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#118 Tax Cuts and Jobs Act: Sunset in 2025 and Its Impact on Construction Services
Aug 13, 2024
Join construction financial expert Todd Feuerman and tax specialist Travis Klein from Ellin & Tucker as they delve into the looming expiration of the Tax Cuts and Jobs Act in 2025. They explore the potential aftermath for the construction sector, including impacts on sureties and lenders. The duo emphasizes the urgency of proactive tax planning and outlines strategies for succession planning and ownership transitions. They also discuss the importance of assembling a trusted advisory team to navigate these upcoming changes successfully.
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Quick takeaways
- The impending sunset of the TCJA necessitates urgent tax planning for construction businesses to navigate its potential impacts and challenges.
- Expanding the small business revenue threshold enhances opportunities for contractors to leverage beneficial accounting methods, improving cash flow management.
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Impact of the Tax Cuts and Jobs Act
The Tax Cuts and Jobs Act, enacted in December 2017, significantly reduced corporate tax rates from 35% to 21% to stimulate economic growth. However, while corporate tax cuts were made permanent, the individual and pass-through tax cuts were designed to be temporary, set to expire at the end of 2025. This impending sunset necessitates urgent planning for CPA firms and their clients, especially those in the construction sector, as they have only 12 to 18 months to assess the implications of these changes. Key provisions related to depreciation and tax deductions affecting cash flow highlight the potential challenges businesses may face if these critical tax benefits are not extended.
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