The Tax Cuts and Jobs Act passed by Congress and signed by President Trump in late December includes many changes in business taxes. Of the changes highlighted in Crain’s Cleveland Business, Vol 39, No. 2, January 9-14, 2018, DMS Management Solutions identifies these two as most pertinent for our clients:
- The corporate income tax rate drops. The rate for traditional, so-called C Corporations, falls to a flat 21% from the current range of 15% to 35% and the corporate alternative minimum tax (AMT) is repealed.
- More use of cash accounting. Until passage of the new law, businesses with annual revenue of more than $5 million needed to use accrual accounting. Now businesses with fewer than $25 million in annual sales can use the simpler, cash method of accounting.
Visit the IRS website for updates and resources regarding the new tax legislation.