2018 Tax Overview Guide – The Tax Cuts and Jobs Act
Do you need help understanding the significant changes in the recent tax bill that was signed in December 2017. Here is a summary list of the expected changes:
- Farm equipment can now be depreciated at 5 years instead of 7 for both corporate and non-corporate farms.
- Domestic production activities deduction has been repealed.
- Like-kind exchanges are now solely limited to real estate.
- Businesses can now claim 100% bonus depreciation for property purchased between September 27, 2017 through December 31, 2022.
- Businesses can now depreciate vehicles with specific caps.
- Cash accounting limits have now been raised to $25,000,000 including farming corporations.
- Net operating losses are now limited to 80% of taxable income.
- Employee leave credit is now 12.5% for employees who pay employees for family/medical leave.
- Research and development expenses can now be credited through a 5-year amortization.
- Interest deductions are capped at 30% of adjusted taxable income for businesses with gross receipts over $25,000,000.
- Section 179 limit has been raised to $1,000,000 (investment limit of $2,500,000). The SUV limit is now $25,000.
- Business meals, entertainment, amusement, recreation and membership dues to clubs can no longer be deducted.
#AchieveMore in 2018! Let us help you plan. Credits to Michael Grishman, CPA at TMS Consulting.