YOUNGSTOWN, Ohio — Since President Donald J. Trump signed the Tax Cuts and Jobs Act of 2017 into law last December, the debate over its benefits to business has been ongoing – and changing.
From tax rate changes and deductions to exemption rules, the tax reform affects everyone, says Tim Petrey, managing partner at HD Davis CPAs in Youngstown, and how all of its provisions will be defined remains to be seen.
That’s why HD Davis is presenting a free webinar at 1 p.m. Sept. 20 hosted by The Business Journal. CPAs from the firm will review the details of the new law and explain why tax plans based on rules from 10 years ago might not be right for the current environment.
“This is drastic enough of a change that your plan may be the exact opposite of what you should be trying to do now,” Petrey says.
Typically, tax planning is rooted in deferment, such as putting money in retirement accounts or 401(k) plans. But with tax rates at a minimum of 3% lower year-over-year, Petrey says his firm is advising some customers not to defer; to pay the taxes now and take advantage of the low rates.
On top of the 3% decrease, the reform reduces pass-through taxation by 20%. Owners of businesses incorporated as pass-through entities – such as partnerships or S-corporations – pay taxes at individual rates. With the deduction, they could realize savings of 50% or more “collectively over the life of the tax code,” he says.
Deferral tax accounts and traditional IRAs and 401ks invest money pre-tax. “But when you pull the money after you retire, you’re going to have to pay it,” says Angela Duskey, partner and head of HD Davis’ tax department.
By paying the taxes now and taking advantage of the lower rates, customers can avoid paying the higher rates that will eventually come due, she advises.
Petrey and Duskey will be joined by HD Davis’ manager, Christine Graygo, and staff accountant, Angela Johnson, who will outline the details of the reform compared to previous tax rules and what companies need to know moving forward. Topics will include standard and itemized deductions, exemptions, tax brackets and rates, and new accounting methods. A question and answer session will follow the presentation.
During the webinar, attendees will learn why self-employed workers have the most to gain, and who has the most to lose, including retired taxpayers, salesmen and even bicycle commuters, Petrey says.
In addition, they will address how the law impacts day-to-day business.This includes anyone with expenses not reimbursed by an employer, such as driving from work or entertaining clients.
“The ability to deduct those things goes right out the window,” he says.
This is the first webinar presented by The Business Journal, and is a part of the multiplatform publisher becoming more of a business-to-business resource for regional companies, says its chief revenue officer, Jeff Leo Herrmann, who will moderate the webinar.
“Now more than ever, companies are using webinars as a way to reach new audiences and distribute information in an effort to educate to dominate their respective market,” Herrmann says. “We’re excited to launch this new service to the regional business community – a service that is the first piece of so much more to come.”
The value in attending the webinar is that it presents a lot of information into a succinct package, Petrey points out. It’s especially beneficial to self-employed entrepreneurs that the tax reform benefits, he says.
“If you’re self-employed, you’ve only got so much time in the day. You’ve got to balance between your family, work and customers,” he says. “The webinar is the most convenient route of getting that information in front of the people.”
The webinar is free and open to the public, and will use the Zoom platform.
Register at BusinessJournalDaily.com/tcja-webinar. Registration is open until Sept. 19 at 5 p.m.
Copyright 2019 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
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