How to Fine-Tune Your Mid-Year Tax Strategy
As we approach the halfway point of 2019, it’s a good time to check in on your business’s tax strategy and focus efforts to get ahead on planning for next year’s tax season.
Many businesses spent the better part of 2018 working through sweeping tax reform changes resulting from the new tax law known as the Tax Cuts and Jobs Act (TCJA). Today, business owners across the country await clarity on several important tax policies that could have major implications on their tax positions moving forward.
That’s why CBIZ compiled our 2019 Business Tax Planning Supplement, which evaluates key tax changes that should be on your radar through the rest of the year and outlines tips to help minimize your 2019 tax bills.
See below for a sneak peek of the top four steps to take when analyzing your mid-year tax strategy. For more information, please download the full tax planning supplement here or contact me directly at (727) 572-1400.
1. Get up to speed on key tax reform changes. Each tenant of the TCJA comes with its own set of questions and implementation hurdles. Today, four items that continue to dominate the conversation include the qualified business income deduction, entity restructuring, interest limitation rules and accounting method changes. These ‘mechanisms in motion’ are sure to affect your business tax strategy in 2019.
2. Evaluate your international tax policy. The TCJA also brings a number of changes for international tax standards, including a one-time repatriation tax on accumulated untaxed earnings of certain foreign corporations, a base-erosion and anti-abuse (BEAT) tax and a new category of foreign income taxable in the U.S. that is known as Global Intangible Low-taxed Income (GILTI). There are also a number of significant tax deductions introduced for C corporations that can help substantially to offset these new tax costs.
3. Check in on your state and local tax requirements. The Supreme Court shined a spotlight in 2018 on state and local taxes. The landmark South Dakota v. Wayfair case allows states to impose thresholds for sales activity and requires retailers, with or without a physical presence in the state, to collect and remit sales tax if they exceeded those thresholds. Additionally, the TCJA now imposes a $10,000 cap on state and local tax deductions for individuals, which includes taxes attributed to business earnings. This means it’s more important than ever for businesses to pay close attention to their state and local tax requirements.
4. Consult an expert. The sheer number of tax changes that developed throughout 2018 and 2019 can be difficult for any business owner to navigate. Working with a dedicated tax adviser can help take the guesswork out of the strategic tax plan that is appropriate for your business. Consult your CBIZ tax professional today with any questions on tax moves your business should make now or through the remainder of the year.
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