President Donald J. Trump has delivered on his campaign promise to enact tax reforms that benefit both individuals and businesses with his recently-passed bill, The Tax Cuts and Jobs Act.
Under this new legislation, which takes effect January 1, 2018, the new tax plan is a pro-growth tax plan, which would spur an additional $1 trillion in federal revenues from economic growth, with approximately $600 billion coming from the bill’s permanent provisions and approximately $400 billion from the bill’s temporary provisions over the budget window.
Current and prospective clients of Tenet Financial Group have already been asking, “What does this plan mean for me and my business?,” so let’s look at a few key benefits (although there are others as a result of this plan) together…
- Perhaps the most significant benefit in the above stated “pro-growth plan” is the permanent lowering of the corporate income tax from 35 percent to 21 percent. The gist is that businesses will be able to create more jobs and raise wages, reinvest more in their success and more. We’re already hearing about how companies like AT&T are planning to add 7-8,000 jobs and Fifth Third Bank raising its minimum wage to $15 per hour.
- Establishes a 20 percent deduction of qualified business income from certain pass-through businesses.
- Allows full and immediate expensing of short-lived capital investments for five years.
- Eliminates the corporate alternative minimum tax.
Not to be overlooked is the main impact on the overall economy:
According to the Tax Foundation’s Taxes and Growth Model, the Tax Cuts and Jobs Act would increase the long-run size of the U.S. economy by 1.7 percent. The larger economy would result in 1.5 percent higher wages and a 4.8 percent larger capital stock. The plan would also result in 339,000 additional full-time equivalent jobs.
The business climate in America continues to improve and looks even brighter with the new tax plan in place. And, for those who want to start a new business, purchase an existing business or even recapitalize their business in 2018, Tenet Financial Group can help you make the most of your new tax benefits under the new plan – including taking advantage of the full 14 percent reduction in corporate income tax under an approved 401(k)/ROBS Rollover funding plan. Imagine what that 14 percent can do for your business needs!
Give Tenet Financial Group a call today to discuss your plan options: 1-888-901-3335.