The Tax Cuts and Jobs Act (the “Tax Act”) contains significant changes affecting banks. This webinar discusses those changes and how they will impact your bank. The changes covered include:
Changes Affecting All Banks
- Meals and entertainment expenses – Elimination of deduction for entertainment expenses
- Depreciation and expensing of fixed assets – 100% write-off of many fixed asset additions
- Rate changes – Effect on tax-exempt investments
- Moving expenses – Elimination of moving expense deduction
- Changes in tax credits
Changes Affecting S-Corporation Banks Specifically
- Individual tax rate changes
- 20% deduction on pass-through income
- S versus C – Choice of entity
- Individual tax changes affecting shareholder reporting
- Effect of changes on shareholder agreements
Changes Affecting C-Corporation Banks Specifically
- Lower tax rates – Blended rates for fiscal year banks
- Net operating loss carrybacks eliminated; carryforwards limited to 80% of taxable income
- Repeal of Alternative Minimum Tax
- Dividends received deduction changes
- Cash basis reporting for tax
- Income tax accounting and reporting considerations
Tax Act Impact – Customer-Related Changes
- Mortgage interest
- Existing mortgages grandfathered
- Generally deductible on new loans up to $750k
- Limited to two qualified residences
- Home equity interest – No deduction for home equity interest
- Limitations on business interest expense deductions