You still have time to save on your 2018 tax bill
Since last January, details of the Tax Cuts and Jobs Act (TCJA) have circulated through media outlets everywhere. The TCJA is the most sweeping tax system reform the U.S. has seen in over 30 years. That means it’s time to throw out everything you think you know about filing your taxes and look at the process with fresh eyes (and a knowledgeable tax attorney). San Francisco-based tax law firm, Moskowitz LLP provides insight into some of the biggest changes you’ll see and how they’re likely to affect your business.
With the 2019 tax season officially upon us, people are wondering how the new law will impact their pocket book this year. Here are some important questions to answer regarding your business before filing this year’s return:
• Did you spend money on meals and entertainment? The tax deductibility of business meals is now limited more strictly, while entertainment costs are entirely non-deductible. Company qualifying-organized recreational and social activities such as holiday, birthday and anniversary parties are still deductible. Taking the time to think through your current structure for these expenses is a worthwhile effort.
• Have you reexamined your pass-through deduction amount? Owners qualifying of S-Corps, Limited Liability Companies, Sole Proprietorships and Partnerships, can now deduct up to 20% of qualified business income on their taxes. However, your amount of qualifying business income varies, depending on the nature of your business and your total income as well as other qualifying factors. Now is the time to seek help from a knowledgeable tax professional, like the tax attorneys at Moskowitz LLP, to find out how to maximize your benefit.
• Should you convert between a “C” and “S” corporation? There may be some monetary benefits to restructuring your business because of the new law it is worthwhile to know how the benefits and detriments affect your business and to do projections of the expected effect if you change your type of business entity, it’s worth connecting with a qualified tax attorney to see if such a change would benefit you.
• Did you purchase equipment? If you made such a purchase after September 27, 2017, you may qualify for a 100% write-off of that item’s value in the year of purchase instead of depreciating it over a number of years. Speak with a tax attorney to find out which items qualify, and how much you are eligible to deduct.
The TCJA will likely impact your tax situation this year, so now is the time to take a look at the complex changes and consider how they apply to you and how you can most benefit from them.