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Deferred Income Taxes And The Tax Cuts And Jobs Act

The Tax Cuts and Jobs Act (TCJA) is hot off the presses and contains many provisions which will impact taxpayers in 2018. In addition, the change in corporate tax rates could also impact many regular (or “C”) corporations immediately.

Regular corporations recognize deferred tax assets and liabilities related to temporary differences between book and tax income. These deferred tax assets and liabilities are calculated using an effective tax rate at which these temporary differences are expected to reverse. The TCJA may cause a significant adjustment to deferred tax assets and liabilities resulting in an unexpected impact on 2017 earnings for regular corporations.

A recent Forbes’ article estimated that S&P 100 companies could see as much as a $120 billion net positive earnings’ impact from this change. This impact reflects companies with a positive impact of $200 billion, offset by companies with a negative impact of $80 billion.

Put simply, regular corporations with a net deferred tax asset could expect to see a charge against earnings based on the TCJA, and those with a net deferred tax liability could expect to see a benefit to earnings. Regular corporations should consult with their applicable Blue & Co. tax advisor for more information on this impact.

 

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Understanding the Employee Retention Credit (ERC)

Webinar: Understanding the Employee Retention Credit (ERC): What You Need To Know

You’re Invited! Join Blue & Co. on Wednesday, March 3 from 12:00 p.m. to 1:00 p.m. EST for a webinar entitled Understanding the Employee Retention Credit (ERC): What You Need To Know. In this session, you will learn more about the expansion of the Employee Retention Credit (ERC). The panelists will discuss: Explanation of the […]

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estate planning

Estate Planning 101 for Dental Practices in 2021

By Jessica Hidalgo, CPA Tax Manager, Blue & Co., LLC A new year is upon us and as you plan out your goals for 2021, don’t forget about estate planning. A well-drafted estate plan is essential to ensure your assets are transferred according to your wishes. Whether you need to review an existing plan or […]

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