1. Corporate Tax (C-corps)
Previously, income was taxed on a graduated basis with income over $10M at a rate of 35%. The overhaul revises this to a flat tax rate of 21%. Corporate AMT was also repealed.
2. Accounting Method
The cash method of accounting has been expanded to include taxpayers with gross receipts averaging less than $25M in the 3 prior tax years. This includes farming C corps. Entities that meet the $25M threshold will also not be required to account for inventories under section 471.
3. Expenses and Deductions
Disallowed deductions going forward include: expenses related to activities of entertainment or recreation, membership dues for clubs that are generally designed for business, pleasure, recreation, or another social purpose.
