Treasury issued the final rules on 199A earlier this month. You can read the rules and accompanying guidance here:
You can also read a terrific “how does it all work” review published in Forbes the other day. As the writer notes:
I believe in giving credit where credit is due, and …
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From the corporate perspective, the early returns on the new tax bill are promising. The markets certainly like the lower corporate tax rate and dozens of public companies have announced tax-cut related investments, wage hikes, and bonuses. For the corporate world, the new law appears to be doing exactly what its authors hoped for.
But what about Main Street businesses? Will they benefit from the new law? There, the outlook is much more complicated. C corporations got a rate cut. Pass-through businesses got a 20-percent deduction. The deduction is helpful, but it is smaller than the rate cut and it raises …
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Top Line
The Framework and rhetoric leading up to its release indicated that Senate Leadership and the Finance Committee were committed to treating the millions of companies organized as pass-through businesses fairly in relation to C corporations. The Framework explicitly called for a rate differential of five percentage points, while previous Finance Committee work focused on leveling the playing field between C corporations and pass-through businesses by eliminating the double corporate tax and moving the entire business community towards a single, reasonable level of tax on all businesses.
Unlike much of the business community, S-Corp fully supported both efforts and expressed that …
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The House tax reform bill to be considered this week has a headline top rate of 25 percent for S corporations and other pass-through businesses, but in many cases the real rate is significantly higher. S corporation owners need to pay attention.
Here are some of key details:
WASHINGTON, D.C. – S-CORP has been a vocal supporter of the House Republican Blueprint and the unified tax reform framework. We have serious concerns though about the pass-through provisions in the tax reform draft released today. They fall well short of parity with the new 20-percent corporate rate, and, absent amendment, would result in tax hikes for a broad range of pass-through businesses. We look forward to working with the Committee and House leadership to address these concerns and move forward on tax reform.
We support the new 25-percent pass-through rate, but the guardrails that accompany the rate would severely limit …
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