Some people believe that the Tax Cuts and Jobs Act of 2017 (TCJA) was the biggest tax reform since 1986. Big is a subjective term, but I can confidently assert that the TCJA is a more difficult tax reform to implement than the 1986 Tax Reform Act (TRA).

TRA was passed in October 1986 and wasn’t generally effective until the first transition year in 1987. Many of its provisions had been discussed and debated in 1984 and 1985. It was a bipartisan effort and was subjected to committee hearings and debates. We didn’t have the benefit of hearings and debates for the TCJA. Enacted on December 22, 2017, it was effective nine days later. And for the first time since the 1940s, we needed to quickly figure out whether rental real estate qualifies as a trade or a business.

We all made it through the first tax season of the TCJA, but it was not easy. The uncertainty of provisions made it difficult to answer questions such as:

• What is a trade or business for the deduction for qualified business income (QBI)?
• Is a trade or business good or bad when it comes to the business interest expense limitation?
• Are rentals a trade or business?
• Can non-business rentals generate or enhance a QBI deduction?

The Tax Advisors Update is coming to Washington in January 2020, and whether you attend in person or virtually, you will come away with a better understanding of the TCJA and the additional guidance we have received since last year. Among the many complex issues, we’ll discuss:

• Determining if a business is a specified service trade or business (SSTB)
• Reporting information needed on Schedules K-1 for qualified business income (QBI)
• Determining if a small business taxpayer is exempt from the Sec. 163(j) business interest expense limitations
• Considering aggregation that may make a business ineligible for small business taxpayer treatment
• Changes to the partnership Schedule K-1

And the TCJA guidance isn’t the only information CPAs need to understand. The courts continue to rule on tax matters, and the IRS has continued to issue new revenue rulings, procedures, and notices.

I’m in favor of simplicity, and we can all agree that the tax law is anything but simple. Tax returns have become simpler for some taxpayers, but not necessarily for the taxpayers who need the expertise of CPAs.

On top of rushing to meet deadlines and handling the complexity of tax laws, we can make mistakes when overloaded with work. Just as a construction worker must wear a safety harness, we must follow best practices for preparation and review. Consider the Tax Advisors Update a safety harness as you prepare for the 2019 tax return season. Learn more about the issues that the AICPA Tax Executive Committee has addressed in its comment letters over the last two years. Staying connected to other professionals is an important tool to keep you and your clients hooked in to the tax issues that just keep continuing to evolve.

Chris Hesse, CPA, is a principal in the National Tax Office of CLA (CliftonLarsonAllen LLP). He is the Chair of the AICPA Tax Executive Committee and resides in TriCities, Washington.

Join Chris for the Tax Advisors Update, January 22 in Spokane or January 23 in Bellevue or via Webcast. Learn more here.