Home » Portfolio » Featured News » 115th Congress delivers comprehensive tax reform package

115th Congress delivers comprehensive tax reform package

President signs Tax Cuts and Jobs Act

On December 22, 2017, President Donald Trump signed into law the Tax Cuts and Jobs Act (The Act), a sweeping tax reform law that will significantly change the tax landscape for business and individual taxpayers. The legislation reflects the largest major tax reform in more than three decades.

The Act took shape at a breakneck pace over a two-month period, with the House passing its version of the bill on November 16 and the Senate passing its version on December 2. The two versions were then reconciled into a single piece of legislation which, due to a procedural complication, underwent a number of small revisions prior to final passage by the Senate and House.

For businesses, the legislation permanently reduces the corporate tax rate to 21%, repeals the corporate alternative minimum tax, imposes new limits on business interest deductions, and makes a number of changes involving expensing and depreciation.

As important as the provisions contained in the Act, are perhaps certain provisions of existing tax law of significance to the restaurant industry that were not changed.

  • The Section 45B credit for FICA taxes paid on certain employee tips remains.
  • Business meals are still 50% deductible.
  • Employers can still take advantage of the Work Opportunity Tax Credit.

This comprehensive tax overhaul dramatically changes the rules governing the taxation of individual taxpayers for tax years beginning before 2026, providing new income tax rates and brackets, increasing the standard deduction, suspending personal deductions, increasing the child tax credit, limiting the state and local tax deduction, and temporarily reducing the medical expense threshold, among many other changes. The legislation also provides a new deduction for non-corporate taxpayers with qualified business income from pass-through entities.

Detailed information regarding the Tax Cuts and Jobs Act, Public Law 115-97, is available here.

Author: MRA


Lost your password?