New Jersey manufacturers heard about how to make tax reform work in their favor during the New Jersey Manufacturing Extension Program’s Manufacturing Day, Friday at the Marigold in Somerset.
Douglas Finkle of CohnReznick presented on tax topics and specializes in manufacturing in relation to taxation.
“Tax rates are coming down due to the Tax Cuts and Jobs Act,” Finkle said. “The standard deduction increased from $12,000 to $24,000 for married filing jointly. The Child Tax Credit has doubled.”
Finkle said that state and local deductions are now capped at $10,000 for individuals. This is a major concern in New Jersey because New Jersey has a high cost of living with expensive real estate.
Finkle said the new tax law allows moving expenses to be deducted on an individual tax return. On the other hand, the law removed the two percent miscellaneous expenses from deductions.
“That is why more tax-payers take the standard deduction,” Finkle said.
Al Traverso, a partner at Sax LLP, discussed the entity structure by which the corporate tax rate changed: C-corporations pay 21 percent whereas S-corporations pay 37 percent.
David Poillucci of Withum said manufacturers represent about 16 percent of Section 179 expensing deductions since the year 1958.
Nate Beachum, a senior manager at RSM, focuses on accounting methods and changes in tax law. He said the old federal tax law allowed business entertainment to be deducted at 50 percent. However, the new tax law eliminates the entertainment deduction.