Category: Tax Cuts and Jobs Act

Under today’s federal income tax rules, your small business may be able to claim big first-year depreciation write-offs for eligible assets that are placed in service in the current tax year. But that strategy might not be right for every small business every year. Here’s what you should know before claiming 100% first-year bonus depreciation or first-year Section 179 deductions. First-Year Depreciation Breaks The Tax Cuts and Jobs Act (TCJA) included two generous first-year depreciation tax breaks for business taxpayers:… Read more ›

With the presidential election only weeks away, many people are beginning to pay closer attention to each candidate’s positions on such issues as the COVID-19 pandemic, health care, the environment and taxes. Among their many differences, President Donald Trump and former Vice President Joe Biden have widely divergent tax proposals. Their stances could have a major impact on the amount of taxes you’ll owe in the future. Here’s an overview of each candidate’s tax proposals for both individuals and businesses…. Read more ›

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides roughly $2 trillion of much-needed financial relief, including tax relief, to individuals and businesses. This relief is in response to the coronavirus (COVID-19) pandemic. One CARES Act provision temporarily relaxes the Tax Cuts and Jobs Act (TCJA) limitation on deductions for business interest expense. Here’s the story. TCJA Limitation on Business Interest Expense Deductions Before the TCJA, some corporations were subject to the so-called “earnings stripping” rules. Those rules attempted… Read more ›

On Friday, March 27, President Trump signed into legislation the Coronavirus Aid, Relief and Economic Security Act (CARES) Act. The $2.2 trillion legislation represents the largest stimulus package in U.S. history—dwarfing the $800 billion package signed during the 2008 financial crisis—and provides a variety of economic relief measures to mitigate the impact of the coronavirus pandemic on American society. This top-level overview represents the first of several upcoming alerts by CBM on various components of the CARES Act. Among the… Read more ›

2020 is a presidential election year. You’ll have an opportunity to cast a vote for your favored presidential candidate in November, but you can make several other key “elections” this year when filing your 2019 tax return. These elections may be influenced by the Tax Cuts and Jobs Act (TCJA), as well as the year-end spending package that was signed late last year. Here are ten important choices that individuals and small business owners can make this tax season. 1…. Read more ›

Tax reform increased first-year bonus depreciation to 100% for most long-term assets placed in service after September 27, 2018. When using bonus depreciation, eligible assets are not subject to an annual dollar limit; except for listed property, the asset does not need to be used 50% of the time for business; and they are not limited to annual business profit. The generous depreciation percentage remains in effect from September 27, 2017, until January 1, 2023, after which it is scheduled… Read more ›

With its winter recess looming before it, Congress has engaged in a flurry of activity. Most notably, it reached agreement on a massive governmentwide spending package titled the Further Consolidated Appropriations Act, 2020. The legislation extends certain income tax provisions that had expired, as well as some that were due to expire at the end of 2019. Congress traditionally passes so-called “extenders” annually, but it neglected to do so for 2018. As a result, several popular breaks for both individuals… Read more ›

  Earlier this year, the IRS published a proposed safe harbor giving owners of certain rental real estate interests the opportunity to take advantage of the qualified business income (QBI) deduction. The QBI write-off was created by the Tax Cuts and Jobs Act (TCJA) for pass-through entities. The IRS has now released final guidance (Revenue Procedure 2019-38) on the safe harbor that clearly lays out the requirements that taxpayers must satisfy to benefit. QBI in a nutshell The TCJA added… Read more ›

Congress has yet to tackle several outstanding uncertainties frustrating both businesses and individual taxpayers. The Tax Cuts and Jobs Act (TCJA), for example, contains several “glitches” requiring legislative fixes. Congress also has neglected to pass the traditional “extenders” legislation that retroactively extends certain tax relief provisions that expired at the end of an earlier year, in this case 2017. Tax Cuts and Jobs Act Glitches The sprawling TCJA signed into law in late 2017 contains some inadvertent glitches that range… Read more ›

When President Trump signed into law the Tax Cuts and Jobs Act (TCJA) in December 2017, much was made of the dramatic cut in corporate tax rates. But the TCJA also includes a generous deduction for smaller businesses that operate as pass-through entities, with income that is “passed through” to owners and taxed as individual income. The IRS issued proposed regulations for the qualified business income (QBI), or Section 199A, deduction in August 2018. Now, it has released final regulations… Read more ›