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Neosho Businesses Learn Impact of Tax Reforms from BKD at Lunch - KOAM TV 7

Neosho Businesses Learn Impact of Tax Reforms from BKD at Lunch & Learn

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NEOSHO, MISSOURI -


States, businesses and individuals are trying to figure out new federal tax reforms. They  were touted as simplifying the system.   Today, some tax experts said the changes are anything but simple. During  a lunch and learn. event at the Neosho Chamber of Commerce, local businesses found out why.  


Leslie Lohse took notes on changes to the tax law.  She's the accounting manager for Mitchell pharmacies and drug stores. There are three. 

After the training Lohse said, "I do see some planning changes we will make very soon and I also see some benefits to the tax impact."

BKD tax directors explained big c-corporations are the biggest winners which shift from  to a flat twenty-one  percent. But they still pay  taxes on the same income in  payouts to shareholders. 
BKD's  Jess Myers said, "For large multi national businesses it's a big win. Manufacturers, construction contractors, they're gonna see some significant  benefits."

Mitchell's pharmacy is an s-corp  with thirty-seven employees and similar to limited liability corporations and partnerships. It's considered a  pass through business  because the profits and losses flow through  to the  owner who pays his/her  individual taxes on them. 

Myers explained, "We talked about the twenty percent pass through  deduction. That's a big one. I think there's some traps in there  for small businesses as far as  maybe what some expenses they got  to deduct before are not deductible now,  entertainment being one of those types.  Client entertainment expenses are no longer deductible."

But the pass through deduction could  be good for business overall.  Lohse explained, "If  tax liability  decreases,  that gives you more money to put into the business." For Mitchell's  accounting manager,  it's not just about getting answers for the business but employees as well. Lohse said,  "I have employees that come  and ask me questions when they're filing their tax returns.  So I'll be able to have more knowledge to share with them."
For individuals the increase in their standard deduction and loss of personal exemptions  was seen as a simplification in the tax reform. But for businesses, Myers said, "I think we've added a large degree of complexity." 

     Myers says some businesses will  consider shifting  from an s-corp to a c-corp. But recommends all take time to dig into the details first. 
Tax reform hasn't happened since 1986  so the law still has to be interpreted by the IRS and elements of it will likely be challenged in court.


 

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