Kitchen & Bath Design News

FEB 2019

Kitchen & Bath Design News is the industry's leading business, design and product resource for the kitchen and bath trade.

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Page 45 of 103

"IN THIS WORLD nothing can be said to be certain, except death and taxes," observed Ben Franklin. Since you're happily alive to read this month's Trend Spotting, let's talk tax trends. Must we? No, but the Tax Cuts and Jobs Act (TCJA) passed in December 2017 can – and almost certainly will – impact your bottom line, so we probably should. Chances are, you have all of your paperwork on hand already and are working on your 2018 returns this month (unless you're a fly by the seat of your pants/no deductions/let's do it on April 15th type; in that case, you can skip to the next article). TAX CHANGES So how will the TCJA impact your taxes? That depends on a number of factors, including whether you're a business owner or employ- ee, but it will affect every American taxpay- er. "This is the largest federal tax overhaul since the Tax Act of 1986, or 31 years," ob- serves certified public accountant Bryan Eto, construction industry practice leader with Tucson, AZ-based certified public accounting firm BeachFleischman. "Under the TCJA, C-corporations are now taxed at a flat 21 per- cent instead of the graduated corporate rates of 15 percent to 35 percent." That means your taxes will probably go down, unless you were at the lower end of the range, perhaps for a start-up business or sabbatical. "Income from flow-through entities may qualify for up to a 20 percent qualified busi- ness income (QBI) deduction." So what's a flow-through entity, you might be wondering – or, more precisely, is my company getting a flow-through bene- fit? Here's Eto's description: "Flow-through entities include sole proprietorships, partner- ships, S-Corporations and Limited Liability Companies when taxed as a partnership. Owners of flow-through construction com- panies and suppliers should benefit from the deduction. Architectural and engineering firms should also benefit, as there is a special exception for them to be NOT classified as a Service Trade or Business." And what is QBI? Tax Trends to Watch for 2019 BY JAMIE GOLD, CKD, CAPS, MCTWC Smart design professionals call on tax professionals the same way they would call on plumbers, electricians, technology integrators or other experts in their field to tap into the tax trends that best fit their business and life needs. Let designers design and accountants do taxes, suggests firm owner Dotolo. Beth Dotolo's firm designs bathrooms from studios across three states. Photo: Courtesy of Pulp Design Studios/Photographer: Stephen Karlisch Photo: Courtesy of Pulp Design Studios/Photographer: Stephen Karlisch Photo: Courtesy of Pulp Design Studios/Photographer: Stephen Karlisch Keeping up with design trends leaves little time for following tax trends. 46 Kitchen & Bath Design News • February 2019 TREND SPOTTING

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