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The Tax Cuts and Jobs Act – Now That Filing Season Has Ended, What Comes Next?

Americans have now completed their first journey through the Tax Cuts and Jobs Act (TCJA). There were numerous concerns from businesses and individuals alike as to how they would endure such significant changes come filing time, and now that April 15 has come and gone, now is the time to assess what worked well and where possible improvements can be made.

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Americans have now completed their first journey through the Tax Cuts and Jobs Act (TCJA). There were numerous concerns from businesses and individuals alike as to how they would endure such significant changes come filing time, and now that April 15 has come and gone, now is the time to assess what worked well and where possible improvements can be made.

Americans have now completed their first journey through the Tax Cuts and Jobs Act (TCJA), a landmark tax reform act signed into law in late 2017—taking effect in 2018—that launched the single biggest one-time change in tax policy since the Tax Reform Act of 1986. There were numerous concerns from businesses and individuals alike as to how they would endure such significant changes come filing time, and now that April 15 has come and gone, now is the time to assess what worked well and where possible improvements can be made.

The bottom line is this—the 2019 filing season was unlike any other. The vast scope of federal, state and international complexities contributed to this new environment, coupled with the time needed to carefully apply the new legislation for each business and individual. And not only did our legislative platform change, so did the actual body of the tax filings themselves. Tax forms were significantly altered, new forms were added, and a host of new disclosures and elections became the norm. For added flair, nearly every state unveiled their own legislative changes to combat their economic situations and/or adopt or deny whether the state would follow the federal changes. It all added up to something we have not seen in decades.

In many situations we saw that TCJA presented significant opportunities to improve one’s overall tax position, particularly at the entity level. There are numerous business-friendly opportunities, elections and legislative changes that require careful attention—if the channels are properly navigated, the opportunity for significant tax savings exists. And now that filing season over, it is still a critical period for businesses and individuals to ensure their tax filings incorporated all options and that they are properly positioned for 2019 and subsequent years.

A consistent theme this year centered on the idea of “surprises.” Despite the attention TCJA received in the months leading up to Tax Day, many were still caught off guard at the business and individual levels, and found themselves either pleasantly surprised or terribly disappointed. But very few taxpayers were left in the middle, seeing no impact. As a result, this heightened the importance of planning, staying in front of the changes and taking a proactive approach.

Moving forward, both federal and state laws will most likely continue to evolve. There are still significant TCJA matters that have yet to be finalized and the IRS and/or Congress has already confirmed areas where technical corrections are needed. And, in some cases, certain business tax returns were extended as we await corrections that could have a significant impact on their tax position. The accounting industry is currently waiting on additional guidance to be issued on several topics and will be monitoring closely how this impacts the businesses and individuals it serves.

So, what comes next? Plan, plan and plan. As many learned the hard way this year, creating a tax plan and strategy needs to happen early in the year, not in December 2019 or January 2020. The key to successful tax planning is connecting and tailoring opportunities under TCJA, including state and international legislation, to the goals of the business. And those who utilize this time to plan and strategize for the coming year can focus on finding the opportunities that exist and be poised for future success.

Disclaimer: Any written tax content, comments, or advice contained in this article is limited to the matters specifically set forth herein. Such content, comments, or advice may be based on tax statutes, regulations, and administrative and judicial interpretations thereof and we have no obligation to update any content, comments or advice for retroactive or prospective changes to such authorities. This communication is not intended to address the potential application of penalties and interest, for which the taxpayer is responsible, that may be imposed for non-compliance with tax law.

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