Most political observers agree the new administration will bring changes to the tax code. What those changes will be and how soon they arrive are the question. On average, experts say, it takes a year and a half for new tax law, which means no major changes until 2022 at the earliest. But there are some ways the tax code could change more quickly. Regardless of the timeline, HVAC contractors need to start thinking about all the ways taxes can impact their business and their personal finances.
The latest major overhaul of the tax code was the Tax Cuts and Jobs Act of 2017. It was a fairly major overhaul, especially in regard to business taxes. It especially benefitted pass-through entities, which includes a majority of small businesses, such as HVAC contractors. Qualifying pass-through business owners have been able to deduct a portion of their net business income from their personal income taxes, reducing the rate.