Gilmore Jasion Mahler Experts Explain New Tax Law
The Tax Cuts and Jobs Act signed into law on December 22, 2017 has businesses and individuals around the country trying to get a handle on how the new law affects them. Northwest Ohio is no exception. Many are looking for direction from Gilmore Jasion Mahler (GJM) tax experts. Should they change the classification of their business to take advantage of the new 21% corporate tax rate? How have business deductions changed? What does the new standard deduction mean for their families?
Hundreds turned out for GJM education sessions on the new tax law held in both Maumee and Findlay the first week of February. Tax partners Charlie Heid, CPA and Steve Schult, CPA presented on the big changes for individuals and businesses. Their presentations were followed by a GJM panel of tax experts who tackled some questions on the new tax law's impact.
The GJM panelists included: Tax Partners Dave Baymiller, CPA, Deanna Hall, CPA, Kathi Iott, CPA, Chuck Stumpp, CPA, and Jaimee Weaver, CPA. GJM Managing Partner Kevin Gilmore, CPA welcomed the attendees to the sessions.
“The law passed quickly, just before Christmas and people and businesses haven’t had much time to get a handle on its impact,” says Gilmore. “The new law is anything but tax simplification. We knew our education sessions would help people get a better grasp, but we’ve encouraged all of the attendees to reach out to their tax professionals to discuss their individual situations.”
Major changes for businesses within the Tax Cuts and Jobs Act include:
-Corporate tax rate reduced to a flat 21%
-Corporate Alternative Minimum Tax (AMT) repealed
-Pass-through businesses (businesses that pass their income through to the personal level for tax purposes): 20% deduction of income. Effective tax rate on qualified income will be reduced to 29.6%
-Sec. 179 limit increased to $1M from $510,000 for property in service after 12/31/17.
-100% bonus depreciation for qualified property acquired and placed in service after 9/27/2017 and before 1/1/23.
-Limits on business interest deduction
-New restrictions on deduction of fringe benefit expenses:
- Entertainment expenses are now nondeductible
- Business meals remain deductible at 50%
- Meals provided for the convenience of the employer are reduced to 50% deductible, but only through 2025
-NOLs (Net Operating Losses): 2-year carryback repealed, 20-year carry forward changed to indefinite, 80% taxable income limitation on usage
-Tax credits retained include:
- Research and Development Tax Credit
- Work Opportunity Tax Credit
Among the changes for individuals under the new tax law:
-Standard deduction essentially doubled (through 12/31/25) to $24,000 (filing jointly) and $12,000 for individuals.
-Itemized deductions no longer allowed include:
- Tax prep fees
- Investment advisory fees
- Unreimbursed employee business expenses
-Itemized deductions also impacted:
- State and local taxes still deductible, but now limited to $10,000
- Mortgage interest now deductible only on the first $750,000 in debt for primary or secondary homes
-Affordable Care Act individual mandate penalty eliminated
-Child tax credit increased to $2,000 for children under 17
-Alimony is not deductible or includable in income related to divorces after 12/31/18
-Estate Tax is not repealed
Many of those attending the education sessions were looking for some clarity on the new rules for pass-through businesses. GJM Tax Partner Dave Baymiller says those pass-through businesses that qualify for the 20% deduction include:
- Partners in partnerships/LLC’s
- "S" corporation shareholders
- Sole proprietors (reported on Schedule C)
- Rental real estate (reported on Schedule E)
He says there are some limitations depending on your taxable income.
“The 20% deduction is limited based on taxable income level, amount of compensation paid by business and/or amount of business property owned,” says Baymiller. “The deduction limitations for what are called specified service businesses are much more severe.”
Baymiller says many businesses are also looking for clarification on what qualifies as a “specified service business”. He says they include:
- Healthcare professionals (physicians, nurses, dentists)
- Lawyers, accountants
- Financial, brokerage, investing, and investment management services
- Any business where the principal asset of such business is the reputation or skill of one or more of its employees or owners (the IRS has not issued any guidance on how to interpret this)
If you're looking for more detail, Dave has written a more in depth article on the impact of tax reform on pass-through entities. GJM’s Tax team says many businesses are also trying to determine if they should consider converting from an "S" corporation to corporation (or "C" corp) to take advantage of the reduced corporate tax rate. An "S" corp is a pass-through business in which income "passes through" to the owner's personal tax return. A corporation or "C" corp would be subject to corporate taxation.
It sounds like a simple question, but the answer is anything but simple. Tax Partners Deanna Hall and Chuck Stumpp walked through an example for attendees of a business with a million dollars of taxable income that factored in:
- Taxes paid at corporate level
- Taxes paid at shareholder level
- Taxes paid on cash withdrawn from the business (federal tax on "S" Corporation distributions or federal tax on corporate dividends)
“What we wanted to show is that every business is different,” says GJM Tax Partner Deanna Hall. “Depending upon a number of factors it could make sense for your business to incorporate to take advantage of the new low corporate tax rate, but it may not. That’s why it’s so important to talk to your tax advisor to come up with an individualized plan.”
Many attendees said they walked away with a much better idea of the impact of the Tax Cuts and Jobs Act on their personal and business tax strategy. GJM presenters made it clear that every situation and every business is different, and stressed the importance of a one on one discussion with your tax professional. GJM tax experts are already having these important discussions with clients to ensure the smartest tax strategy for 2018. Learn more about GJM’s approach to tax strategy.
Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.
Gilmore Jasion Mahler Hosts Major Findlay Fundraiser Carnevale for Flag City Honor Flight
Hundreds are expected to gather in early November for a festive evening full of revelry and some surprises, as Gilmore Jasion Mahler hosts Carnevale 2017, an Italian festival-style evening of celebration at Findlay’s Marathon Center for the Performing Arts.
The event is November 3 from 5:30 p.m. - 9 p.m. and will feature music and live performers, Italian specialties from Chef Sam Fittante of the Bistro on Main, a live auction and some other surprises. All proceeds from the event and corporate sponsorships will go directly to Flag City Honor Flight, a nonprofit that bring Veterans to Washington, D.C. to see the memorials built to honor their service to our country. Last year’s Carnevale event raised over $42,000 and helped the nonprofit to pay for a second flight in 2017.
Corporate sponsorship helped make Carnevale 2016 a success and the same holds true for this year’s event. Many Carnevale corporate sponsors are back on board, including major sponsors Ohio Logistics and Rowmark. Huntington National Bank also came on board this year as a major sponsor.
“Community stewardship is a major core value of who we are as a company,” says Rowmark CEO and President Duane Jebbett. “We’ve seen the great work that Flag City Honor Flight does in recognizing and serving our Veterans. It is because of our Veterans we live in a free country, so Kathy and I are thrilled to support GJM in their effort to carry forward the Honor Flight Program locally. We didn’t hesitate to come on board as a Carnevale sponsor again this year.”
Ohio Logistics President and CEO Chuck Bills served as a Guardian on the June Honor Flight, escorting a Veteran to Washington, D.C.
“Ohio Logistics is a proud supporter of Flag City Honor Flight,” says the company’s President and CEO Chuck Bills. “Carnevale is a wonderful way to show that support. Accompanying a Veteran on a flight this year makes it that much more special for me on a personal level. These men and women risked their lives for our country. It is an honor to do something for them.”
“We are proud to join Ohio Logistics and Rowmark as major sponsors for Carnevale 2017,” says Huntington National Bank’s Findlay Community President Daniel Kendrick. “For over 150 years Huntington has been committed to strong community involvement. “Our Veterans deserve our support and respect. This is a great way to show them how much we value their service to our country.”
Gilmore Jasion Mahler, with offices in Maumee and Findlay, established Carnevale in 2016 as a way to give back to the Findlay community. The firm worked with Findlay Mayor Lydia Mihalik to identify organizations in need of funding, and decided Flag City Honor Flight could greatly benefit from the financial support.
“There are so many Veterans left to serve in our area, not only in the Findlay-Hancock County region, but in the Toledo area, across Ohio and beyond,” says Flag City Honor Flight President Bob Weinberg. “We’re so grateful for the support from GJM and these generous sponsors. All Veterans should be allowed the opportunity to see the memorials built in their honor in our nation’s capital. Carnevale will help make that happen.”
“We’re proud of what we accomplished with Carnevale in 2016. Community service is a core value for GJM,” says GJM Managing Partner Kevin Gilmore. “It’s amazing what can happen when a corporate community comes together to support an important cause.”
Last year's event raised over $42,000 for Flag City Honor Flight and helped to fund a second flight in 2017. GJM hopes to raise even more money this year for the nonprofit. The live auction is new this year at the event, and features "experience-focused" packages, including a fly fishing outing, a military experience package and a travel package featuring a 5-day trip to Italy.
Established in 1996, Gilmore Jasion Mahler, LTD is the largest public accounting firm in the region, with offices in Maumee and Findlay. Locally owned, GJM offers comprehensive financial services including assurance, business advisory, tax, risk advisory and healthcare management. GJM’s professionals specialize in industries including construction, real estate, healthcare, manufacturing/distribution and utilities.
Italy Trip Headlines Gilmore Jasion Mahler Findlay Carnevale 2017 Live Auction
Picture yourself strolling through historic and scenic Bologna, Italy… or hunting for truffles in the picturesque Italian countryside… or taking a cooking class in Florence and then feasting on your creations.
Those are just some of the experiences and culinary delights you can enjoy if you have the winning bid at Gilmore Jasion Mahler’s Carnevale live auction this year. The featured Bologna, Italy trip "Italian Culinary Experience for Two" is just one exciting new feature of Carnevale 2017. Also new this year: other unique live auction “experiences”, several Italian carnival-style performers entertaining the guests, and other surprises. 13abc’s Tony Geftos serves as the event emcee and Findlay Chef Sam Fittante graciously returns, offering Italian cuisine.
Carnevale 2017 is November 3rd from 5:30 to 9 pm at the Marathon Center for the Performing Arts in downtown Findlay. All money raised through sponsorships and at the event itself will benefit Flag City Honor Flight. Carnevale 2016 raised over $42,000, helping to fund the nonprofit’s second flight in 2017, which was September 20th, when 80 Veterans and their Guardians traveled to Washington, D.C.
Those attending Carnevale 2017 can expect a lively evening, while knowing they’re helping a good cause. Flag City Honor Flight’s hope is to once again offer two Honor Flights in 2018 and Gilmore Jasion Mahler wants to help make that a reality. Managing Partner Kevin Gilmore says it’s exciting to try to help make that happen.
“Our people in both Findlay and Maumee have worked hard on the event planning all year, but we know the true key to the event’s success is the support of the Findlay-Hancock County community,” he says. “We saw that last year with Carnevale and I’m confident we’ll have that same strong community support at this year’s event.”
Many new sponsors are on board for Carnevale 2017 and many of the generous corporate supporters from 2016 are again supporting the event, including major sponsors Ohio Logistics and Rowmark. New this year as a major sponsor is Huntington National Bank.
“There are so many Veterans left to serve in our area, not only in the Findlay-Hancock County region, but in the Toledo area and across Ohio and beyond,” says Flag City Honor Flight President Bob Weinberg. “All Veterans should be allowed the opportunity to see the memorials built in their honor in our nation’s capital. Carnevale will help make that happen.”
Flag City Honor Flight is a completely volunteer-run 501(c) 3 organization founded in 2010 and operates solely on donations. Their mission is to transport American Veterans to Washington, D.C. to visit the memorials dedicated to honor their service and sacrifices.
Join Gilmore Jasion Mahler and our generous sponsors as we help get our heroes to Washington, D.C. Carnevale 2017 tickets are $60, which includes two drink tickets. To learn more about sponsorship opportunities, call 419-423-4481. You can also find sponsorship information and buy tickets on the Carnevale webpage or visit the GJM Facebook page.
Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers comprehensive financial services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.
GJM’s Bob Bobek Previews This Week’s CFMA 2017 Buckeye Regional Conference
Excitement is building for this week's 2017 Buckeye Regional Conference hosted by CFMA Northwest Ohio.
GJM Economic Outlook Presentation Puts Focus on Manufacturing
Less than a month after President-Elect Donald Trump was sworn in as president, experts will offer their take on the manufacturing climate and outlook for 2017 at Gilmore Jasion Mahler’s Manufacturing & Distribution Financial Executive Roundtables.
The roundtable events are Thursday, February 9 from 11:30 am-1 pm at Findlay Country Club and from 3-5 pm the same day at Brandywine Country Club in Maumee.
“Making America Great Again: The 2017 Manufacturing Outlook” will explore what may be in store for the manufacturing industry in 2017. From the corporate tax rate to trade, to workforce issues, our experts will offer perspective on what may be ahead for this critical piece of our regional economy.
Speaker Kevin Depew is Director of Thought Leadership for RSM US LLP and an Emmy Award-winning writer and producer with a work history that includes market strategy, research and portfolio management. Gilmore Jasion Mahler is an independently owned member of the RSM US Alliance. Depew will be joined by co-presenters offering a closer look at our regional economies. Tim Mayle, recently named the Director of Economic Development for the Findlay-Hancock County Alliance will address the Findlay roundtable event and Dean Monske, President and CEO of the Regional Growth Partnership will present in Maumee.
The events are open to financial executives from area manufacturing & distribution businesses. There is no cost to attend. The Findlay event includes lunch. The Maumee event includes an optional happy hour from 5-6 pm. Manufacturing financial executives can RSVP via email for either roundtable event at firstname.lastname@example.org. Please specify which event you’ll be attending.
Gilmore Jasion Mahler (GJM) established the Manufacturing & Distribution Financial Executive Roundtable series after learning that area manufacturers needed a way to come together to share their challenges and successes. Previous roundtable topics have included mergers & acquisitions, company culture, employee engagement and the state of Ohio manufacturing.
Established in 1996, Gilmore Jasion Mahler, LTD is the largest public accounting firm in the region, with offices in Maumee and Findlay. Locally owned, GJM offers comprehensive financial services including assurance, business advisory, tax, risk advisory and healthcare management. GJM’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.