The President of the United States signed the Tax Cuts and Jobs Act into law on December 22, 2017. Read the article sent to HPG clients and friends here http://bza.me/?FJWP9L. Future Firm newsletters will deal with planning opportunities arising from this tax reform. This edition will focus on some immediate planning concerns.
Medical Device Tax Suspended
The 2.3% medical device excise tax was originally suspended through December 31, 2017. On Monday, January 22, 2018, President Trump signed H.R. 195 which included an extension of the suspension through December 31, 2019. Additional information can be found here.
Stock Option Reporting
January 31 is also the deadline for companies to report 2017 information to current and former employees who exercised incentive stock options using Form 3921 or purchased employee stock purchase plan shares using Form 3922. The company must then also report this information to the IRS by their respective reporting deadlines. Here is additional information. https://www.irs.gov/pub/irs-pdf/i3921.pdf
Tax Provision Impact
One immediate concern related to the tax reform is how it affects financial accounting and disclosures for income taxes under generally accepted accounting principles (ASC 740). The new law is incredibly complex and institutes new tax regimes such as a tax liability on deemed repatriation on offshore earnings, among many other issues. Due to the timing of the new law and complexity of this hybrid-type territorial system, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) 118 to provide guidance that allows public companies that need additional time to fully analyze the new law to calculate provisional amounts using reasonable estimates and to revise these estimates during the year if necessary without restating until the company can calculate the final amounts. The Financial Accounting Standards Board issued guidance that private companies can also follow SAB 118. The HPG outsourced tax and provisions team is available to assist. Here is the SEC bulletin. https://www.sec.gov/interps/account/staff-accounting-bulletin-118.htm
County Property Tax Listing
Business personal property that is owned as of December 31, must generally be listed with the county where the property is located on a tax listing form in each county. The form is generally due as of January 31. Motor vehicles generally do not need to be listed as long as they are properly licensed.
The next edition of the HPG Tech Talk newsletter will focus on the new federal research and development tax credit safe harbor rules and the opportunity it brings. We proudly sponsor American Underground and HQ Raleigh. Please let me know if you would like to schedule a time to talk about your milestones and see if the HPG startup packages might be a fit for you and your team.
Technology Practice Leader