I was pleasantly surprised to see Congress pass the 2017 Tax Cuts and Jobs Act before the year was over.
Now, we all need time to understand the 503 pages of the new tax law. It’s hoped it will improve the tax treatment of businesses in the United States. Many more businesses (those with less than $25 million of gross receipts) will be able to use the cash method and get faster depreciation expense deductions.
Maybe you will see your individual income taxes reduced in 2018. Since Nevada isn’t a high-tax state like California and New York, the new provisions for itemized deductions will benefit most Nevada citizens.
This new law may result in even more folks leaving California in the future. Hopefully the ones who move here will not bring with them all the regulations and taxes they have in California.
The hope is the economy will finally get going again with higher gross domestic product that may result in more and better jobs. Maybe the moving corporation headquarters to other countries will slow or even stop.
The new law has a few provisions that relate to individual income tax returns. But most of the new law is about business income provisions. It will take some time, probably months, before we really understand all of the new rules and how they work.
The best suggestion is to wait for an easy way to prepare a DRAFT income tax return for 2018. You might use the same information you have for 2017. Then you may have an idea of what change may happen for you.
It seems the Tax Cuts and Jobs Act is the most sweeping update to the U.S. tax code in more than 30 years. It will take some time for all of the provisions to be fully understood.
Even minor tax law changes may have results other than what was understood when the change was adopted. It will be normal to see if there are some surprises for some of the new law changes.
The expectation is Congress will do some other changes in the future, including making some of the provisions permanent.
I still have a copy of our 1960 tax return when I was in the Army. It really is a postcard size.
Did you hear? “If you don’t have a plan B, you don’t have a plan,” by Adam Bryant.
John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs.