The TCJA’s Reductions of Tax Accounting Compliance Burdens for Small Business Taxpayers

Abstract

The Tax Cut and Jobs Act of 2017 (TCJA), signed by Congress and President Trump in December of 2017, is the most significant piece of tax legislation in over 30 years. Every type of taxpayer subject to U.S. Federal income tax law is affected by the noteworthy changes of this Act. The TCJA includes provisions that make substantial changes in tax accounting methods applicable to small business taxpayers. Small businesses employ 59.9 million people, which accounts for 47.3 percent of all employees in the United States (SBA Office of Advocacy, 2019). This paper offers background information regarding tax accounting methods and specifies how the TJCA impacts tax compliance for small businesses.