Economy and the TCJA
The year-end Federal Government economic reports were published recently and the news was promising. Despite slowdowns elsewhere in the world, turbulent financial markets, and trade disputes with China, the economy continues to grow at a healthy pace. The current economy grew more than 3% this year. The expansion is now approaching 10 years; the longest in US history. An exceptionally promising aspect has been the growth in business investment, as this is often seen as the strong groundwork for sustained growth for several more months. Business investment grew more than 6% in the final quarter of 2018.
Many business owners give the credit for the sustained economy to the Tax Cut and Jobs Act passed in late 2017. The centerpiece of this legislation was the tax relief provided to businesses. Despite the complexity of many provisions of the law, especially in the international area, as well as the slow trickle of guidance coming from the Treasury, we see the notable savings for many of our business clients. In my conversations with business owners, many are sowing their tax savings back into business reinvestment and their employees. Though many tax professionals would have preferred that the legislation come with greater care and diligence in the details, we are grateful that we can help our clients maximize the tax benefits from this legislation.