In a previous memo, I broke the bad news about the unintended consequences of the change in Code Section 274. For 2018 going forward, not only is entertainment no longer deductible (such as taking your clients to a Predators game), but the new law is currently written in such a way as to also disallow the deduction for meals with clients and prospects.Read More
The Tax Cuts and Jobs Act of 2017 has created several changes in requirements for businesses with sales below $25M. We will highlight and discuss these changes and some options that will be available to many businesses below this threshold. We will also discuss one change that will negatively affect you if your revenues are above this $25M threshold.
By now you have all heard of this new 20% deduction for business income for non C-Corporation businesses. I refer to it this way instead of the 20% deduction for flow-thru business income because I want to make sure you all understand, this deduction is also available for those of you who are sole proprietors and individual owners of rental real estate, and not just for partnership and S-Corp income. You also receive this possible deduction if you receive income from a REIT, publicly traded partnership or qualified cooperatives.Read More
With the year just starting, I wanted to give some practical applications, suggestions and questions you should be asking yourself or your employer, or changes you should make to internal processes because of changes in the Tax Cuts and Jobs Act.
Miscellaneous Itemized Deductions
The miscellaneous itemized deductions many of you take on your individual returns are now no longer available. Things like unreimbursed business expenses, home office use if you are an employee, and tax return preparation fees are examples.
Lawmakers finally did it. First, they reduced the directly related and associated entertainment deductions to 80 percent with the 1986 Tax Reform Act. In 1993, they reduced that 80 percent to 50 percent.
And now, with the newest tax reform, lawmakers simply killed business deductions for directly related and associated entertainment effective January 1, 2018.Read More