While creating a significant level of confusion and a high level of positive expectations, the recent tax law changes are slowly playing out in company financials, a little bit like the spring thaw after months of cold winter storms. The goal of the law is to provide business owners with more positive cash flow opportunities.
“This is the most significant change in the tax law since 1986,” says Carlo Ferri, Director –Tax Strategies at Kreischer-Miller, “and it will have winners and losers. All manufacturers will need to evaluate their current tax situation and look to maximize potential savings while avoiding adverse tax consequences.”
While a welcome benefit, it also requires financial strategy adjustments and a long wait for IRS rulings.
Discussion About New Tax Law’s Impact on Manufacturers
The Manufacturing Alliance is going to take some time during our next event to explore some of the tax issues, both pro and con. One of our event panelists, Roy Kershaw, Tax Partner at Baum, Smith and Clemens, added,
“The 2017 tax law changes made choosing the most beneficial entity for a particular business more difficult. Choosing that initial entity structure or even deciding if your current business may benefit from a change will require significant analysis. The tax, financial and legal factors are numerous.”
At the very least, we hope to provide some helpful hints about how some of these fuzzy areas might affect you.
The key components of the new tax law include;
- Reduction of a corporate tax rate to 21%
- Repeal of alternative minimum tax
- New limits on business interest deductions
- Suspension of employee itemized deductions and the allowances for fringe benefits
- New pass through tax rate
Ken Krauss, of US Axel, and Richard Smith, of Rockwell Immunochemical, will join Roy and Carlo on the panel to discuss some of their business issues and responses around the new tax laws. It is an open forum and should provide some nuggets of guidance for each attendee.