Hartford Business Journal

www.HartfordBusiness.com • January 15, 2018 • Hartford Business Journal 15 Nearly 500 women and men came together at The Village's 17th annual Girl Within Luncheon on Dec. 1 at the Connecticut Convention Center, raising over $170,000 to support programs for at-risk girls and young women in the Greater Hartford area. Shown above (from left to right) are: Galo Rodriguez, president and CEO of The Village for Families & Children; Alana Farnsworth, guest speaker; Jeanmarie Cooper, member of The Village's board and event chair; Regina Louise, author and keynote speaker; Irene O'Connor, anchor of Eyewitness News This Morning on WFSB-TV, Ch. 3 and event emcee; Francine Christiansen, 2017 Woman of the Year; and Sarah Morin from The Hartford, presenting sponsor. American Eagle Financial Credit Union recently donated $5,000 to the Community Renewal Team of Hartford and Middlesex counties to help veterans in the local area. Members of American Eagle FCU were encouraged to use their debit cards on Veteran's Day with 10 cents on every purchase made donated to CRT. The Hartford Foundation for Public Giving awarded a two-year, $440,000 grant to the Hartford Neighborhood Development Support Collaborative to help its mission to revitalize the community for Hartford residents. The Hartford Neighborhood Development Support Collaborative provides operating support for the Community Development Corp. and Northside Institutions Neighborhood Alliance, which work in the Asylum Hill neighborhood to rehabilitate properties and create affordable housing. Nonprofit Notebook NONPROFIT PROFILE Connecticut Public Broadcasting Inc. 1049 Asylum Ave., Hartford | cpbn.org Mission: To provide a powerful voice for Connecticut's diverse communities through the creation of multimedia programs, initiatives and outreach programs that foster collaboration, inspire understanding, educate and effect change. Top Executive: Jerry Franklin, President/CEO Services: A locally owned media organization that produces TV, radio, print and internet content including news and public affiars coverage and entertainment. FY 2016 Summary 2015 2016 Total Employees 105 151 Total Assets $54,573,575 $41,256,013 Total Liabilities $22,604,113 $21,582,706 REVENUES Contributions & Grants $7,951,129 $9,285,119 Program Service Revenue $8,290,960 $7,003,677 Investment Income $2,781,817 $2,066,697 Other $2,320,837 $1,716,384 Total $21,344,743 $20,071,877 EXPENSES Grants $0 $0 Member Benefits $0 $0 Salaries/Employee Benefits $7,219,569 $8,750,803 Fundraising Fees $412,936 $473,798 Other $11,938,146 $12,040,769 Total $19,570,651 $21,265,370 Margin $1,774,092 $(1,193,493) TOP PAID EXECUTIVES (FY 2016) Base salary Comp. & Benef. Jerry Franklin, President/CEO $367,758 $410,112 Dean Orton, COO $255,852 $280,449 Meg Sakellandes, Treasurer/CFO $190,313 $218,406 Source: Guidestar IRS 990 Tax Form EXPERTS CORNER How federal tax reform will impact your business By Brian Newman O n Dec. 22, President Trump signed into law the Tax Cuts and Jobs Act (the Act), which makes significant changes to the tax law pertaining to both businesses and individuals. It would be impossible to cover all the provisions contained in the new law, so this article will outline what is most important to individuals and business owners in Connecticut. Since these tax law changes are compli- cated and can have different consequences for each taxpayer, you should meet with your tax advisor to determine how these changes will affect you. Individual provisions The standard deduction is increasing to $24,000 from $12,700 for married couples filing jointly, and from $6,350 to $12,700 for single taxpayers. The individual rates and brackets have been revised, and overall rates are generally lowered, with the top rate dropping from 39.6 percent to 37 percent. These tax cuts are scheduled to expire after 2025. There is no change to the preferential long-term capital gains tax rate. The new law limits an indi- vidual's itemized deduction for state and local taxes to $10,000 in 2018. For many individuals, this limitation could significantly increase their federal income tax liability; for others, it may have limited impact if they were subject to the alterna- tive minimum tax (AMT) whereby they were not receiving a benefit of state tax deductions anyway. Mortgage interest deductions for new pur- chases of first or second homes will be capped at $750,000 in mortgage debt for mortgages incurred after Dec. 15, 2017. There are no changes for current mortgages in place under prior rules. However, home equity loan interest will no longer be deductible, even for existing debt. The individual al- ternative minimum tax exemption has increased and, coupled with the limitation of state tax deductions, likely reduces the number of taxpay- ers subject to AMT. For eligible taxpayers, the child tax cred- it is increased from $1,000 to $2,000, and a $500 credit is provided for certain non- child dependents. Distributions from 529 Plans can be used to fund tuition and various expenses at elementary, secondary and religious schools. Historically, distributions were limited to postsecondary education. Business provisions Pass-through businesses, such as S corporations, LLCs, partnerships, and sole proprietors, will receive a 20 percent deduction equal to 20 percent of "quali- fied business income." However, there are several limitations, including a limitation based on W-2 wages and assets relative to the qualified business. This benefit will be phased out for profes- sional service businesses owned by individu- als with taxable income of more than $157,500 (single filers) or $315,000 (joint filers). The tax rate for C corporations is now 21 percent (down from 35 percent) effective Jan. 1, 2018. Additionally, the corporate AMT has been repealed. Taxpayers can now, subject to certain limitations, deduct 100 percent of the costs of certain assets acquired to be used in a trade or business. This 100 percent deduc- tion or "bonus depreciation" would apply to qualified property placed in service on or after Sept. 28, 2017. Qualified property is expanded to include used property. For 2018, the maximum Section 179 deduc- tion, which allows you to deduct certain de- preciable assets, is increased from $500,000 to $1 million. There is a phase-out of such deduction for assets placed in service during the year, from $2 million to $2.5 million. Qualified property will now also include qualified improvement property and im- provements to non-residential rental prop- erty placed in service after the property was first placed in service, such as roofs, HVAC, fire protection and alarm systems. The limitations relating to the use of the cash method of accounting have been modi- fied so that taxpayers with annual average gross receipts under $25 million (historically under $5 million) — known as small taxpay- ers — will be permitted to use the cash method of accounting. Small taxpayers will no longer be required to account for inven- tory. Also, small taxpayers utilizing long- term contract accounting methods would no longer be required to use the percentage of completion method of accounting. Other changes Research and development costs must be capitalized and amortized over five years. Interest expense is limited to business interest income, plus 30 percent of "adjusted taxable income." The new law contains nu- merous exceptions to this rule, as well as special rules relat- ing to flow-through entities. Net operating loss (NOL) usage will be limited to 80 percent of taxable income. The law also elimi - nates the two-year carryback, but increases the NOL carryfor- ward from 20 years to until the NOL is used. Additionally, for individuals, business losses can now only be used to offset business in- come plus $250,000 for single taxpayers and $500,000 for married couples filing jointly. In addition, most entertainment expenses will no longer be deductible. Business meals would still be deductible subject to the exist- ing rules (50 percent limitation). Brian Newman is a CPA and tax partner at accounting-consulting firm CohnReznick. Brian Newman Since these tax law changes are complicated and can have different consequences for each taxpayer, you should meet with your tax advisor to determine how these changes will affect you.

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