Sherry Cracium-Bolin Talks Potential Tax Changes on Carroll County’s Chamber Chat
At the end of 2024, Sherry Cracium-Bolin, CPA, Tax Principal at Brown Plus, joined Mike McMullin, Carroll County Chamber of Commerce President, on his weekly Chamber Chat podcast to discuss 2025 potential tax changes that will impact businesses in Carroll County.
Click on the image below to listen on the Carroll County Chamber of Commerce website or look for the Chamber Chat podcast on all streaming platforms.
Below is a transcript of Sherry’s portion of the interview:
Mike McMullin: So, as is my norm, I bring on one of our members to talk about what’s going on with their business; but, I happen to have a member who’s going to be talking about what’s going on in the US of A and, specifically, regarding taxes, if you have a business. So, I have with me today Sherry Cracium-Bolin, Principal and Shareholder at Brown Plus. Sherry, thanks for being here.
Sherry Cracium-Bolin: Thanks for having me, Mike.
Mike: Sherry, you have been very instrumental with the Chamber. You’ve been on the Board for a long time. You were the actual Treasurer of the Chamber for six years, and now you’re the Treasurer of the Chamber’s Foundation. So, I think I know you real well, and I know you well enough to trust what you have to say regarding taxes.
And I would say this as we start the show: This is not necessarily a commercial to raise any actual money for Brown Plus. So, if you have an accountant and you’re a business, you need to talk to them about what’s coming up in 2025. And if you don’t have one, or you’ve got one that you’re not as happy with as you’d like to be, you could do a lot worse than getting ahold of Brown Plus. These guys are amazing.
So, Sherry, real fast, who are you and who is Brown Plus?
Sherry: So, I’m Sherry Cracium-Bolin, one of the Tax Principals at the Firm, Brown Plus. Prior, you knew us in Westminster a long time ago as Rager Lehman & Houck, RLHCPAs – same Firm.
Mike: You guys have had many names.
Sherry: Yes.
Mike: But always excellent.
Sherry: This was the last one. This is to make it easier for Mike to say. So, Brown Plus; regional CPA Firm; five offices located in Maryland and Pennsylvania; focusing, of course, on the core audit and tax services, but also the “Plus” represents all of our consulting, exit planning… we can do evaluations… we have Brown Plus Transitions as part of our Firm.
Mike: You guys can do audits and things like that too, right?
Sherry: Of course, all the core products of audits and financial statements, nonprofits, businesses.
Mike: So where are you guys located?
Sherry: In Westminster; we’re on Main Street.
Mike: Okay, and what’s your website or phone number? How do people get in touch with you guys?
Sherry: So brownplus.com. That’s probably the easiest way to get in touch with us. All of our office phone numbers are listed on there, and any way to connect with any of our team members, also located on our website.
Mike: And if you didn’t write that down, they’re on our website under “Members,” and you can always call me on my cell phone, (410) 977-3111, and I can connect you with them and specifically with Sherry.
So, let’s talk a little bit about taxes. Taxes change, and a lot of times they change dependent upon who’s in charge of the White House. So, I know we’re going to have a change coming up again; what should people be on the lookout for? I mean, there could be a million things to talk about, but what’s some of the big things that people need to be aware of that may change with the taxes, or that’s going to change?
Sherry: So, overarching, even prior to the election: If you remember back in 2017 when Donald Trump was president the first time and we had a Republican Senate, they passed a law, the Tax Cuts and Jobs Act 2017 (TJCA) – a huge tax law change that went into effect in 2018.
Mike: Which is going to expire soon, right?
Sherry: Yes. So, even before the election, on the horizon, 2025 was a huge tax year where it was going to be a matter of how much fighting are we going to see, right? There are so many different provisions that are expiring at the end of 2025. You’ll notice that things that affect small business – such as the bonus depreciation that has been available for many, many, many years – has been dwindling each year. So, in 2024, you’ll see that at 60% bonus. In 2025, it goes down to 40% bonus, and then it eventually expires completely under that law.
The other thing is we had lower tax brackets. We have a flat corporate tax rate of 21% right now. Now, that was passed under the TCJA, but it was not made to expire. However, under Trump’s campaign promises, he’s looking to reduce that further to maybe 20%; not a huge change, but that’s also on the table, you know? But, under the current law changes, other things that are bigger for small businesses, such as qualified business income deduction – that is a pretty huge tax rate for our small businesses who are pass-through entities.
Mike: So they can write off other taxes?
Sherry: Yes, it’s about 20% of their net income that’s a deduction.
Mike: Okay.
Sherry: There’s a couple of, you know, limitations and things like that, subject to some things, but that expires at the end of 2025 if nothing else is done. Right?
Mike: So, what do you think the odds are, since Trump’s going to be in there and he’s going to control the House and the Senate, that that may kind of… I mean, I’m not asking you to predict it, but—jokingly—I’m asking you to predict it.
Sherry: They’re going to be having a fight about so many things. What I’m seeing right now is there’s a lot of bipartisan support for extending – it’s a matter of how they do it and they need to agree amongst each other as to the various different provisions. Because, like I said, there’s so many different provisions that are expiring; that’s one of them.
Another large one that impacts our small businesses is R&D, research and development. So, part of the revenue raisers in the act that was passed, the same act, went into effect not until 2022. So, our small businesses that are normally doing a ton of research and development software – engineering firms, that type of thing, really just about any type of firm that does any kind of R&D – in the past, they’ve always been able to deduct those upfront. There’s also credits available.
Mike: Okay.
Sherry: Right? Those credits are still available. However, one of the revenue raisers was that we’re no longer allowed to deduct those expenses the year you expend them. We have to capitalize and amortize those expenses. So, a lot of firms that normally would have expensed those items had a large write off for that, incentivizing them further with credit.
Mike: Sure.
Sherry: Now they have to amortize these expenses over a number of years, and that’s right out of pocket that you’re not deducted.
Mike: If there was ever an actual reason why a small business owner needs to have an accountant to understand some of this stuff, these are some of the reasons. And you know what? You’ve often heard the expression, “There’s nothing sure but death and taxes.” But even with taxes, they aren’t sure, because they change all the time.
Sherry: They do change all the time.
Mike: Death is death…but…
Sherry: Right. They do change all the time. In 2025, like I said, there’s going to be the state and local tax (SALT) limitations as another thing. Everybody has heard a lot about this. Right?
Mike: Yeah.
Sherry: This impacts small businesses, very much so. You know, Maryland passed the pass-through entity tax law that allows our small business pass-through entities, S-corps, partnerships to deduct their state taxes as a business expense…
Mike: Mhmm.
Sherry: Right? Whereas, otherwise, it would have been caught up in the $10,000 limitation on the individual tax return, because those types of businesses pay their taxes on their business income at the individual tax rates. So, they’re not getting to take advantage of the 21% flat rate corporate rate. But, some of these things were built in, like the qualified business income deduction that I just talked about.
Mike: Yeah.
Sherry: In order to help those types of businesses, Maryland is one of the front runners in all the states. Now there’s 30 some states that do this, but Maryland was one of the first that did this. Also, Maryland’s law will be in place, regardless of what they do with the SALT limitation. So that’s important for our business owners to know that should still be available, regardless of whether or not they increase that $10,000 SALT limitation.
Mike: So, at the end of the line here, there’s way too much to go over. We’re almost out of time right now, but it’s pretty obvious to me that you are absolutely brilliant with this stuff, because you don’t have one note in front of you talking about this, you know, all this stuff off the top of your head. And so many of these things I didn’t even know about. So, I would encourage you again, as you are out there listening – contact somebody over at Brown Plus if you need some help, and everybody does when it comes to taxes. I wish we had more time to go over stuff. Anything you want to put in in the next maybe 20 seconds?
Sherry: The business beneficial ownership information (BOI) you’re seeing out there – this is not really tax related, but it is a division of the IRS Financial Crimes Unit. There was this January 1st deadline, but it’s currently an injunction. So, if you had that on your year-end to-do in the next couple of days, you can get that off your list right now. Of course, the government has appealed the decision, but it is constitutional. I expect that to go to the Supreme Court.
Mike: Wonderful. Thank you for all the tips and thanks for being on the show.
Sherry: You’re welcome.
Mike: All right. If you just now tuned in and missed it, don’t worry. We’ll have it up on our website and on Facebook tomorrow, but talking to Sherry Cracium-Bolin, Principal and Shareholder at Brown Plus. These guys can help you with your books, with your taxes, with all kinds of stuff.
About Chamber Chat:
Chamber Chat is a segment on Carroll County’s WTTR radio, broadcast on 102.3 FM, 93.5 FM and 1470 AM, airing Sundays from 6:45 AM to 7:30 AM. Hosted by Mike McMullin, President of the Carroll County Chamber of Commerce, each episode features discussions with a guest about their business and the local community.