There is always so MUCH information when it comes to the IRS.
Some key takeaways to this bill:
Corporate tax rate has been changed to a flat 21%. Corporate AMT has been eliminated.
There is a Qualified Business Income deduction. Many of you already know about this one. It allows 20% of your self-employment income to be tax-free if you fall within a certain income threshold. It is meant to give relief to small businesses.
Depreciation limitations have changed. There are more options for depreciating business assets and new limitations on luxury passenger vehicles.
NOL can no longer be carried back BUT can be carried forward indefinitely. As a tax preparer, I love this one and I think this is long overdue. It makes the process simpler since you are just going forward and is more fair to the taxpayers since it can’t be taken away.
There is a limit on business interest expense.
Like kind exchanges are limited to real property only.
Qualified moving expense and bicycle commuting reimbursements must be included in an employees wages by the employer. There is an exclusion for certain qualifying military exceptions.
The entertainment deduction is basically eliminated. Meals can still be counted at the appropriate rates (50% – 80%)
The rehabilitation tax credit has been increased.
There is an employer credit for employers who offer two weeks of paid vacation to employees below a certain income threshold.
For farms, you have more depreciation options! That expensive equipment can be expensed sooner.
And a miscellaneous Opportunity Zone Credit which offers a deferral of gain if the gain is reinvested in a low income or distressed area.
Last but not least, your opportunity to contest a tax levy has been extended from nine months to two years. This is also long overdue and a very big win for taxpayers.
Here is a link to more details if you would like to read more about these:
https://www.irs.gov/pub/irs-pdf/p5318.pdf
Please call Fleig Financials LLC at 361 443-3787 so I can help you make sure you get the best tax credits you can this year!
Written by Laura Fleig
September 2, 2020
www.fleigfinancialsllc.com
