The Tax Cuts and Jobs Act, a $1.5 trillion tax cut package, was signed into law on December 22, 2017. The centerpiece of the legislation is a permanent reduction of the corporate income tax rate. The corporate rate change and some of the other major provisions that affect businesses and business income are summarized below. Provisions take effect in tax year 2018 unless otherwise stated.

Corporate Tax Rates

  • Instead of the previous graduated corporate tax structure with four rate brackets (15%, 25%, 34%, and 35%), the new legislation establishes a single flat corporate rate of 21%.
  • The Act reduces the dividends-received deduction (corporations are allowed a deduction for dividends received from other domestic corporations) from 70% to 50%. If the corporation owns 20% or more of the company paying the dividend, the percentage is now 65%, down from 80%.
  • The Act permanently repeals the corporate alternative minimum tax (AMT).

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Peter Scalise

Motion Picture and Television Production Tax Incentives (hereinafter “MPIs”) are tax incentives that are available at the U.S. Federal Level, at most of the U.S. Multi-State Levels, and on a Global Level through nearly a hundred participating countries worldwide and should certainly be incorporated into the tax planning process for movie and television studios to properly tax affect their costs of production.  Read More

On April 26, 2017 the White House released an overview of their tax reform proposal entitled The 2017 Tax Reform for Economic Growth and American Jobs: The Biggest Individual and Business Tax Cut in American History, which outlines President Donald J. Trump’s (hereinafter “President Trump”’) proposal for significant tax reform. While the proposal is largely consistent with President Trump’s conceptual framework during his presidential campaign pledges of dramatically reducing tax rates with the expectation of growing the economy and creating jobs within America much more deliberation needs to occur to properly examine and reconcile this proposal.

Lower Individual Effective Tax Rates, but Only for Select Individuals

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