• COVID-19
  • Insights
  • Who We Help
    •   Industrial Automation
    •   Manufacturing & Distribution
    •   A&E Professional Services
    •   International Businesses
      • ◦   Expanding Outside the U.S.
      • ◦   Expanding to the U.S.
  • Services
    •   COVID-19
      • ◦   Cash Flow Confidence Assessment
      • ◦   Maximize Your Loan Forgiveness
      • ◦   5 Key Focus Areas
      • ◦   COVID-19 Resource Center
    •   Client Accounting
      • ◦   Software Solutions
      • ◦   Accounting Support
      • ◦   Reporting
    •   Tax
      • ◦   R&D Tax Credit
      • ◦   Tax Credits & Incentives
      • ◦   Tax Structure
      • ◦   Federal Tax
      • ◦   State & Local Tax
      • ◦   Personal Tax
      • ◦   Other Tax Filings
    •   Advisory & Assurance
      • ◦   Assurance Levels
      • ◦   Reporting
      • ◦   Employee Benefit Plan Audits
      • ◦   Technical Accounting & Reporting
    •   Consulting
      • ◦   Data Analytics
      • ◦   Transaction Services
      • ◦   Business Planning
      • ◦   Succession & Exit Strategies
    •   International
      • ◦   International Tax
      • ◦   Foreign Direct Investment
      • ◦   Global Expansion
      • ◦   International Accounting
  • Events
  • Careers
    •   Why C&M
    •   Students
      • ◦   Campus Events
      • ◦   Internships
      • ◦   Reach Beyond Program
    •   Experienced Professionals
      • ◦   Team member profile videos
    •   Opportunities
    •   Employee Journals
    •   Office Tour
  • About Us
    •   How We Help
      • ◦   Service Approach
      • ◦   Affiliations
      • ◦   Communications & Technology
    •   Meet Our Team
    •   Testimonials
    •   Our Videos
    •   Our Story
  • Contact Us
  • Subscribe
CHANGE COUNTRY:
  • United States
  • 中国
  • Client Login
Clayton & McKervey Logo
  • COVID-19
  • Insights
  • Who We Help
  • Services
  • Events
  • Careers
  • About Us
  • Contact Us
  • Subscribe
    • Most Recent Insights
  1. Home
  2. Insights
  3. Planning for Year-End in the Midst of Tax Changes

Planning for Year-End in the Midst of Tax Changes

Posted by Margaret Amsden on November 15, 2017

Margaret Amsden Margaret Amsden

As I am sure you are aware, the House and Senate are working feverishly to enact major tax reform. The proposals have been characterized as the most sweeping tax law changes since the enactment of the 1986 Tax Law that first introduced the concepts of Passive Activity Losses and the Alternative Minimum Tax. The questions are:

  • What will this law look like when it is completed?
  • Who will be affected?
  • How do I plan for year-end?

As background, The House of Representatives put forth the Tax Cuts and Jobs Act (H.R. 1) on November 2. Shortly afterward, on November 9, they released the updated version of the Act as approved by the Ways and Means Committee. Also released on November 9 was the Senate plan, as issued by the Joint Committee on Taxation, which as recently as November 14 is still in the process of negotiation, amendment and discussion in the Senate Finance Committee.

In addition to the fact that the House and Senate began with significant differences in their proposals, this is a process resulting in very significant and impactful changes on almost a daily basis. For example, it was just on the 14th that the Senate amended its plan to eliminate the Affordable Care Act’s Individual Mandate, and provided that the individual tax provisions in the bill would sunset at the end of 10 years, while the corporate provisions would remain as permanent amendments to the law. Neither of these provisions are part of the House proposed bill.

Now, to get back to the most critical of the initial question of how to plan for year-end, the answer, while not revolutionary, is fairly easy to implement:

  • Tax rates are going down in both plans, so generally your goal would be to defer income and accelerate deductions.
  • Fixed assets currently have fairly generous expensing and depreciation methods, which are set to become more generous in the future. As such, you need to weigh the benefit of a deduction today against higher rates against the quicker write off in the future against lower rates. Generally, the deduction today is likely to win out.
  • State and local tax (SALT) deductions are set to be eliminated, at least for individuals, under both plans. As a result, consider accelerating the payment of these, but beware of the fact that this could cause individuals to be subject to the Alternative Minimum Tax (AMT).

As for the more long term questions: What will this law look like when it is completed and who will be affected, the answer, unfortunately is we don’t know. What we can promise is that as soon as we do, we will let you know.

If you have specific questions, or would like to discuss your year-end planning please feel free to contact Clayton & McKervey.

Our team is always ready to help.

Please contact us for more information.

Margaret Amsden

Margaret Amsden

Shareholder, Private Client Services

Contact Margaret   |   Read Margaret's bio

related news

How to Calculate R&D Tax Credits

As we’ve seen in the first two installments of this series, business owners often miss out on the R&D tax credit opportunity and the bottom-line infusion it can provide. Many…

Read full story

Doing Business in Mexico: What to Expect this Year

Without a doubt, this year will be interesting for Mexico. To start, it’s an election year and we all know what that means…a lot of uncertainty. As the global pandemic…

Read full story

What Expenses Qualify for R&D Tax Credits?

The R&D tax credit is one of the most overlooked opportunities to boost your bottom line. Many business owners fail to claim it under the mistaken belief that they’re not…

Read full story

Clayton & McKervey Launches The Sound of Automation Podcast

Media Contact: Denise Asker, dasker@claytonmckervey.com; 248.936.9488 Southfield, Mich.—February 17, 2021—Clayton & McKervey, a certified public accounting and business advisory firm helping growth-driven companies compete in the global marketplace, is excited…

Read full story

Misconceptions About the Research & Experimentation Tax Credit

As companies put more emphasis on Industry 4.0 and business processes become more automated and accessible, the opportunities for Research & Experimentation tax credits increase. The Research and Experimentation (R&E)…

Read full story

Categories

Jump directly to the topics that matter to you most.

  • A&E Professional Services
  • About Us
  • Advisory & Assurance
  • Business Owners
  • C&M Press Releases
  • Careers
  • China Consulting
  • Clayton & McKervey
  • Client Accounting Services
  • Consulting
  • COVID-19
  • Data Analytics
  • Estate Planning
  • Expanding Outside the U.S.
  • Expanding to the U.S.
  • From the President
  • Industrial Automation
  • International
  • Manufacturing & Distribution
  • Mexico Consulting
  • Podcasts
  • Private Client Services
  • Tax & Tax Credits
  • Transaction Services
  • Videos

Authors

Read news direct from our managers and stakeholders.

    • Ben Smith
    • Beth Butchart
    • Bryan Powrozek
    • Carlos Calderon
    • Casey Haggerty
    • Clayton & McKervey
    • Dave Van Damme
    • Denise Asker
    • Eric Lin
    • Jim Biehl
    • Julie Killian
    • Kevin Johns
    • Margaret Amsden
    • Miroslav Georgiev
    • Nina Wang
    • Rob Dutkiewicz
    • Ruben Ramirez
    • Sarah Russell
    • Sue Tuson
    • Tarah Ablett
    • Teresa Gordon
    • Tim Finerty
    • Tim Hilligoss
    • Wendy Reedy

Additional Resources

Additional news from Clayton & McKervey can be found below.

  • Subscribe to our email newsletter
  • View upcoming events
  • Contact us to let us know how we can help you
  • Main Content
  • Related Insights

Planning for Year-End in the Midst of Tax Changes

Posted by Margaret Amsden on November 15, 2017

Margaret Amsden

As I am sure you are aware, the House and Senate are working feverishly to enact major tax reform. The proposals have been characterized as the most sweeping tax law changes since the enactment of the 1986 Tax Law that first introduced the concepts of Passive Activity Losses and the Alternative Minimum Tax. The questions are:

  • What will this law look like when it is completed?
  • Who will be affected?
  • How do I plan for year-end?

As background, The House of Representatives put forth the Tax Cuts and Jobs Act (H.R. 1) on November 2. Shortly afterward, on November 9, they released the updated version of the Act as approved by the Ways and Means Committee. Also released on November 9 was the Senate plan, as issued by the Joint Committee on Taxation, which as recently as November 14 is still in the process of negotiation, amendment and discussion in the Senate Finance Committee.

In addition to the fact that the House and Senate began with significant differences in their proposals, this is a process resulting in very significant and impactful changes on almost a daily basis. For example, it was just on the 14th that the Senate amended its plan to eliminate the Affordable Care Act’s Individual Mandate, and provided that the individual tax provisions in the bill would sunset at the end of 10 years, while the corporate provisions would remain as permanent amendments to the law. Neither of these provisions are part of the House proposed bill.

Now, to get back to the most critical of the initial question of how to plan for year-end, the answer, while not revolutionary, is fairly easy to implement:

  • Tax rates are going down in both plans, so generally your goal would be to defer income and accelerate deductions.
  • Fixed assets currently have fairly generous expensing and depreciation methods, which are set to become more generous in the future. As such, you need to weigh the benefit of a deduction today against higher rates against the quicker write off in the future against lower rates. Generally, the deduction today is likely to win out.
  • State and local tax (SALT) deductions are set to be eliminated, at least for individuals, under both plans. As a result, consider accelerating the payment of these, but beware of the fact that this could cause individuals to be subject to the Alternative Minimum Tax (AMT).

As for the more long term questions: What will this law look like when it is completed and who will be affected, the answer, unfortunately is we don’t know. What we can promise is that as soon as we do, we will let you know.

If you have specific questions, or would like to discuss your year-end planning please feel free to contact Clayton & McKervey.

Our team is always ready to help.

Please contact us for more information.

Margaret Amsden

Shareholder, Private Client Services

Contact Margaret   |   Read Margaret's bio

related news

How to Calculate R&D Tax Credits

As we’ve seen in the first two installments of this series, business owners often miss out on the R&D tax credit opportunity and the bottom-line infusion it can provide. Many…

Read full story

Doing Business in Mexico: What to Expect this Year

Without a doubt, this year will be interesting for Mexico. To start, it’s an election year and we all know what that means…a lot of uncertainty. As the global pandemic…

Read full story

What Expenses Qualify for R&D Tax Credits?

The R&D tax credit is one of the most overlooked opportunities to boost your bottom line. Many business owners fail to claim it under the mistaken belief that they’re not…

Read full story

Clayton & McKervey Launches The Sound of Automation Podcast

Media Contact: Denise Asker, dasker@claytonmckervey.com; 248.936.9488 Southfield, Mich.—February 17, 2021—Clayton & McKervey, a certified public accounting and business advisory firm helping growth-driven companies compete in the global marketplace, is excited…

Read full story

Misconceptions About the Research & Experimentation Tax Credit

As companies put more emphasis on Industry 4.0 and business processes become more automated and accessible, the opportunities for Research & Experimentation tax credits increase. The Research and Experimentation (R&E)…

Read full story

Categories

Jump directly to the topics that matter to you most.

  • A&E Professional Services
  • About Us
  • Advisory & Assurance
  • Business Owners
  • C&M Press Releases
  • Careers
  • China Consulting
  • Clayton & McKervey
  • Client Accounting Services
  • Consulting
  • COVID-19
  • Data Analytics
  • Estate Planning
  • Expanding Outside the U.S.
  • Expanding to the U.S.
  • From the President
  • Industrial Automation
  • International
  • Manufacturing & Distribution
  • Mexico Consulting
  • Podcasts
  • Private Client Services
  • Tax & Tax Credits
  • Transaction Services
  • Videos

Authors

Read news direct from our managers and stakeholders.

  • Ben Smith
  • Beth Butchart
  • Bryan Powrozek
  • Carlos Calderon
  • Casey Haggerty
  • Clayton & McKervey
  • Dave Van Damme
  • Denise Asker
  • Eric Lin
  • Jim Biehl
  • Julie Killian
  • Kevin Johns
  • Margaret Amsden
  • Miroslav Georgiev
  • Nina Wang
  • Rob Dutkiewicz
  • Ruben Ramirez
  • Sarah Russell
  • Sue Tuson
  • Tarah Ablett
  • Teresa Gordon
  • Tim Finerty
  • Tim Hilligoss
  • Wendy Reedy

Additional Resources

Additional news from Clayton & McKervey can be found below.

  • Subscribe to our email newsletter
  • View upcoming events
  • Contact us to let us know how we can help you

Website

  • COVID-19
  • Insights
  • Who We Help
  • Services
  • Events
  • Careers
  • About Us
  • Contact Us
  • Subscribe

Location

+1 248.208.8860
2000 Town Center
Suite 1800
Southfield, MI
48075 | USA

Connect

  • Events
  • Newsletter
  • Client Login

Social

  • LinkedIn
  • Facebook
  • Twitter
  • Glassdoor
  • YouTube
  • Instagram

Awards

DFP Top Work Places Best & Brightest
Prime Global

Tax | Accounting | Assurance | Consulting | Highly technical and accessible team of CPAs helping growth driven, closely held, middle market companies compete in the global marketplace. Michigan-based accountants and advisors focused on helping business owners in the United States and throughout Europe and China.

Privacy Policy Disclaimer

© 2021 Clayton & McKervey