The TCJA changes some rules for deducting pass-through business losses
The Tax Cuts and Jobs Act restricts the losses that owners of pass-through entities (including sole proprietors) can currently deduct. For tax years beginning in 2018 through 2025, an “excess business loss” can’t be deducted in the current year. This is the excess of your aggregate business deductions for the tax year over the sum of 1) your aggregate business income and gains for the tax year and 2) $250,000 ($500,000 if you’re a married joint-filer). The excess business loss is carried over to the next tax year. Additional rules apply. Contact us for details.
Can you deduct business travel when it’s combined with a vacation?
If you go on a business trip within the United States and tack on some vacation days, you might be able to deduct some of your expenses. Here’s what you need to know.
IRS Audit Techniques Guides provide clues to what may come up if your business is audited
Audit Techniques Guides (ATGs) were created to enhance IRS examiner proficiency, but they also can help small businesses ensure they aren’t engaging in practices that could raise red flags with the IRS.
2 tax credits just for small businesses may reduce your 2017 and 2018 tax bills
Providing employee benefits can help businesses attract and retain the best workers. But the cost can be out of reach for some small businesses. Two tax credits can help make benefits more affordable for eligible small employers: 1) a credit equal to as much as 50% of health coverage premiums paid, and 2) a credit of up to $500 for creating a retirement plan. Contact us to learn if you can take these or other credits on your 2017 tax return and to plan for credits you might be able to claim on your 2018 return if you take appropriate actions this year.
Meals, entertainment and transportation may cost businesses more under the TCJA
The Tax Cuts and Jobs Act (TCJA) curtails business deductions for meals, entertainment and transportation. Under the TCJA, deductions for business-related entertainment expenses, once 50% deductible, are disallowed. Meal expenses related to business travel are still 50% deductible, but the 50% rule now also applies to meals provided on an employer’s premises for its convenience. The TCJA also eliminates employer deductions for providing employee transportation fringe benefits, such as parking allowances and mass transit passes. Contact us for more details.
Your 2017 tax return may be your last chance to take the “manufacturers’ deduction”
While many provisions of the Tax Cuts and Jobs Act (TCJA) will save businesses tax, one break it eliminates is the Section 199 deduction. Often referred to as the “manufacturers’ deduction,” this potentially valuable break, when available, can also be claimed by eligible construction, engineering, architecture, computer software production and agricultural processing businesses. Under the TCJA, 2017 is the last tax year non-corporate taxpayers can take the deduction (2018 for C corps.). Contact us to learn whether you qualify for this break on your 2017 return.
New tax law gives pass-through businesses a valuable deduction
Owners of “pass-through” businesses may see some major (albeit temporary) relief under the Tax Cuts and Jobs Act (TCJA) in the form of a new deduction for a portion of qualified business income (QBI). For tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026, owners of entities such as sole proprietorships, partnerships, S corporations and LLCs generally can deduct 20% of QBI, subject to restrictions that can apply at higher income levels. More rules and limits apply; careful planning will be necessary to gain maximum benefit. Contact us for details.
2018 Tax Filing Season Begins Jan. 29, Tax Returns Due April 17
IR-2018-01, Jan. 04, 2018
WASHINGTON ― The Internal Revenue Service announced today that the nation’s tax season will begin Monday, Jan. 29, 2018 and reminded taxpayers claiming certain tax credits that refunds won’t be available before late February.
The IRS will begin accepting tax returns on Jan. 29, with nearly 155 million individual tax returns expected to be filed in 2018. The nation’s tax deadline will be April 17 this year – so taxpayers will have two additional days to file beyond April 15.
The TCJA temporarily expands bonus depreciation
The Tax Cuts and Jobs Act (TCJA) significantly enhances bonus depreciation. You might even be able to benefit when you file your 2017 tax return. Generally, for qualified property placed in service between Sept. 28, 2017, and Dec. 31, 2022, the first-year bonus depreciation percentage increases to 100%. In addition, the 100% deduction is allowed for not just new but also used qualifying property. The new law also allows 100% bonus depreciation for qualified film, television and live theatrical productions. Contact us for more information.
2017 company holiday party is probably tax deductible, but 2018 may not be
A business’s holiday party costs can reduce its taxes, but maybe not after 2017. For 2017, businesses are generally limited to deducting 50% of allowable meal and entertainment (M&E) expenses, but certain expenses, such as a holiday party for employees, can qualify for a 100% deduction. However, the M&E deduction for employee parties (and for many other M&E expenses) will likely be eliminated beginning in 2018 under the Tax Cuts and Jobs Act. To learn more about deducting M&E expenses, contact us.
Key deadlines for businesses and other employers
Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2018. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.
Getting around the $25 deduction limit for business gifts
At this time of year, it’s common for businesses to make thank-you gifts to customers, clients, employees and other business entities and associates. Unfortunately, the tax rules limit the deduction for business gifts to $25 per person per year, a limitation that has remained the same since it was added into law back in 1962. Fifty-five years later, the $25 limit is unrealistically small in many business gift-giving situations.
Sec. 179 expensing allows businesses an immediate deduction
Sec. 179 expensing allows businesses an immediate deduction for the cost of eligible asset purchases (up to certain limits), rather than depreciating them over a number of years. Another depreciation break for assets that qualify is 50% first-year bonus depreciation.
Reduce your 2017 tax bill by buying business assets
Depreciation-related tax breaks can provide significant tax savings. But keep possible tax law changes in mind as you consider buying business assets between now and year end.
Choosing the best way to reimburse employee travel expenses
If your employees incur work-related travel expenses, you can better attract and retain the best talent by reimbursing these expenses. But to secure tax-advantaged treatment for your business and your employees, it’s critical to comply with IRS rules. Reasons to reimburse While unreimbursed work-related travel expenses generally are deductible on a taxpayer’s individual tax return...Read more HERE
Don't delay...come see The Eldridge group today
The deadline is nearing and it is time to make a decision: Should you file now, or do you need to file an extension? No matter what choice you make, or if you are unsure of what choice to make, come see The Eldridge Group today for expert guidance before it is too late.
IRS boss: Please don't call during filing season
WASHINGTON — The nation's top tax collector urged taxpayers not to call the IRS during the coming tax season, saying that budget cuts have hampered the agency's ability to provide taxpayer service.
Tax Cuts and Jobs Act: Key provisions affecting businesses
The recently passed Tax Cuts and Jobs Act includes a multitude of provisions that will have a major impact on businesses. For example, it creates a flat corporate rate of 21% and temporarily provides a new 20% qualified business income deduction for owners of flow-through entities (such as partnerships and S corporations) and sole proprietorships. It also enhances some breaks, but it limits or eliminates many others. The changes generally apply to tax years beginning after December 31, 2017. Contact us for more details and to discuss the impact on your business.
Interesting Development in IRS Audits
We're about to witness an interesting development in IRS audits.
You may be aware that the statute of limitations on returns under normal circumstances is 3 years. Click here for more info.
Contact us if you are ever contacted by the IRS with any audit request, hire a professional immediately to protect you against this threat.
Should you buy a business vehicle before year end?
Buying a business vehicle by December 31 can reduce your 2017 tax bill. The vehicle may qualify for Sec. 179 expensing, allowing you to immediately deduct, rather than depreciate over several years, some or all of the cost. The normal Sec. 179 expensing limit of $510,000 generally applies to vehicles weighing more than 14,000 pounds. A $25,000 limit applies to SUVs weighing less than that but more than 6,000 pounds. Lower limits apply to lighter vehicles. But tax reform could affect whether buying in 2017 or 2018 makes more tax sense. Contact us to learn more.
Accrual-basis taxpayers: These year-end tips could save you tax
One way accrual-basis taxpayers can save tax is to properly record and recognize expenses incurred this year but that won’t be paid until 2018 so they can be deducted on the 2017 tax return. Common examples include commissions, salaries, wages, payroll taxes, advertising, interest, utilities, insurance and property tax. 2017 may be an especially good year to accelerate deductible expenses. Why? Income tax rates for many businesses could drop significantly in 2018, and deductions save more tax when rates are higher. Contact us for more year-end tax planning tips.
How we can support our veterans?
With Veterans Day on Nov. 11, it’s an especially good time to think about how we can support our veterans. One way businesses can do so is to hire them. An added bonus is that the Work Opportunity tax credit (WOTC) can save tax when you hire from “target groups,” including certain veterans.
Scam e-mails hit on taxes, e-cigarettes
The big trick in scam e-mails lately is to put consumers on edge right from the start. Get them a little anxious about something that could create super headaches... Click HERE to read more
Politics, taxes, and your business
Are your political contributions a deduction?
15 small business tax deductions
Are you taking advantage of the tax deductions for your business? Call and schedule an appointment to make sure your expenses are applied properly.
High income and itemized deductions
Taxpayers who itemize deductions and are subject to the AMT, lose their deductions for state and local income and property taxes, among other benefits.
Small business Structures
If you are paying more than 20% in taxes, chances are changes can be made. The Eldridge Group can help you with a Multiple Entities Strategy. Click here to read more.
Now, more than ever, it is extremely important to hire a CPA or Enrolled Agent to prepare your taxes. The tax code is becoming more and more complex; and, typically, only those who are CPAs or Enrolled Agents have the full training needed to ensure every deduction is found. The Eldridge Group employs CPAs and Enrolled Agents (EAs) to prepare taxes, not just any person who passes a tax class. Contact us today about a free review or to have your taxes filed. Click here to find out!
Spending hundreds on prom
What did your family spend on prom compared to the Average American?
Tax benefits increase due to inflation adjustments
The IRS has made several adjustments to items that could be benefiting you.
"This is the time of year when high school seniors start to calm down and their parents start to get anxious...How do the parents scrape up the money to pay for the tuition?
Read Reuters' blog post on tuition strategies to learn more.
The Richest 1 Percent of Americans Pay 24 Percent of Federal Taxes
The Congressional Budget Office released its annual study of the distribution of income and federal taxes. It tells us what we've long known: The rich pay a lot of federal taxes, much more than the middle class and the poor...Click Here to read more.
The important 20 minutes of your day...your daily battle plan should include tax planning for 2014
"Six savvy tax moves to Make by the End of the Year"
Click here to read the list and if the moves make sense for you.
Doing business with friends
Entrepreneurs talk about the perks and perils of mixing small business and friendship... read the details here.
How do your state and county taxes stack up against the nation?
Check them out here!
Good Luck resolving issues with the irs
"Sometimes dealing with the Internal Revenue Service goes smoothly. Yet there are times within this agency when one hand doesn't know what the other hand is doing. And this year especially when budget cuts have resulted in poor customer service, resolving the issue can be stressful and take much longer than anticipated."
Read the issue and solution here.
Deducting Losses Due to Natural disasters
With several storms passing through the United States, it is important to keep track of what losses may be reclaimable during tax season.
Click here to find out more!
Don't miss these critical retirement milestones
Most of us would love to enjoy a retirement that allows us to play golf, hang out on the beach, volunteer for worthy causes, spend time with our grand-kids, travel to Europe, and do all types of other amazing activities.
But in order to maximize your ability to save on taxes, avoid government penalties and fees, and capitalize on benefits, you'll need to circle a few important dates... Click HERE to read more
Feds Sent 800,000 Obamacare Customers the Wrong Tax Forms
"Hundreds of thousands of HealthCare.gov customers have been sent incorrect tax information from the government"...even more reason why hiring a professional for tax advice is absolutely necessary
IRS chief warns of refund delays
Taxpayers could see delays in getting their refunds this year -- as well as "unacceptable" customer service -- as the IRS commissioner warns budget cuts are forcing the agency to cut back. Read more here.