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What Michigan Business Owners Should Know About the Tax Cut and Jobs Act (TCJA)

Date: 9/26/2018

At Heemer-Klein, we provide reliable and professional accounting services to residents in Sterling Heights, Warren, Richmond, and throughout Southeast Michigan. In addition to the best in tax preparation and bookkeeping services, the CPAs at Heemer-Klein also offer the latest tax information for individual filers and business owners. For example, on December 22, 2017, the Tax Cut and Jobs Act (TCJA) was enacted. And even though this was a while ago, many business owners are still uncertain about what this act means for them and their taxes. So, here is a brief explanation of how the TCJA benefits Michigan business owners.

A Brief Guide to the TCJA and What it Means for Tax Prep Warren, Tax Prep Sterling Heights, and Tax Prep Richmond

Because of the TCJA, Michigan business owners can now benefit from the “Pass-Through Deduction” (199A). This provides noncorporate taxpayers with a deduction of up to 20% of their Qualified Business Income (QBI), and noncorporate taxpayers include sole proprietors, sub-Chapter S corporations, and partnerships.

However, as with all tax regulations, there are rules and regulations to know and follow. Specifically, with TCJA, business owners should understand the following.

  • The allowed deduction is temporary and applies for tax years beginning after 12/31/2017 and before 01/01/2026.
  • The deduction applies to taxpayers who do not own C-Corporations
  • The deduction does not apply to wage income.
  • The deduction must be 50% of the allocable W2 wages of the entity with respect to its qualified trade or business OR the sum of 25% of the allocable W2 wages with respect to the qualified trade or business, plus 2.5% of the unadjusted basis immediately after acquisition of all qualified property (typically rental income businesses). OR, the business-owning tax payer may deduct 20% of the excess of taxable income of the taxable year over the net capital gains of the taxpayer for the taxable year.

 

These are just a few of the rules associated with TCJA, and even these few points are somewhat confusing to business owners figuring out their tax returns and optimizing their refunds. However, Heemer-Klein CPAs work hard to make tax regulations understandable to filers. We can help you navigate the tax filing process no matter what kind of business you own, and we expertly prepare taxes for individual tax payers, so they do not need to worry about making mistakes that can cost them money down the road.

Contact Heemer-Klein for the Very Best in Accounting Services and Tax Preparation

Business owners and individual tax filers should establish a good relationship with their CPAs before the official kickoff of Tax Season. So, give Heemer-Klein a call today at (586) 751-6060 in Warren, (586) 727-5145 in Richmond, or (586) 751-1040. Or, reach out to us with any questions through the contact form on our website.

2018
Oct-30-2018The Tax Cuts and Jobs Act of 2017Sep-26-2018What Michigan Business Owners Should Know About the Tax Cut and Jobs Act (TCJA)Sep-07-2018Are You Planning to Use Your Tax Refund to Cover Holiday Expenses?Jul-24-2018Heemer Klein & Company, PC Protects Client Data Against Cyberattacks Jun-01-2018Why Most Small Business Owners Should Convert their LLCs and C Corps to S CorporationsMay-18-2018How to Start Tax Preparation for 2019 Right NowJan-08-2018Tax Cuts and Jobs Act
2017
Oct-17-2017Small Business Health Care NewsJan-14-20172017 Standard Mileage Rates
2015
Dec-21-20152015 Tax Extenders (PATH Act) UpdateOct-27-2015Affordable Care Act (Obamacare)Sep-09-2015IRS News and InformationJul-09-2015"Solo"401K" Retirement planMay-26-2015Deducting Losses from a DisasterApr-03-2015Avoid Late Filing PenaltyMar-23-2015Reporting Foreign IncomeMar-19-2015Home Office Tax DeductionMar-06-2015Education Tax CreditsMar-02-2015Small Business Health Care Tax CreditFeb-27-2015Early Retirement DistributionsFeb-26-2015Net Investment Income TaxFeb-24-2015Capital Gains and LossesFeb-09-2015Missing W-2 / Prior year Tax Return CopiesJan-12-20152014 Comprehensive Tax Year In Review
2014
Dec-31-2014Tax Updates 2014May-23-2014Year End Tax Planning -- AMTMay-01-2014Standard Mileage RatesJan-03-2014The 2013 New 3.8% Net Investment Income Tax & Business Tax Breaks
Past
Dec-13-2013The Affordable Care ActJun-01-2013Higher Education Costs Continue to EscalateMay-01-2013Tax Breaks for Families and StudentsApr-01-2013Residency Issues for RetireesMar-01-2013American Taxpayer Relief Act of 2012Jan-01-2013Filing Status Implications