Monday, December 11, 2017

Overview of Proposed Tax Reform

By now most have heard about some of the proposed tax changes coming out of Washington, D.C.  There are some differences between what the House is proposing vs. the Senate and The Associated General Contractors of America have prepared a nice table showing those differences.  The chances are very good at this point that we will see reform for 2018, a little over 30 years after we saw the last major overhaul.

The changes will be widespread, affecting corporations and individuals alike.  Of special note for the construction industry are the following:

  • ·         Repeal of the Domestic Production Activities Deduction (DPAD)
  • ·         Small Contractor Exemption Increase from $10MM to either $15MM or $25MM

Also, Cash Accounting will be available up to either $15MM or $25MM in gross receipts (currently $10MM for Pass-Throughs and $5MM for C-Corps), including inventories.  Both the House and Senate have provisions for full expensing of new equipment (the House includes used equipment here as well) for 5 years.

There is a lot of change on the horizon, much of it should bode well for businesses and the economy.  Should you wish to discuss any of these provisions further, their possible impact and what actions might be advantageous as we head into 2018 please feel free to contact me.  Given some or most of these changes will be occurring, there are measures to take to position your business for the maximum benefits.  For a more detailed overview of the proposals in the House and Senate, see below.  

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