Impact of Tax Reform on the Entertainment Industry: What You Need to Know

The tax reform passed in 2017 had a significant impact on the entertainment industry. There were several changes to tax laws that affect both individuals and businesses in the industry. In this article, we’ll explore the key changes brought about by tax reform and how they impact the entertainment industry.

• Changes to Business Deductions:

  One of the most significant changes brought about by tax reform was the limitation of business deductions. Previously, businesses in the entertainment industry could deduct expenses such as meals and entertainment expenses. However, under the new law, these expenses are no longer deductible.

• Changes to Depreciation:

  Tax reform also brought about changes to depreciation rules. Businesses in the entertainment industry can now take advantage of bonus depreciation, which allows them to write off the cost of equipment and other assets in the year they are purchased. This can help businesses save money on their taxes.

• Changes to Individual Tax Rates:

  Tax reform also brought about changes to individual tax rates. While the highest tax rate remained the same, there were changes to the tax brackets and the amount of income taxed at each rate. This can impact high-income earners in the entertainment industry.

• Changes to State and Local Tax Deductions:

  Another change brought about by tax reform was the limitation on state and local tax deductions. Previously, individuals could deduct these taxes from their federal taxes, but now there is a cap on the amount that can be deducted. This can impact high-income earners in high-tax states like California.

• Changes to International Taxation:

  Tax reform also brought about changes to international taxation. Businesses in the entertainment industry with operations overseas may be impacted by changes to repatriation and the tax treatment of foreign income.

As a tax advisor for the entertainment industry, it’s important to stay up-to-date on tax laws and changes like tax reform. By understanding the impact of tax reform on the entertainment industry, you can help your clients navigate these changes and make informed decisions to minimize their tax liability. Be sure to work with a qualified tax professional to ensure compliance with all applicable laws and regulations.

In conclusion, tax reform has had a significant impact on the entertainment industry. Changes to business deductions, depreciation, individual tax rates, state and local tax deductions, and international taxation all impact businesses and individuals in the industry. By staying informed and working with a tax professional, you can navigate these changes and make the most of the opportunities available to you under the new tax laws.