20 THE QUEENS COURIER • SEPTEMBER 14, 2017 FOR BREAKING NEWS VISIT WWW.QNS.COM
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Salvatore P. Candela, EA, ATA, ABA
Enrolled Agent - Tax Advisor
Talk of Tax Reform
BY JOHN SAVIGNANO, CPA
It’s seven months into President Trump’s
term and talk of tax reform is heating up
again. Will comprehensive tax reform be
enacted? Don’t rule it out. Congressional
GOP leaders and White House officials
are holding regular meetings to discuss
facets of a major overhaul of the tax system.
They will unveil a detailed plan after
the August recess. During their time at
home, Republican lawmakers hope to
drum up support from their constituents.
Business groups are using a full-court
press to urge Congress to get it done.
But there are lots of obstacles in the
way. The House must pass a budget for
2018 by end of September. That’s because
the budget resolution will be the vehicle
by which law-makers can use so-called
reconciliation rules to allow a simple
majority of senators to approve a tax
reform plan. Without this procedural
maneuvering a 60-vote minimum vote is
needed in the upper chamber, and that’s
not going to happen. It’s hard to see any
Senate Democrats going along with a tax
reform proposal endorsed by President
Trump, especially when they’re not given
a seat at the table.
Congress’s inability to handle
Obamacare repeal will hinder tax reform,
as these two Republican legislative priorities
are intertwined. Because budget
cuts tied up in the health debate would
have greased the skids for lower rates for
taxes, enacting health reform first would
have helped efforts on comprehensive tax
overhaul. Also, some Obamacare taxes
on upper income individuals…such as a
3.8% surtax on net investment income…
will now have to be dealt with in the tax
reform package.
Republican lawmakers will have to
smooth out their policy differences. In
light of the Obamacare repeal saga, we
do not foresee a seamless process to tax
reform. For months, there’s been vigorous
debate on a wide array of issues, such
as how deficit-neutral reform should be
and the now-dead border adjustability
tax. With no support from Democrats,
congressional GOPers need to present a
united front.
Lobbyists and others will push back on
tax breaks threatened by the plan. They’ve
been gearing up for months to fight hard
for deductions and other breaks that
could be in jeopardy to achieve the goals
of lower tax rates and tax simplification.
They are already starting to give lawmakers
an earful. After Orrin Hatch, chairman
of the Senate Finance Committee,
put out a call for public feedback on tax
reform, he got hundreds of thousands of
submissions offering a wide variety of
proposals.
At the end of the day, we don’t expect to
see major tax changes this year. Odds of
enactment are a bit better in 2018, maybe
by late winter or spring. If efforts at comprehensive
tax reform fail, the fallback is
short-term tax cuts. The Treasury secretary
has noted that temporary tax cuts
are better than nothing.
Avoid Business Failure
Take the time to layout a sound financial
plan and you will increase the odds of
success for your business.
The beginning of your business venture
is not a time to spend money frivolously.
You need to cut costs upfront while
your business is getting off the ground.
Think of spending in terms of investment.
Before making purchases think
about return on investment. Avoid giving
up equity and make sure to protect
your assets. Invest in a good accounting
system and keep a strict budget to make
sure you don’t overspend. Accounting
software lets you analyze and determine
where you may need to cut.
Need more money? To get a loan, you
need a good credit rating and the bank
has to be willing to lend you funds. Look
for a time when the market is up. Then
banks are more willing to offer additional
funding options. However, always be
prepared for hard times. Set aside money
from business profits for emergencies.
Business is unpredictable and you need
to be ready if something goes wrong.
Think about if your business stops making
money and how long you can survive.
John Savignano is a partner with
Savignano Accountants & Advisors
located at 47-46 Vernon Blvd., Second
Floor, in Long Island City. If you have
any questions or require additional
information, please call John at 718-
707-0955.
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