CHICAGO, Nov. 2, 2016 /PRNewswire/ -- To help businesses and individuals determine the best tax strategies available, Crowe Horwath LLP has issued " Tax planning: 2016 year-end guide." Crowe is one of the largest public accounting, consulting and technology firms in the U.S.
Last December, the Protecting Americans From Tax Hikes Act of 2015 (the PATH Act) was signed into law, which permanently extended many tax relief provisions and incentives and extended others beyond 2017 for both businesses and individuals. As a result, there is less uncertainty this year, allowing taxpayers the advantage to act now and mitigate their tax burden. According to Gary Fox, managing partner of Crowe Tax Services, even following the PATH Act, much ambiguity remains. "The biggest driver of uncertainty for the tax planning process is the election. In a general sense, Hillary Clinton has proposed tax increases and Donald Trump has proposed decreases. Whoever wins will need to work with Congress to establish long-term tax reform, and it will likely be a long time before we know what that looks like," he said. The PATH Act permanently extended the research credit, which gives businesses a tax incentive to conduct research and development (R&D) activities. "The R&D credit used to expire annually and Congress often didn't extend it until very late in the calendar year, creating a lot of uncertainty for businesses. Now, businesses can plan to conduct R&D activities throughout the year, knowing that the tax benefit to doing so remains," Fox said. Additionally, businesses with $50 million or less in gross receipts can now claim the credit against alternative minimum tax (AMT) liability. Certain startups (generally those with less than $5 million in gross receipts) that haven't incurred an income tax liability can use the credit against their payroll tax.