Accounting Today recently wrote up a good article on the challenges of the new Sec 199A — popularly known as the “20% Pass-Through Deduction”. I encourage giving it a read. I think the best takeaway for accountants and others running personal service companies comes from the last paragraph:

“Most accountants that are in a flow-through entity should probably continue that way,” Wheelwright said. “I don’t know any accounting professionals that leave money in the business, and if you’re going to take money out, it doesn’t make sense to be a C corporation,” he said. “Where being a C corporation does make sense is if you’re going to reinvest a large portion of the profits back into the business. Because of the double tax related to C corporations [the corporate tax plus the tax on dividends], most pass-throughs will want to continue to be pass-through entities.”

-Tom Wheelwright, Founder and CEO of ProVision

In a related article, Accounting Today reports:

“The National Society of Accountants wants the Internal Revenue Service to provide a six-month extension for businesses to make an election to be treated as S corporations for this year, arguing the current deadline of March 15 is just not enough time to make a decision given the uncertainty surrounding the new tax law.”

“By allowing a six month extension to Sept. 15, 2018, for a corporation to make an election to be treated as an S corporation for the current calendar year would afford time for all affected parties, as well as their tax adviser, to read and understand any such regulations and how they may impact their tax liabilities.”

-John Ams, NSA Executive Director