Recently the IRS released "Notice 2018-64" regarding the new Qualified Business Income (QBI) 20% deduction. Now I won't go into great details regarding the notice, but it basically provides small businesses with a method for calculating W-2 wages for the purposes of determining if a small business qualifies for QBI. The notice outlines the regulations and specifies which business types qualify for the deduction. These regulations are proposed regulations (may be subject to change) and tax payers and professionals will need to rely on this guidance until final regulations are published.
The new QBI regulations will affect a great deal of small business owners in more ways than one. Some questions that small business owners need to address include:
We are currently developing a presentation that will go into greater detail regarding the QBI deduction and what you need to do as a small business owner to protect your hard earned dollars.
Had another great time meeting the many small business author/entrepreneurs in the local area this past weekend at the Atlanta Professional Business Network (APBN) Authors Showcase. After talking with many of the participants and fellow authors, I have compiled some key takeaways from the event.
The recently signed Bipartisan Budget Act of 2018 had a few tax extenders that are retroactive to 2017. some of the more notable provisions include:
Exclusion for discharge of indebtedness on a principal residence
The provision extends the exclusion from gross income of a discharge of qualified principal residence indebtedness through 2017. The provision also modifies the exclusion to apply to qualified principal residence indebtedness that is discharged pursuant to a binding written agreement entered into in 2017.
Premiums for mortgage insurance (PMI) deductible as mortgage interest
The provision extends the treatment of qualified mortgage insurance premiums as interest for purposes of the mortgage interest deduction through 2017. This deduction phases out ratably for taxpayers with adjusted gross income of $100,000 to $110,000.
Above-the-line deduction for qualified tuition and related expenses
The provision extends the above-the-line deduction for qualified tuition and related expenses for higher education through 2017. The deduction is capped at $4,000 for an individual whose adjusted gross income (AGI) does not exceed $65,000 ($130,000 for joint filers) or $2,000 for an individual whose AGI does not exceed $80,000 ($160,000 for joint filers).
Three-year depreciation for race horses 2-years-old or younger
The provision extends the 3-year recovery period for race horses to property placed in service during 2017.
Contact us if you have already filed your return and qualify for these tax extender provisions.
With just a few days left to go out and vote, here are the tax proposals for the two leading candidates.
The dog days of summer are in full swing and that typically means spending relaxing hours by the pool with friends and family, not thinking about the stresses of running your business. Before you know it though, those relaxing days by the pool will come to an end and it will be back to business.
There are a number of ways you can turn some of that summertime fun into immediate tax savings for your business and family. Here are a few:
These are just a few ways that you can turn your summertime activities into immediate tax savings. Have questions about how; feel free to contact us for time is running out.
Just like a sun tanner that stays out in the sun too long, you can get burned if you don't put a tax plan together soon.
If you’re like most small business owners (SBO's), you qualify for all sorts of valuable tax credits and deductions, not to mention additional strategies that could lower your tax bill. But if you (or your tax professional) aren’t looking out for them, you may be losing your share.
Now that tax season is over, you should review your tax return for the following:
Do I feel that I paid too much tax (or refund was too small)?
Did my small business take all the legal credits and deductions this year?
What strategies can I use to lower my tax in the future?
Many small business owners (SBO's) think that now that tax season is over they can tuck those tax returns away and get back to the more exciting, less stressful tasks in their businesses. Don't put away those tax returns just yet (especially if you feel you paid more tax than you should have). After tax season is a great time to review your tax returns for potential tax savings that you can implement right now. Most SBO's don't realize that every action they take in their business during the year has a real effect on their bottom line.
Some of the many deductions and credits a SBO may qualify for include:
These are just a few of the questions SBO's should be asking in the "off" season to ensure that they keep more of their hard earned dollars. Feel free to contact us regarding your assets, health care, or entity selection changes you would like to make before year end. The clock is ticking...