The Tax Cuts and Jobs Act (TCJA) includes several changes that affect partnerships and their partners, and LLCs that are treated as partnerships for tax purposes and their members. Some good some not so good! We are at your disposal to identify opportunities within the new law that apply to you and help steer you away from new pitfalls and challenges. Please call our office today at 262-358-8297 to set up a tax planning meeting.
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The Tax Cuts and Jobs Act (TCJA) disallows all miscellaneous itemized deductions subject to the 2% floor for the tax periods 2018-through 2025. What does this mean for the Home Office Deduction during the aforementioned tax periods? Company Employees who work from home will no longer be eligible to deduct any home office expenses as in past years. In prior years, all the expenses that went into making the home office space comfortable from the paint to the furniture were deductible as home office expenses. Now you will be working from home for the pure convenience of it, no more perks for the next 7 years (including the current year)! Good News for those Self Employed- You can still deduct eligible home office expenses against your self-employment income. The recently enacted Tax Cuts and Jobs Act (TCJA) has altered the tax landscape for a lot of individuals and businesses. The changes are extensive and this blog provides a high-level overview of some of the highlights to keep you informed. Due to the sweeping nature of the changes and the need for continued guidance, we’d like the opportunity to have a personalized conversation with you now to discuss planning opportunities for your specific situation. Additional conversations and tax projections are likely necessary to ensure we maximize your tax benefits. Please call our office at your earliest convenience to schedule a meeting. Here’s how the TCJA applied its tax reform to your supper money meal allowances. Before tax reform, you deducted 100 percent of the supper money cost. Now, because of tax reform, your tax deduction for supper money is subject to a 50 percent cut for amounts paid during tax years 2018 through 2025. As of January 2, 2018 there is a new and improved Section 179 deduction, thanks to the TCJA. Section 179 was retroactive to 09/27/2017, which means most of you who have depreciable assets have benefited from this change on your 2017 tax return. What is great about Section 179 is it is like having a flexible tax shelter in your back pocket for when you need it for depreciable assets, but it doesn't have to be used. The Section 179 deduction is available for both new and used assets (same as prior years) and offers you deduction flexibility. You have up to $1 million in Section 179 deduction availability. You also have new Section 179 qualifying asset possibilities such as
The big advantage to Section 179 deductions over bonus depreciation is flexibility. But bonus depreciation has its place as a tax strategy. Tax reform changed the rules of the game when choosing your best tax structure. In looking over the possibilities, we note that a properly structured spousal partnership could be your best choice. Here are the tax benefits to you:
Here are the potential issues:
If you would like to discuss how your choice of business entity works in today’s tax environment, please don’t hesitate to contact us. |
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Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances. AuthorKeana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients. |