The Tax Cuts and Jobs Act: How Will the New Law Impact You?

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The Tax Cuts and Jobs Act brought about some significant changes to the tax code. Let’s talk about how those changes will impact you personally and your business. For the agriculture industry, the new laws may change the way you make decisions about your business.

Most of the impact to individuals will go into effect on your 2018 tax return and will last until your 2025 return. Most of the business laws are permanent. Below are some of the key items that may impact your personal returns and your business. Each of these items should be evaluated based on your specific situation.

Unfortunately, there is no one answer that will work for everyone. We are here to navigate and help you make more informed tax decisions.

  • Capital Investments → When should you purchase equipment? Bonus depreciation and Section 179 rules have changed. Timing is everything!
  • Domestic Production Activities Deduction (DPAD) →  Repealed.
  • NEW 20% DEDUCTION  There is a new deduction for sole proprietors, partnerships, LLCs, and S-Corporations. Are you eligible? How can we maximize your deduction?
  • C-Corporations  Should you consider an S election? How will the new flat rate of 21% impact your taxes?
  • Like-Kind Exchanges  Only available for real property!
  • Meals and Entertainment  Entertainment expenses are no longer deductible! Some food expenses that were previously 100% deductible are now subject to 50% limitation or nondeductible. Starting in 2025, meals will be nondeductible!!
  • Lower Tax Brackets  Where will you fall in the new tax brackets? We have new targets for which to strive. Planning is a good tool to help you monitor which bracket you’re in and what you can do to fall into a lower bracket.
  • Exemptions/Standard Deductions   Those $4000 exemptions you’ve been receiving for yourself, your spouse and your children no longer exist! However, your standard deduction has doubled.
  • Child Tax Credit  Will your dependents qualify for the $2000 dollar for dollar reduction of tax?
  • Medical Expenses  Do you expect to incur large medical expenses in the near future?
  • Home Equity Loans/Mortgage Expense Deductions  Interest expenses may be limited or nondeductible under the new law.
  • Unreimbursed Employee Expenses  These costs are no longer deductible on the employee’s return!
  • Affordable Care Act  What changes are coming?
  • Alimony  Make sure your attorney knows the tax law or you may find yourself with a large tax bill.
  • Education Saving  You can now use 529 plans in new ways!
  • Net Operating Losses  Let us help you plan for the future so you don’t lose this valuable deduction!

Schedule an early tax planning meeting with the Agrisolutions Tax department so that we help you make changes for tax year 2018 while there is still time!

Disclaimer – Descriptions provided in this article are presented as generalities. There are many factors not listed above which may impact your business. This article should not be considered legal or tax advice. For advice on a specific transaction, please contact the AgriSolutions Tax Department at taxes@agrisolutions.com.

Written By

Mary-Karen Wittman

Mary-Karen Wittman

Senior Tax Manager

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