Hi there! And happy Monday! Hopefully, you survived the Back to School rush and are ready to conquer the week. Thank you for being a part of our audience and I hope you are having an amazing day. Welcome to another read on the The Keys. It’s your favorite Money Motivator – Growth Instigator, Erica Fields bringing you the keys to your financial house!
With the introduction of the Tax Cuts and Jobs Act, small businesses are scrambling to understand how their expenses will be fair for the slaughter of deductible expenses. Many will be surprised at the items that will no longer be considered a tax deduction. And a lot of us will be left paying a higher tax bill if we are not careful with spending business revenues.
Changes to Deductions
Having fun with clients and vendors creates synergy for your business relationships. So, we invest time and money to keep the relationship growing by entertaining them with tickets to a local ballgame or paying for a round of golf. The money spent to entertain clients and other business affiliates was an IRS 50% limited deduction up until 2017. Per the changes to the tax code for 2018, you are no longer able to deduct any portion of these costs. The bill is now 100% on you even if your meeting is all business-related.
Knowing which business expenses will be eliminated in 2018 will help small businesses with tax planning. Now is the time to begin your tax planning strategy if you don’t have one in place. You may have to pay your tax specialist a retainer to stay on top of your tax situation, but remember the investment is tax deductible.