Small Business Sunday: Tax Law Changes You Need to Know
Welcome to the first installment of Small Business Sunday! We developed this new blog series to help the small business owner feel more confident about the financial side of their business—from accounting to payroll to broader decision-making.
This week, we’re discussing tax law changes small business owners need to be aware of. The TCJA (Tax Cuts and Jobs Act) of 2017 was the most significant tax reform legislation we’ve seen in decades, and many of the changes are pertinent to small business. These are just a few of the major changes to deductions, expensing and other tax items that have taken effect in the 2019 tax season.
In compiling this list, we consulted the IRS website. Please visit the link to read the full list and find out more information.
Deductions
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Some types of businesses (including sole proprietorships and LLCs) are now eligible for a deduction of up to 20% on qualified business income.
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Entertainment expenses are now non-deductible. However, business meals are still 50% deductible, assuming the taxpayer or an employee is present and the food/beverages served are not “extravagant.”
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Local lobbying expenses are no longer deductible.
Depreciation
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Under TCJA, 100% expensing is temporarily allowed for property acquired and placed in service between 9/27/17 and 1/1/23. The 100% will decrease each year between 2022 and 2027.
Employees
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There is a new tax credit for employers that offer paid family and medical leave.
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Bicycle commuting reimbursements are now deductible, and they are no longer excludable from employees’ income—they must be included in wages.
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Moving expense reimbursements must also be included in wages.
TSK Accounting has been helping small businesses maximize their earnings and keepings for more than 25 years. We strive to empower business owners with the knowledge and tools they need to flourish—and that starts with building financial confidence.
