Kyle Von Ruden December 22, 2017 5 min read

Legislative Brief: House and Senate Pass Tax Reform Bill

On Dec. 20, 2017, the tax reform bill, called the Tax Cuts and Jobs Act, passed both the U.S. Senate and the U.S. House of Representatives. The bill is now expected to be signed into law by President Trump shortly.

This tax reform bill, drafted based on a tax reform plan that was developed in consultation with the Trump administration, will make significant changes to the federal tax code. Specifically, the tax reform bill will have a substantial impact on businesses.

For example, it:

Lowers the corporate tax rate—Beginning in 2018, the bill reduces the corporate tax rate to 21 percent (down from 35 percent) and eliminates the corporate Alternative Minimum Tax (AMT), in an effort to make American corporations more competitive globally.
Creates a new tax deduction for small businesses—The bill establishes a new 20 percent tax deduction for all businesses conducted as sole proprietorships, partnerships, LLCs and S corporations.
Allows “expensing” of capital investments—The bill allows businesses to immediately write off (or “expense”) the cost of new investments for at least five years.
Repeals or restricts many existing business deductions and credits—Because the bill substantially reduces the tax rate for all businesses, it also eliminates the existing domestic production (Section 199) deduction, and repeals or restricts numerous other special exclusions and deductions (including those for employer provided transportation and commuting benefits). However, the bill explicitly preserves business credits related to research and development and low-income housing, as well as deductions or exclusions for employer provided dependent care assistance programs (DCAPs), education assistance programs and adoption assistance programs.
Ends “offshoring” incentives—The bill ends the incentive to offshore jobs and keep foreign profits overseas by exempting them when they are repatriated to the United States. It imposes a one-time, low tax rate on wealth that has already accumulated overseas so there is no tax incentive to keep the money offshore.
Repeals the individual mandate tax penalty imposed under the Affordable Care Act (ACA), effective in 2019.

However, the tax reform bill does not affect the following tax provisions:

Tax treatment of employer-sponsored health plans; and
The ACA’s Cadillac tax on high-cost employer-sponsored health coverage.

Hausmann-Johnson Insurance will continue to monitor the tax reform process for any future updates.

Hausmann-Johnson Insurance will be hosting an ACA Update webinar in February. To learn more, or to register, please click the button below:

Kyle Von Ruden

Kyle has been with Hausmann Group since 2008 and became an owner in 2016. He primarily consults employer groups on developing and/or maintaining their high level of benefits while controlling very important costs. Kyle works with various size employers, speaks publicly on alternative benefit strategies including HRA, HSA, FSA’s and proactively keeps his clients educated on the ever-changing Health Care Reform Requirements. He understands that employees are a business’s greatest asset and having a high level benefits program will undoubtedly help with recruitment and retention. He has previous experience as a Property Casualty Agent with Group, and a Commercial Lender in the banking industry. Kyle graduated from the University of Wisconsin-Madison with a BS in Economics. A fun fact - Kyle was a member of the UW–Madison’s Men’s NCAA Division 1 National Champion Soccer team in 1995. In addition to actively participating in two SHRM chapters, he also serves on the Board of Directors with 4 local community based not-for-profit organizations (President / Middleton Chamber of Commerce 2017, Executive Director / Pet Care & Assistance Fund, Treasurer / Middleton United Soccer Club and Board Member of Work Plus, Inc.)