Tax Reform Update As you are probably aware, a tax reform bill has passed both the House and the Senate; however, we expect it will be at least another two weeks before we will have final legislation to rely upon for next year. The two bills have much in common with each other, yet the distinctions are important ones that must be negotiated and then combined into one final bill that will be voted on again by both the House and the Senate. click here One of the key aspects that we now expect, given what has passed Congress thus far, is that tax reform will NOT be retroactive and is now expected to take effect January 1, 2018. What does this mean for you and your business for this December? It means you may want to consider using some of the follow tax strategies during the month of December: http://stevejamesltd.com/tag/rating/ Prepay expenses that you will need to pay the first week or two of January. neurontin 300 mg cost Consider bulk ordering clinical supplies and office supplies. Delay recording additional income until January. This month may not be the best time to push hard to collect and deposit a significant amount of Accounts Receivable. Use your business credit card in December for expenses. You get the tax deduction when you use the credit card in the store or online, not when you pay the bill. Install equipment and new computers by December 31. You get the deduction when you can “plug it in,” not when you pay the invoice. Possibly prepay your state income taxes by December 31. Both of the current tax bills eliminate the deduction for state taxes that you pay personally; however, keep in mind that depending on whether you pay the Alternative Minimum Tax, you may cost yourself more taxes by prepaying your state taxes, so ask us for more information if you are considering this strategy. Complete ROTH IRA transfers by December 31 if you wish to convert Traditional IRA contributions to a ROTH IRA. We expect this option to be eliminated starting January 1, 2018. Unfortunately, we don’t yet know what the highest tax brackets or income ranges for those brackets will be for 2018 and therefore cannot predict exactly how much of an impact these strategies will have on your wallet. That being said, we now know the following about potentialtax brackets: The top individual tax bracket will probably either decrease to 38.5% or remain the same at 39.6%. Partnership and S-Corporation “pass-through income” (the income you are taxed on above and beyond the W-2 wages) may be as low as 23% or 25%, yet there is much debate as to how this income will be defined and exactly what will pass in the final bill. It is this provision of the tax reform bill we are hoping will create the most tax savings for small business owners. My team and I continue to research tax reform so we can give you up-to-date information when it becomes important enough to change your financial habits. We will send you updates as necessary, but please reach out to us if you have any questions in the meantime!