Tax reform is a hot topic in the United States right now, and it’s important for businesses to understand what it means for them. The Tax Cuts and Jobs Act of 2017, which was signed into law in December 2017, is the most sweeping tax reform legislation in decades. It makes significant changes to the tax code, including reducing the corporate tax rate from 35% to 21%, eliminating the corporate alternative minimum tax, and allowing businesses to immediately write off the full cost of certain investments.
For businesses, the most significant change is the reduction in the corporate tax rate. This means that businesses will pay less in taxes, which can help them save money and reinvest in their businesses. Additionally, the new law allows businesses to immediately write off the full cost of certain investments, such as equipment and machinery, which can help businesses save money on taxes and reinvest in their businesses.
The new law also eliminates the corporate alternative minimum tax, which was a tax that businesses had to pay if their regular tax liability was too low. This means that businesses will no longer have to pay this additional tax, which can help them save money.
Finally, the new law also includes provisions that allow businesses to deduct certain expenses, such as business meals and entertainment, from their taxes. This can help businesses save money on taxes and reinvest in their businesses.
Overall, the new tax reform law is a positive development for businesses. It reduces the corporate tax rate, eliminates the corporate alternative minimum tax, and allows businesses to deduct certain expenses from their taxes. This can help businesses save money on taxes and reinvest in their businesses, which can help them grow and create jobs.