This would be a flat rate applying to corporations of all sizes, unlike the current law where small businesses pay a lower tax rate. The new corporate tax rate would be effective for tax years beginning January 1, 2018. The Tax Reform Bill cuts corporate tax rates to 21 percent. Employers should be ready to implement new withholding tables once they are available, but will be able to use the 2017 withholding tables until the 2018 tables are released. While the Tax Reform Bill retains the same number of individual tax brackets (seven) as the current law, most are lowered through the year 2025, to 10%, 12%, 22%, 24%, 32%, 35%, and 37%. One issue that will require attention is the changes to the withholding tables for federal income tax purposes. While the bill moves through this final phase of the legislative process, employers and business taxpayers should begin becoming familiar with the potential affects it may have on their organizations.īelow are a few of the changes that may affect business taxpayers: While President Trump has not yet signed the Tax Reform Bill into law, he is expected to sign it by the end of the year. On December 20, 2017, this historic bill (the “Tax Reform Bill”) passed both the House and the Senate and is awaiting President Trump’s signature. During the past few months, Congress has engaged in its largest tax reform effort in the last 30 years.
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