In December 2017, Congress made sweeping changes to the business tax rules which have been viewed as much more radical than the landmark 1986 tax reform bill. Let’s look at some critical points that you should consider because waiting until the end of the year may be too late to get the best tax
• If you are structured as a C corporation, you have been blessed with a flat tax of 21%. If your
net taxable income is over $ 50,000 this new tax rate will generate some positive savings.
• The biggest change associated with the new tax law relates to what has been called a “pass through deduction” which is available to certain types of business owners. Determining if you are eligible for this deduction is somewhat easy if your taxable income is less than $ 157,500 for single and $ 315,000 for joint filers. If so, you will qualify for the 20% deduction and not have to jump through a lot of hoops. If your taxable income is in excess of these levels, you should schedule an appointment with your tax preparer as you may still qualify for the deduction under certain circumstances.
• All entertainment and meals expense related to Saints games and other sporting events will no longer be deductible in 2018.
• Meals with clients and prospects may not be deductible starting in 2018. In the past you could deduct 50% of the meals expense. Check with your tax preparer to see what documentation you will need to retain in order to claim this deduction.
• There are significant changes in depreciation rules that you will need to review with your tax preparer.
Overall, the new tax law should provide some very good opportunities for businesses that are willing to take the necessary time to map out a favorable tax plan.