On Dec. 22, 2017, President Donald Trump signed into law sweeping changes to the U.S. tax code.
Impact on IAs
The centerpiece of this law is a reduction of the corporate tax rate from 35 to 21 percent. This is a significant tax reform that will have a positive impact on many independent agencies.
The law also changes tax rates for individuals and creates a special deduction for small businesses (including insurance agencies).
While OIA focuses on state issues pertinent to Ohio’s independent agents and consumers, your national associations advocate before Congress and the Trump administration. The Independent Insurance Agents & Brokers of America (Big “I”) focuses on national issues such as changes to the federal tax code.
Keep in mind that the tax changes will impact you differently depending on whether you’re organized as a C corporation or a business entity such as a subchapter S corporation, partnership or sole proprietorship.
The Times, They Are A-Changin’
This law is the biggest tax overhaul in 30 years (since former President Ronald Reagan’s Tax Reform Act of 1986). How the law is being implemented, including how the Internal Revenue Service (IRS) will interpret certain provisions, remains to be seen.
In 2018 and beyond, the IRS will issue detailed regulations and guidance that will impact tax planning for independent agents moving forward.
For more information and exclusive resources about the new tax changes, visit the Big “I” member page.