CPAs and Advisors with Your Growth in Mind

Planning for the New Business Interest Expense Deduction Limitation

As part of the Tax Cuts and Jobs Act (“TCJA”) signed into law on December 22, 2017, some important changes have been made with respect to the deductibility of business interest expense for tax years beginning after December 31, 2017. Under prior law, business interest expense was generally deductible in the year in which the interest was paid or accrued, except that corporations were subject to certain limitations under IRC Section 163(j) (“the earnings stripping rules”). TCJA created a new limitation, which replaces the “earnings stripping rules” and applies to all businesses, regardless of form, on the deductibility of net. Read More.

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FASB Q&A Issued for Staff Accounting Bulletin on Tax Reform

The Financial Accounting Standards Board (“FASB”) has published a Staff Q&A regarding whether private entities and nonprofits can apply Staff Accounting Bulletin (“SAB”) No. 118 (Topic 5.EE, Income Tax Accounting Implications of the Tax Cuts and Jobs Act). In its Staff Q&A, the FASB says it does not oppose private entities and nonprofits applying the Securities and Exchange Commission’s interpretive guidance for tax reform . The document also notes that such companies and organizations that employ SAB No. 118 would comply with GAAP. SAB No. 118 was issued in response to the Tax Cuts and Jobs Act. The guidance allows an entity, in certain situations, to include in its financial statements. Read More.

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New SEC Interpretive Guidance Addresses Tax Reform

In response to the passing of the Tax Cuts and Jobs Act, the Securities and Exchange Commission (“SEC”) has released interpretive guidance to help public companies and auditors adapt to the tax changes and comply with accounting for income taxes. The first guidance is in the form of Staff Accounting Bulletin (“SAB”) No. 118 (Topic 5.EE, Income Tax Accounting Implications of the Tax Cuts and Jobs Act). Under SAB No. 118, companies preparing their 2017 fourth-quarter and end-of-year financial statements and regulatory filings will be allowed to provide what the SEC calls “reasonable estimates” and “provisional amounts” for tax-related line items.. Read More.

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