Senate Tax Reform Proposals Announced

Momentum appears to be building for a slate of tax changes that could affect most small businesses and their owners. Those changes include:

  •  Online reporting of Forms 1099.
  • Eliminating the requirement to correct Forms 1099 for errors less than $25.
  • Requiring the reporting of outstanding mortgage balances along with mortgage interest paid.
  • Reducing the number of depreciation rates from 40 to five.
  • Permanently setting the business expensing election (Section 179) to $1 million, indexed for inflation each year.
  • Repealing the LIFO (last-in, first-out) inventory method.
  • Repealing the like-kind exchange rules.
  • Allowing all companies under $10 million of annual gross receipts to adopt the cash method of accounting, including the expensing of inventory.

 

As with any contemplated changes, these are not set in stone and there is no way at this point to predict when any or all of these changes would be effective.  As the details are ironed out, we will let you know.