Our Thoughts On: Tax Reform

Letter From Schneider Downs Tax Advisors

Implementation Phase of The Tax Cuts and Jobs Act and Tax Reform II Status

November 26, 2018

October 15 has come and gone and most taxpayers have filed their 2017 tax returns by this time. Possibly visions of, and planning for, the November and December holidays are at the forefront of your concerns. Your 2018 taxes may be the least of your current priorities. But … it is not too early to think about 2018 taxes. This year, in fact, it may be more imperative than ever to plan ahead. The changes brought by the Tax Cuts and Jobs Act (the “ACT”) are having both positive and negative impacts on taxpayers. Do you know the impact it will have on you?

It has been noted by us and other tax professionals that the quick enactment from initial bills to final legislation was accomplished in an unprecedented short period of time compared to the last major tax overhaul in 1986. Last year at this time, the basic framework of tax reform was under construction. A short six weeks later, the Tax Cuts and Jobs Act (TCJA) was completed. It became the most comprehensive change to federal tax law in over a generation. Some ten months after enactment, taxpayers are still waiting for guidance regarding a significant number of the new provisions of the TCJA that have significant impact on taxpayers’ 2018 federal tax liabilities.

We will continue to study the various aspects of the TCJA in more detail and will provide insight as the IRS issues additional guidance (or if previous guidance is supplemented or even changed). Compliance issues and traps have been, and will continue to be, identified—and potential planning opportunities will be introduced.

However, the fact remains that the quick turn-around from initial bill to final law resulted in less than well-structured and defined statutory language. The delay in issuing guidance by the IRS has often compounded the situation. As a result, taxpayers and advisors are still uncertain about how to interpret and apply provisions in many instances (qualified opportunity zone provisions are but one example).

Additionally, there was also talk of “Tax Reform II” earlier in the year. In fact, the Congressional House of Representatives approved three separate bills back in September that collectively make up Tax Reform II. While the House has passed the bills, they sit in the Senate awaiting further action. However, it seems unlikely that anything will be done by year-end even on the heels of President Trump’s recent comments that he would consider raising other taxes to pay for a 10% middle-class tax cut.

The retention by Republicans of a majority in the Senate will likely not be enough to approve additional Republican-initiated tax legislation. However, it is probably sufficient to prevent Democrats from repealing any part of the TCJA. While a Congress divided upon partisan lines may result in fewer tax bills being approved, any successful legislation will likely be bipartisan.

Our thoughts on the TCJA (as well as other tax topics) do not comprise an in-depth analysis of the provisions. Rather, they are intended to generate questions and discussions. We invite you to continue to review this material and to reach out to Schneider Downs as we monitor developments and explore the tax landscape for ideas that optimize your financial and tax position. Our professionals are well versed in the TCJA’s many details; and we welcome the opportunity to speak with you about the opportunities for you and your organization.

expand

Introduction to Tax Reform 2021 – The Proposed “Build Back Better” Legislation

Learn more about the Build Back Better Act and our repository or dedicated articles specific to new tax changes and legislation.

read more >

Tax Reform 2021 - Build Back Better: Excess Business Losses Further Limited than Under 2017 Tax Cut and Jobs Act

Learn more about the excess business losses being further limited under the Build Back Better proposal and changes in the current law.

read more >

Tax Reform 2021 – Build Back Better: Proposed Changes to Increase Net Investment (NII) Income Tax on S Corporation Shareholders and Limited Partners

Learn more about the proposed expansion of scope to the existing income subject to the Net Investment Income (NII) tax, originated under the Affordable Care Act.

read more >

Tax Reform 2021 – Build Back Better: Surcharge on High Income Taxpayers and its Impact on Capital Gain Rate Taxes and Planning

Learn more about the Surcharge on High-Income Taxpayers and its Impact on Capital Gain Rate Taxes and Planning and deferral strategies available.

read more >

Tax Reform 2021 – Build Back Better: Temporary Rule for S-Corporation Conversions to Partnerships

Learn more about the proposed Build Back Better Act legislation Temporary Rule for S-Corporation Conversions to Partnerships.

read more >

Proposed Legislation Targets Estate and Gift Tax Planning

Learn more about the estate and gift tax planning opportunities under the proposed Build Back Better Act legislation and what those changes entail.

read more >

Tax Reform 2021: Build Back Better Act Update as of Wednesday September 15, 2021

Learn more about the markup of the reconciliation bill proposed legislation that could bring significant tax changes as provided by the House Ways and Means Committee.

read more >

Will We See Charitable Gift Breaks Post 2021?

Better understand the discussions happening regarding charitable gift breaks post-2021 and what they might look like.

read more >

Proposed Tax Reform 2021: Proposed Increased Individual Income Taxes on High Income Taxpayers

Better understand President Biden's proposed increased individual income taxes on high income taxpayers as the Green Book explained by the Department of the Treasury.

read more >

Proposed Tax Reform 2021: Wealth Transfer Tax Proposals as Explained by the Department of the Treasury

Better understand President Biden's proposed wealth transfer tax proposals as the Green Book explained by the Department of the Treasury.

read more >
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.

×