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Tax advice from Mitch: Tax Law Changes in the BBB Act /  Last few days of year 2021 
December 27, 2021
Tax advice from Mitch: Tax Law Changes in the "Build Back Better" Act
          Is Biden getting rid of the QBI deduction?
          The so-called qualified business income, or QBI, deduction is part of the 2017 Tax Cut and Jobs Act. The provision allows pass-through businesses, such as sole proprietors, partnerships and S-corporations, to deduct up to 20% of eligible revenue. ... Without an extension from Congress, the deduction will expire after 2025.
          My phone has been ringing off the wall with people asking about changes in the tax law in 2022.  Further complicating the situation are the talking heads in the media and even some people in our industry who are handing out tax tips that aren’t worth the hard drive space that they are occupying.
          The House passed the Build Back Better Act (H.R. 5376) and sent it to the Senate for consideration on Nov. 18, 2021.  The Senate didn’t completely agree with the House and is working on a Reconciliation bill. There are also many tax provisions in the House bill and the Reconciliation bill.  Since whatever gets passed will have an effect on what I do for a living, I am paying a lot of attention to what is happening in Washington.
          Here is what appears to be out in the Reconciliation Bill
          Corporate income tax rate increase – but this shouldn’t be a big deal to most Security Company owners because you are all S Corps, right?
          Individual ordinary income tax rate increase – this is good news as it will simplify tax planning.  Hopefully we will know in a week or so.
          Capital gains and dividends rate increases – No Chicken Little the sky is not falling.  You don’t have to rush to sell your company, and, if the House Bill would have passed intact, the capital gains changes would have been effect the date that the Bill passed Ways and Means which was September 15th.
          QBI (IRC section 199A) changes – this is big news.  If you have an S Corp or an LLC and you don’t know what this is, fire your tax guy and call us.
          Corporate AMT based on book income  - Not a big deal for most of us.
          Revised SALT cap – Great news if you live in a state with an income tax or if your property tax bill is more than $10,000
          Surcharge on high-income individuals, estates and trusts – kind of like the luxury tax in Monopoly except you can’t use funny money to pay it.
          Congress has a lot of stuff to do before they head home for Winter Break so don’t
expect to see this pass before January.  I will keep you posted.
Mitch Reitman 
Reitman Consulting Group
Fort Worth, TX
          Could be wishful thinking but I don’t think any legislation by the Democrats will be passed until they change their agenda, which isn’t likely.  In eleven months they will lose the house and senate, and even though the Republicans have proven themselves fairly useless, at least we won’t get progressive legislation. The division between parties and a president without control of congress is likely not good for anyone, except maybe the alarm industry because there is always a need for security.  Although approach to law enforcement and crime is surely shifting, starting with the Mayor of San Francisco a few days ago. 
          So thanks for the review of the pending legislative proposals Mitch.  Keep us informed.
Last few days of year 2021
            Last few days of year 2021. Well last year when I wrote an article with this topic and theme I was hoping for a better year, but 2021 hasn’t been that hot either, though we are getting use to living with Covid and trying to get back to normal.  But as I write this the world’s economics and politics have directly affected the alarm industry.  You can’t get products.  That’s pretty scary.  It’s not just cameras; it’s not just cameras that the US govt doesn’t want you or anyone else to use. So, that’s something we hope improves in 2022.
          A lot of you lost accounts in 2021, mostly customers going out of business.  But despite that business in general was pretty good, better than 2020, hopefully not as good as 2022 will be.  Loss of accounts yet better business means turn-over of accounts and overall increase in accounts.  Don’t waste the moment.  If you aren’t doing business the way you should be, you probably know it, it’s time to change course.  Here’s a few ideas:
          Join the Concierge Program:  get the best advice, the best access and discounts that pay for the program.
          Get or update your contracts.
          Use the Employment Agreement for all employees and get a Handbook if you have more than 10 employees [an arbitrary number, so if you have at least one employee you can use the handbook, even if you have the employment agreement].

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301