Federal Tax Law Changes Impacting Bottom Line of Many Businesses
Nov 16, 2018
The first overhaul in 30 years of the nation’s tax code, the Tax Cuts and Jobs Act, took affect this year, impacting nearly every business. The Internal Revenue Service (IRS) is reminding businesses of several changes that could impact the bottom line of many small businesses, including:
- Qualified Business Income Deduction. Many owners of sole proprietorships, partnerships, trusts and S corporations may deduct 20 percent of their qualified business income.
- Temporary 100 percent expensing for certain business assets. Businesses are now able to write off most depreciable business assets in the year the business places them in service.
- Fringe Benefits like entertainment and meals, qualified transportation and more.
- Estimated Taxes. Individuals, including sole proprietors, partners and S corporation shareholders, may need to pay quarterly installments of estimated tax unless they owe less than $1,000 when they file their tax return or they had no tax liability in the prior year (subject to certain conditions).