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:

  1. Farm equipment can now be depreciated at 5 years instead of 7 for both corporate and non-corporate farms.
  1. Domestic production activities deduction has been repealed.
  2. Like-kind exchanges are now solely limited to real estate.
  3. Businesses can now claim 100% bonus depreciation for property purchased between September 27, 2017 through December 31, 2022.
  4. Businesses can now depreciate vehicles with specific caps.
  5. Cash accounting limits have now been raised to $25,000,000 including farming corporations.
  6. Net operating losses are now limited to 80% of taxable income.
  7. Employee leave credit is now 12.5% for employees who pay employees for family/medical leave.
  8. Research and development expenses can now be credited through a 5-year amortization.
  9. Interest deductions are capped at 30% of adjusted taxable income for businesses with gross receipts over $25,000,000.
  10. Section 179 limit has been raised to $1,000,000 (investment limit of $2,500,000). The SUV limit is now $25,000.
  11. 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.