The Tax Cuts and Jobs Act ushers in some significant tax changes for businesses which our CPA office has summarized below:
One of the key benefits of the TCJA for businesses is lower tax rates for C-corporations effective in the 2018 tax year. For businesses that are considered “pass-through” (such as partnerships, limited liability companies taxed as partnerships or S-corporations) may also see their tax bills cut.
What is a NOL and how do you know if you have one? A net operating loss, or NOL, is realized when a loss taken by a company in a certain period (usually a tax year) makes its allowable tax deductions greater than its taxable income. In this situation, the NOL has traditionally helped companies recover past tax payments with the carryforward rule in place. However, the treatment of NOL for corporations is changing starting this tax year, due to the effect of the following new provisions:
Keep in mind, however, that expenses for entertainment, amusement, or recreation in the course of business are not deductible. For example, if you want to treat your client to dinner plus tickets to a show, only 50 percent of the meal expenses would be deductible.
You can deduct client meal expenses, but they have to be legitimate. As a refresher, here are the requirements for being able to take advantage of the meal expense deduction on your freelance business tax return:
Remember that you must have receipts to support your meal expense deductions (not just a credit card statement) so be sure to keep those filed with your other tax information. If you need assistance with 2018 tax planning and tax filing please us.
TThere are several deductions that will be eliminated or reduced, which may or may not be offset by a larger standard deduction:
Notable items that are not changing for individuals include:
Taxpayers should understand that a majority of these tax reform provisions are applicable only through 2025. We will continue to provide you with updates on the new changes in tax laws throughout the year. Please do not hesitate to contact us in regard to any questions you may have about the Tax Cuts and Jobs Act.