddenly come into a few million dollars, then you get the really nice breaks. And whatever you do, don't work (like, for wages, with withholding), or live in a blue state.

[Maestro]

Originally Posted by stevenc

Im a CPA but not a tax CPA. However i have been reviewing this to see how it will affect my clients.

Basically allows 20% deduction of your flow through income limited to 50% of your wage income. This encourages owners to take wages over distributions so they pay social security and medicare.

After the 20% deduction, income is taxed at the owners personal tax rates.

They also phase out over $100k.

Basically this only helps small businesses. Any business making decent money wont see any real benefit. Also most services businesses are excluded from the new rules.

Yep , my friend who ran his own business had it set up so he and his partner were sole stock holders, they both work for the company as employees, they both got paid $30K per year which is what they paid income and Social Security taxes on and at the end of the year the company would pay out all the balance of income as a dividend which they only paid capital gains on. Keep in mind someone who works for themselves pay 14% social security since they pay both halves of the tax. His overall tax rate was far less not having to pay 14% on $100k of incoming.

The new tax law is moving closer to a flat tax, and limited deductions. I know I will end up paying more since I itemize, and take the full benefit of all the deductions. In the new plan I will be capped. But it is no different than what the previous admin did, they phase out child credit and increase medical deduction from 7% of income to 11%.

I personally rather pay a flat tax and be done with it than spend all the time doing taxes.

If you have stock with dividend it is a mess today, especially if you held it for a long time, Today you have to account for each dividend re-investment transaction and calculated the capital gain and lost on each transactions they no longer allow a single cost basis to calculate the gains or loss. I had investment which I held for 10+ years which paid out monthly dividend which were re-invested, I had to record 120 separate transactions all be cause of the stupid rules the last administration put in. I hope they simplify this again.

[geogerf]

Looks like we are going to have a new tax code. Merry Christmas to all