Breaking down tax reform for energy companies

The 2017 Tax Cuts and Jobs Act (TCJA) is the biggest change to tax laws in more than 30 years. Under the TCJA, oil and gas companies can expect substantial tax law adjustments. Depending on your company’s entity type (C corporation, partnership, S corporation or sole proprietorship), you may be able to take advantage of new tax breaks.

The TCJA has generally lowered income tax rates for individuals, but it has also significantly reduced the income tax rate for corporations and eliminated the corporate alternative minimum tax (AMT). In addition, it also provides a large new tax deduction for most owners of pass-through entities and significantly increases individual AMT and estate tax exemptions. There is an obvious downside, though: the TCJA eliminates or limits many existing tax breaks, and much of the relief it offers is only temporary.

You can expect the new tax laws to have a major effect on your business. Do you understand how these tax reform changes will impact the oil and gas industry and your business specifically?

• Reduced corporate income tax rate.
• Business pass-through tax deduction.
• 100% tangible property expensing.
• Limitations on net operating losses.
• Limitation on deduction of net interest expense.
• Repeal of Domestic Production Activities Deduction (DPAD).

A tax professional with specific experience in the energy industry can help you answer these questions and plan strategically to make the most of TCJA changes.

Learn more about Weaver’s services for energy companies.

Weaver is a top-40 national accounting firm built on an unwavering commitment to its clients’ success, acting with integrity and always striving to transcend expectations. Beyond assurance and tax services, Weaver offers risk, transaction and IT advisory; energy compliance; forensics and litigation; and SALT, international and private client tax services.