Tax TALKING HEADS: CalCPA Members Share Advice Regarding the Tax Cuts & Jobs Act.

• Author: English, Damien B.M.

Are you prepared for the new tax bill recently passed by Congress? The Tax Cuts and Jobs Act (TCJA) joins a long line of new legislation CPAs will have to educate themselves on before this administration is done in the White House. CalCPA and CalCPA Education Foundation instructors have updated top tax courses and added new topics directly addressing the issues and implications for your clients to keep you informed. You can check out updates and course listings at calcpa.org/taxlawupdates.

We also decided to field reactions to the TCJA from a variety of CalCPA members for an idea of some of the top things CPAs should be aware of during the beginning days of this new tax law

Mark F. Seid, CPA, EA, USTCP

Seid & Company, CPAs

Here are my top three things CPAs should know right off the bat:

1. The TCJA made fundamental changes in the structure of tax returns and 2018 will be the year of education not only for tax practitioners, but also for our clients. We need to understand how to plan with the new law and then effectively communicate tax-advantaged strategies to our clients.

2. The TCJA gave us the new Sec. 199A deduction of 20 percent of qualified business income. For taxpayers above the threshold amounts, failure to plan could result in losing out on this deduction entirely. We need to encourage our clients to engage us for mid-year and year-end tax planning-2018 tax planning will pay off more than ever before.

3. The TCJA is a federal law. California does not conform to most of the changes in the TCJA. While federal income tax returns may have become easier to prepare for some, their California income tax returns will still follow the rules in place prior to TCJA. As a profession, we should be encouraging our Legislature to keep pace with changes in federal laws to ease the tax compliance burden on California taxpayers.

   Scott Hoppe, CPA

   Partner, Why Blu

   1 lie major thing we can do is let clients know it is not straightforward. The 2018 tax law is poised to benefit small businesses across the board. Those benefits, however, are not so straightforward. The Wall Street Journal (wsj.com/articles/what-do-a-plumber-and-a-celebrity-brand-have-in-common-they-could-miss-out-on-a-big-tax-break-1516363201) eloquently captured the complexity:

   "The owner of a successful chain of tanning salons should qualify for a new tax deduction, but someone who makes the same amount from a group of dermatology clinics won't. A high-earning architect can generally claim that same tax break, but the designer who collects a big fee for working on the building's interior probably can't. A chef who owns her restaurant can also expect to pay less, but that may not be true if she is a celebrity chef... doctors, lawyers and others in service businesses can't claim the break if they earn too much money."

   The law is as clear as mud.

   Gary R. McBride, CPA, JD, LLM,

   Professor Emeritus, California State University, East Bay The new law forces tax professionals to re-think certain long-held assumptions about the federal tax law

   Choice of Entity

   Under prior law, C corps were generally regarded as inferior from an income tax standpoint relative to sole proprietorships, partnerships and S corps. For tax years beginning after 2017, the total C corp federal tax (at the entity and owner level) on $100 of C corp earnings is...