Uncertain outlook for business taxes under Trump

There are two types of changes being talked about this tax season among accountants: the run of the mill and the Trump-inspired.

One type, while important, is clearly defined and resides squarely within the realm of typical changes that come along nearly ever year in the tax rules. Then there are the changes that President Donald Trump has promised, which could be sweeping but otherwise remain murky at the moment, accountants say.

“Who knows what Trump is going to do,” said Tom Banks, co-owner of Banks & Associates CPAs LLC in Mansfield. “Everything I read says significant tax reform is on the horizon.”

The looming changes mean that for some accountants the start of 2017 is fairly typical, with an early-year rush, some important changes to help clients navigate and the hitting of all the tax deadlines. But as the year unfolds, accountants will be tuned in to association updates, trade publications and other news sources to stay abreast of changes that are likely, said Crystal Kent, tax director at Wilson, Shannon & Snow Inc., a Newark accounting firm.

“I read every day and get updates every day,” she said.

Among the more staid changes in play this tax season are filing deadline adjustments for certain types of businesses and changes to rules governing depreciation - the kind of tax tweaks that you’d typically visit an accountant for.

But as for the changes coming up from the Trump administration, accountants aren’t much more in the know yet than their customers - but that doesn’t stop clients from inquiring.

“The problem is, I don’t know how it’s going to play out,” Kent said. “I feel like a meteorologist or an economist.”

Trump proposed tax changes in his campaign that would lower tax rates and simplify the tax code, and said Feb. 5 that he is hopeful his tax reforms can be put in place in 2017.

“The general consensus is that tax rates will probably decrease,” said Beth Keefer, co-owner of William C. Keefer & Associates CPAs in Mansfield. “So I think that is going to happen at some point.”

Clients have also been inquiring about what a repeal of Obamacare could mean for taxes, because some would rather not have health insurance if there will no longer be a penalty for going without coverage, Keefer said. Many small business owners get health insurance through Obamacare, she said. But the tax implications of an Obamacare repeal remain unclear pending more details from lawmakers, Keefer said.

“Is it going to be peeled back? And if so, my clients want to know that,” she said.

Trump has pledged to repeal Obamacare, but a clear path has not yet emerged for how that might be undertaken - or for what might replace the health insurance framework.

For the time being, accountants will be in a “wait and see” mode, but changes could be exciting- at least for people whose life work is in taxes, Banks said.

“We always heard about the big tax reforms of President (Ronald) Reagan and what he did in the 1980s,” said Banks, who has been in accounting since 1994. “It’s neat to kind of see, especially when you have someone like Trump lowering taxes and making things easier for everyone.”