On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA). On 20 December 2017, both the US Senate and the House of Representatives approved the passing of the Tax Cuts and Jobs Act with some minor changes to comply with the Senate budget rules. The main changes include the following:
- A reduction in the corporate tax rate to 21% for taxable years beginning after 31 December 2017.
- The elimination of the corporate alternative minimum tax (AMT).
- A 100% deduction for the cost of investments in qualified property acquired after 27 September 2017, to be phased out beginning in 2023.
- An expansion of section 179 expensing for small businesses to USD 1 million and an increase in the phase-out threshold amount to USD 2.5 million.
- An expansion of the option to use the cash method of accounting, including an increase in the gross receipts test to USD 25 million in the three prior years.
- A limitation on business interest deductions equal to 30% of adjusted taxable income, including deductions for depreciation, amortization, and depletion, with the disallowed interest expense carried forward indefinitely.
- The repeal of the deduction for income attributable to domestic production activities under section 199.
- The amortization rules for research and experimental expenditures are amended so that specified domestic expenditures must be capitalized and amortized ratably over a five-year period, while specified expenditures attributable to research that is conducted outside of the United States must be capitalized and amortized ratably over a 15-year period.
