United States Congress has passed the Tax Cuts and Jobs Act and sent it to the President for his signature. The Act dramatically reduces the corporate income tax rate to 21%, transitions the US to a territorial tax system, provides for a one-time repatriation of foreign earnings and makes extensive changes to individual taxation rules. Most individual changes will expire after 2025.
While the Act will simplify taxes for many Americans, most businesses operating in the US will find the computation of taxable income even more complex than in the past. Limitations on the deductibility of business interest, special deductions for businesses conducted via pass-through entities and changes to the rules on expensing and depreciating asset purchases will each complicate this process.
For more details, Baker Tilly in the US provides a high-level outline of the major domestic provisions included in the Act.