Significant changes in tax rates for businesses will require viewing decision-making through a new lens. Decreased rates will impact how organizations choose to do business, but what does that really mean for C corporations, pass-through entities, and individual business owners?
Should you incur additional debt with the new interest limitations? Should you still incur entertainment expenses that are no longer deductible? Should you accelerate acquisitions of fixed assets to take advantage of more favorable depreciation rules? With attractive new rates, should you convert to a different entity type?
Detailed analysis will be needed for a fully informed decision on all of these questions. There’s still a lot you can do after year end to shift deductions and income between 2017 and 2018. Executing on these items can result in significant tax savings because of the decrease in tax rates in 2018.