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In late December 2017, Congress passed, and the president signed, the Tax Cuts and Jobs Act (TCJA), a tax overhaul that has wide-ranging implications for all taxpayers. For small business owners preparing FY2018 returns in the early months of 2019, it’s a mixed bag this year; some experts predict an overall positive effect, depending on the type of business you’re in and the type of financial activity you experienced. A year from now, though, as more of the overhaul’s provisions kick in, the impact will likely be more pronounced.

That means 2019 is a good time to understand the coming tax changes and position yourself for the challenges and opportunities ahead. In terms of perceptions, a recent study of small business owners found an overwhelming majority of respondents, 83 percent, have optimistic expectations*. But as with any legislation as complex as the TCJA, there’s still a lot of confusion; we’ll have to wait and see.

Significant changes to know about:

The changes under tax reform legislation are so complex, most accountants are still sorting through them. But some of the high-level themes are emerging. Here’s a list of highlights:

State and local tax (SALT) deduction: In previous years there was no limit to the amount you could deduct. Now there’s a $10,000 limit. This provision applies more to those with more than $100,000 in taxable income and those in states and municipalities that have higher property taxes, and/or income taxes. Details here.
Standard deduction for many pass-through and corporate entities: S corporations, limited liability companies, sole proprietorships and partnerships can now take a standard deduction of 20 percent—unless you’re in a service-based small business earning more than $315,000 per year (half that amount if single). Details here.
Lower tax rate for C Corporations: Your new tax rate drops significantly, from 35 to 21 percent.
Depreciation deduction: You can now deduct the full cost of many eligible equipment purchases instead of depreciating the cost over time. Details on depreciation and expensing here.
International businesses: Tax reform has a wide range of changes for companies doing business beyond U. S. borders, on topics that include gains and losses, deductions and depreciation, withholding and other tax issues. The IRS page on international taxpayers and businesses has details.
Employer expenses: There are numerous changes in which employer-related expenses you can deduct, including reimbursing employee use of bicycles, moving expenses and employee achievement awards. Details on this IRS page.

The tax reform package is filled with changes that already (or soon will) constitute good and bad news for practically all individuals and small businesses. Working proactively with the people who manage your company’s taxes, you can develop a strategy for maximizing any windfalls and minimizing any damage resulting from the new provisions. The most important takeaway: make it your business to know how tax reform affects your business. The last thing you want is to be unprepared.