Alabama Construction News

JUL-SEP 2018

Alabama Construction News is the states only bimonthly magazine dedicated to the commercial construction industry.

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Page 45 of 67

STUDIES HAVE FORECAST THAT THE NEW TAX CODES will cause federal revenues to decrease by $205 billion in 2018 and $323 billion in 2019. But the nation's GDP is expected to increase over the next few years by 0.25 to 1.5 percentage points. 1 The TCJA's changes can affect how contractors do business, so contractors should be proactive when it comes to understanding and planning for these changes. How will this new legislation affect contractors? Following are a few areas in which tax reform could have the greatest impact: CAPITAL EXPENDITURES AND ACCELERATED DEPRECIATION The TCJA expanded the ability to expense capital expenditures. Previously, taxpayers were allowed to expense 50 percent of qualifying assets when placed in service. The TCJA increased bonus depreciation amounts to 100 percent. In addition, the TCJA expanded the definition of qualifying assets to include certain used assets, whereas previously the original use of an asset had to begin with the taxpayer claiming the bonus depreciation. W I L L A F F E C T CO N T R AC TO R S The Tax Cuts and Jobs Act (TCJA) that was passed late last year is a major overhaul of the country's tax code, and the stated overall goal is straightforward: cut taxes on individuals and businesses, thereby stimulating the economy and creating jobs. TOM WRIGHT, PARTNER, RSM US LLP 44 AL CONSTRUCTION NEWS JUL–SEP 2018

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