The Tax Cuts Jobs Act (TCJA) and Tax Notices

27 February

Posted at 01:21h in by Jeanne Rogers

Why Staying on Top of Notices Matters as Extensions Advance

The Tax Cuts and Jobs Act (TCJA) has significantly shaped the tax landscape since its passage in 2017, providing major tax relief for businesses and individuals. Now, with recent legislative approval in the House and the bill moving to the Senate, efforts to extend and potentially make certain TCJA provisions permanent are gaining momentum.

As these developments unfold, businesses must stay ahead of tax notices that could impact compliance, tax liability, and cash flow. Government notices tied to tax law changes often indicate opportunities for refunds, deductions, and strategic tax planning.

The key takeaway? Staying informed and leveraging automation tools like NOTICENINJA can help businesses uncover hidden tax savings while ensuring compliance.

Understanding the TCJA and Its Impact on Businesses

The Tax Cuts and Jobs Act introduced sweeping tax reforms, including corporate tax reductions, changes to deductions, and incentives for business growth. Here are some of the key takeaways:

✅ Lower Corporate Tax Rates: The corporate tax rate was reduced from 35% to 21%, benefiting businesses across all industries.

✅ Bonus Depreciation: Companies can write off 100% of eligible business assets in the year they were placed in service—an immediate cash flow advantage.

✅ Interest Expense Limitations: The TCJA capped business interest deductions at 30% of EBITDA (earnings before interest, taxes, depreciation, and amortization). In 2022, this changed to 30% of EBIT (earnings before interest and taxes), reducing allowable deductions for some companies.

✅ Pass-Through Deduction: Owners of pass-through businesses (e.g., LLCs, S-Corps) may be eligible for a 20% deduction on qualified business income, subject to specific thresholds.

✅ State and Local Tax (SALT) Deduction Cap: The $10,000 cap on SALT deductions particularly affects businesses and high-income earners in states with higher taxes.

✅ Temporary Expiration of Provisions: Several TCJA provisions are set to sunset in 2025, unless extended by Congress. This creates uncertainty that businesses must prepare for.

What This Means for Businesses

With tax laws evolving, businesses must take a proactive approach to compliance. Government notices often highlight overlooked tax savings opportunities, so managing them properly can prevent missed refunds and costly penalties.

Why Tax Notices Are a Hidden Opportunity

Most businesses view tax notices as compliance issues—but in reality, they can be profit opportunities. Notices from federal, state, and local tax agencies can:

📌 Flag eligibility for tax credits and refunds that businesses might not be aware of.
📌 Inform businesses of changes to deductions or tax rates that impact their bottom line.
📌 Warn of compliance gaps that could lead to costly penalties.
📌 Highlight discrepancies in tax filings that, if corrected, could result in additional savings.

According to Notice Ninja’s analysis, many businesses leave thousands (sometimes millions) of dollars on the table by ignoring or mismanaging tax notices. The ability to interpret and respond promptly to these notices can be the difference between a major refund and an unexpected penalty.

The Role of AI in Tax Notice Management

As tax regulations become more complex, AI-powered solutions are revolutionizing how businesses manage compliance and tax savings. At NOTICENINJA, we use AI-driven automation to help businesses:

✅ Scan and Categorize Notices Automatically – AI detects key details from tax notices and prioritizes urgent actions.
✅ Identify Savings Opportunities – AI can flag potential refunds, deductions, or credits based on notice data.
✅ Ensure Compliance and Avoid Penalties – AI tracks deadlines and integrates with tax teams to reduce human error.
✅ Standardize Workflows for Multi-Jurisdiction Compliance – Companies in multiple regions benefit from automated tax notice processing.

According to Rick Pinkerman, COO of Notice Ninja:

"It’s very important to stay on top of government notices. Some of them are worth a lot of savings. More and more cuts mean more and more savings if you can see the big picture."

This is where AI becomes a game-changer—helping businesses see the big picture and make informed, proactive tax-saving decisions.

How Business Can Prepare for TCJA Changes

With legislative efforts advancing to extend and potentially make TCJA provisions permanent, business should take proactive steps to optimize their tax strategies now.

📌 Review past and current tax notices to identify any available credits or refunds.
📌 Ensure compliance with TCJA changes to avoid interest and penalties.
📌 Leverage AI tools like NOTICENINJA to automate tax notice tracking and management.
📌 Prepare for potential tax law adjustments and optimize for potential tax increases or changes.

Don’t Leave Money on the Table

The Tax Cuts and Jobs Act introduced opportunities for businesses to save money—but only if they stay compliant and act on critical tax notices. AI-powered solutions like NOTICENINJA make it easier than ever to track tax notices, maximize savings, and protect businesses from penalties.

The bottom line? If you don’t manage your tax notices, you could be leaving money on the table. With the right technology and proactive approach, businesses can ensure they’re getting every dollar they deserve.

Schedule a Free Demo of NOTICENINJA and discover how AI-powered automation can help your business stay compliant and maximize savings!