Federal Tax Cuts and Jobs Act for Banks

The Tax Cuts and Jobs Act (the “Tax Act”) contains significant changes affecting banks. This webinar discusses those changes and how they will impact your bank. The changes covered include:

Changes Affecting All Banks

1. Meals and entertainment expenses – Elimination of deduction for entertainment expenses
2. Depreciation and expensing of fixed assets – 100% write-off of many fixed asset additions
3. Rate changes – Effect on tax-exempt investments
4. Moving expenses – Elimination of moving expense deduction
5. Changes in tax credits

Changes Affecting S-Corporation Banks Specifically

1. Individual tax rate changes
2. 20% deduction on pass-through income
3. S versus C – Choice of entity
4. Individual tax changes affecting shareholder reporting
5. Effect of changes on shareholder agreements

Changes Affecting C-Corporation Banks Specifically

1. Lower tax rates – Blended rates for fiscal year banks
2. Net operating loss carrybacks eliminated; carryforwards limited to 80% of taxable income
3. Repeal of Alternative Minimum Tax
4. Dividends received deduction changes
5. Cash basis reporting for tax
6. Income tax accounting and reporting considerations

Tax Act Impact – Customer-Related Changes

1. Mortgage interest
   1. Existing mortgages grandfathered
   2. Generally deductible on new loans up to $750k
   3. Limited to two qualified residences
2. Home equity interest – No deduction for home equity interest
3. Limitations on business interest expense deductions