ally uproot the PATH Act, for current tax planning purposes, our
course of action is all but certain.
Now, looking further into the future, we could be facing a com-
pletely different scenario. If you look through the material being
passed around, you’ll see a lot of proposed tax code changes
that would impact the corporate rate, pass-through rate and
even individual rates. The validity and feasibility of these sce-
narios, however, is yet to be seen.
It’s important to remember that the legislative process moves
very slowly and there is going to be a lot of lobbying back and
forth before we get to see anything close to a final proposal.
HOLD THE PHONE
Even though the headlines are dire, I would urge you to focus
less on uprooting your company’s financial strategy based on
rhetoric and current events and more on summer fun and family
time.
While there are still topics you’ll want to talk about with your
CPA, tax reform doesn’t have to be one of them – yet. At this
time, the only time you really need to call your financial advisor
is when you are considering a transaction or other major deci-
sion that could have a significant impact on your business. A
good reason to pick up the phone would be if you were in the
market to buy a business or a piece of real estate, sell your
business, make a large equipment purchase or reconsider your
choice of entity, to name a few. These are conversations that still
need to take place regardless of what’s going on in Congress.
Your advisor will be able to help you consider how a particular
decision can impact your business and, based on that informa-
tion, whether it makes more sense to wait or forge ahead.
In the meantime, check out Rea’s website at www.reacpa.com
for tax updates and insight into timely developments. Or, if you
are in the process of considering a major transaction, give your
Rea advisor a call to find out if it makes sense and whether the
timing is right.
By Lesley Mast, CPA,
MAcc – Taxation,
principal and director of tax services,
[email protected] (Wooster office)
This is part two of a three-part series shedding light on
how the new presidential administration and its proposed
policies and reform may impact you and your business.
This Year, Let The
PATH Act Be Your Guide
Key Tax Provisions Made Permanent
By The PATH Act:
• 15-year recovery period for qualified
leasehold improvements, qualified res-
taurant buildings and improvements, and
qualified retail improvements
• E
xtension and modification of the
Research & Experimentation Tax Credit,
including allowing certain small business-
es to claim the credit against AMT liability
and employer’s payroll (i.e. FICA) liability
• 179 expensing limitations and phase out
increased to $500,000 and $2 million
respectively
• Exclusion of 100 percent of gain on
certain small business stock
• Extension of tax-free distributions from
IRAs for charitable purposes
• Earned Income Tax Credit
• Child Tax Credit
Key Provisions Extended Through 2019
• E
xtension of the New Markets Tax Credit
in which Congress authorized $3.5 billion
allocation of credits each year from 2015
until 2019
• E
xtension and expansion of the Work
Opportunity Tax Credit. Bonus deprecia-
tion is extended at 50 percent for 2015
through 2017, 40 percent for 2018, and
30 percent for 2019
Learn more about tax reform and
how businesses everywhere can
prepare for the coming changes
by listening to episode 70 of
unsuitable on Rea Radio at
www.reacpa.com/episode-70.
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