Anytime there are huge pieces of legislation, you can expect a 'technical corrections act' to come back and fix things.
The IRS will have its hands full just deciding which provisions require new regulations first. They will need to get guidance out to practitioners, such as Accountability Services, as well as businesses very soon.
We expect them to issue some guidance in the form of Q&As rather than full-blown regs, at least at the beginning. The transition provisions and effective dates will add tremendous complexity.
Frankly, our firm doesn't expect to have granular clarity until late spring, in many cases, after many of our clients' 2017 tax returns have been filed.
That being said, below is a revised checklist of things we suggest clients do by year-end.
- Push business income to 2018 (rates go down in 2018, plus deduction).
- Buy and place in service an electric car (tax credit expires at end of 2017).
- Recognize any possible business losses (they will be limited in 2018).
- Prepay investment expenses and tax prep fees in 2017 (nondeductible in 2018).
- Pay any moving expenses related to a job in 2017 (the deduction is eliminated in 2018).
- Sell any business processes or patents before the end of the year (this will be treated as ordinary income in 2018, and is capital gains in 2017).
- Wait to buy a business vehicle until 2018 (depreciation on luxury autos goes up substantially in 2018).
- Prepay 2017 state income taxes.
- Accelerate any of your children’s unearned income into 2017 (rates go up in 2018).
The decisions you make regarding your taxes impact your cash flow and bottom line - and the new tax laws are complicated.
If you need tax consulting services over and above tax preparation, contact us to set your consultation appointment now and we'll get you on our calendar for late spring.