The Arlington County Public Library showed its love and support for local business last week by hosting my workshop, “Your Business and the 2017 Tax Cuts and Jobs Act”. They really packed the house with business owners who had lots of fantastic questions. My job – provide equally fantastic answers.
The new tax law is jammed with changes that businesses need to be aware of. We only covered a few changes that impact “pass-through” businesses – sole proprietorships, partnerships, or Subchapter S corporations. We had to be pretty general. Based on the evening’s discussion, attendees left armed with even more detailed questions to ask their own tax preparers.
I can’t replicate the energy in that library conference room here, but I can share a few facts from the workshop that you can use for your business:
- Qualified Business Income Deduction – Qualifying pass-through businesses may be eligible for a deduction of 20% of qualifying net business income (i.e., excluding interest and other income not derived from sales or fee revenue). For owner/employees with income over $315K (married filing joint) or $157.5K (all other filers), the deduction could be limited.
- Higher Asset Depreciation Limits – For assets placed in service after 2017, businesses can elect to expense any section 179 property in the year the property is placed in service. The maximum deduction is increased from $500K to $1 million, and the phase-out threshold is increased from $2 million to $2.5 million.
- Employer Deduction for Fringe Benefits – A number of employer deductions are disallowed, including activities generally considered to be entertainment, amusement, or recreation; membership dues for clubs organized for business, pleasure, recreation, or other social purposes; and expenses associated with transportation fringe benefits or for commuting.
- Pass-through Loss Limits – For some taxpayers, losses from pass-through businesses after 2017 cannot be used to offset other income, such as investments, Starting in 2018, the net operating loss deduction is limited to 80 percent of taxable income.
My evening at the Arlington County Public Library was a lot of fun for me. I hope that everyone else also had fun and felt more aware of business tax law changes. Thanks to the Library Staff and incredible Research Librarian for making this event happen for the community!