The Atlanta Lawyer April 2018 - Page 20

ness interest to 30 percent of the business’s adjusted taxable income with carryforward of disallowed amount (disallowance not appli- cable to businesses with less than $25 million in annual gross re- ceipts); and • Individual Income and Property Taxes – Limitation on itemized deductions for income and prop- erty taxes to $10,000 ($5,000 for married filing separately). Responding to the Act What, if anything, should law firms do in response to these changes? Law firms should immediately take the following actions: • Capital Expenditures – Reevalu- ate mid- and long-term plans for expansion or relocation to maxi- mize benefit from expensing be- fore January 1, 2023; • Entertainment, Meals, and Trans- portation – Begin tracking expen- ditures for non-deductible enter- tainment expenses and employee meals and transportation fringe benefit expenses, and evaluate the need for expenditure and/or reimbursement policy changes; • Family and Medical Leave – Con- sider adopting or changing an ex- isting employer-paid family and medical leave plan to qualify for the new credits; and • Interest Expense – If the firm projects $25 million or more in gross receipts, calculate the net business interest expense to see if the 30 percent limit will apply and, if so, consider refinancing or changes to partner compensation in order to avoid to limit. Law firms and their owners should also begin planning structural changes pending the issuance of definitive guidance from the IRS or technical corrections from Con- gress on those provisions in the 14 TH ANNUAL SPRINGPOSIUM INTELLECTUAL PROPERTY CLE CONFERENCE APRIL 27-28, 2018, AT LANIER ISLANDS 8 CLE including 1 Ethics, 1 Professionalism, 1 Trial Practice Register online at www.AtlantaBar.org (complimentary registration for in-house counsel) The 14th Annual Intellectual Property SpringPosium ® is proudly presented by: 20 April 2018 Intellectual Property Section