Tax Deductions to Look for Under the New Tax Law

November 01, 2018

The Tax Cuts and Jobs Act was signed into law last year, bringing many changes that affect individuals, businesses, and tax-exempt and government entities. Dave Gourley, president of TaxBot, a TAR member benefits partner, offers a few insights into changes that affect your business deductions. Remember to consult with your personal tax advisor to determine how the following might apply to your business.

Entertainment.The days of writing off that round of golf or other forms of entertainment with your client may be gone, but treating them to a nice meal should still be deductible.
Healthcare costs. Healthcare costs continue to rise, but there may be a silver lining. Many small-business owners may be able to write off 100% of their healthcare expenses utilizing a Health Reimbursement Arrangement (HRA). For more info, go to hra.taxbot.com.
Luxury vehicles.The luxury limits for cars increased dramatically. You can now write off up to $50,000 of a luxury vehicle over a five-year period. (It was previously $15,800.) This means you can write off luxury vehicles up to three times faster than before.
New 20% pass-through bonus deduction. Most business owners can now get a deduction equal to 20% of their business’s net income. This would effectively reduce your taxable income. Your business must be a “pass-through” entity, so consult with your tax advisor to determine if your business qualifies.
Trade association participation. Deduct expenses related to and necessary for attending business meetings or conventions of certain tax-exempt organizations. This includes the REALTOR® association, so there’s one less excuse for not getting involved.

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