Sands Anderson’s attorneys share their insights on the new Tax Cuts and Jobs Act and how it affects businesses, non-profits, tax-exempt bond financing, trust and estate planning, and spousal support.
Passthrough Qualified Business Income Deduction
In December of 2017, the Tax Cuts and Jobs Act was signed into law, which includes a maximum 20% deduction in qualified business income (QBI) that an owner of a pass-through entity receives. There are specific and sometimes intricate requirements in the Tax Cut and Jobs Act to qualify for the deduction. Our tax professionals, Gregory Bergethon and David Gundlach, speak to the benefits of QBI for business owners, provide insights in meeting the qualifying criteria, and suggest some possible planning opportunities that are afforded under the new tax law.
New Interest Expense Limitation
The Tax Cuts and Jobs Act grants tax relief for certain business entities; however, these cuts are partnered with some eliminations of previous deductions. David Carroll, one of our experienced corporate transaction attorneys, speaks about the new interest expense limitations in the new tax law, provides some insight into how the restrictions work, and describes the exceptions to the application of the new limitation.
New Tax on Nonprofit Executive Pay
Top executives at large nonprofit entities are subject to a 21% excise tax for the first time. Faith Alejandro, one of Sands Anderson’s labor and employment law professionals, breaks down the ways in which this new change may impact nonprofits both large and small that pay large annual compensation or provide large severance packages to their executives.
New Tax Law Changes Affecting Tax-Exempt Bonds
The new Tax Act impacts the municipal bond market based on a variety of factors; most notably, advance refunding bonds are not issued on a tax-exempt basis. Another significant change is that the new Tax Act does not reauthorize most tax-credit bonds, including QZABs, QSCBs, QECBs and CREBs. Dan Siegel and Jesse Bausch, two of our municipal finance and bond professionals, discuss the complexities and consequences of the new Tax Act concerning tax-exempt bonds.
Trust & Estate attorney Tim Nordgren summarizes the highlights of the new Act, including the reduction in the corporate tax rate, increase in exemption amount for estate and gift taxes, changes to the kiddie tax, and ABLE account changes.