After strings of debates and online discussions about the goodness and badness of the TCJA Act, the president finally signed it and it is now a part of the law. On the surface it seems that a lot is changing, and of course, in some areas there will be huge changes. However, many of the changes that seem “unprecedented” to the people are not considerable modifications. Let us first get to an overview of TCJA and then go into the details to know what its effects will be on business entities and individuals.
The Tax Cuts and Jobs Act– An Overview
TCJA will affect almost all the different forms of taxes that you know of—taxes that individuals pay on their yearly incomes to taxes that corporations have to be pay based on their structure type. The highlights of TCJA include the 21% flat tax rate for C-Corporations. The other highlight is the increased deductions for individuals. The third change that has received a lot of attention from the public is the new deduction of 20% (the pass through deduction) that individuals will be able to claim as QBI (qualified business income). The Tax Cuts and Jobs Act is a territorial taxation system whose aim is to bring home the money stored in foreign countries by large companies.