Since the idea’s always best to be well-prepared when the idea comes to taxes, here are some of the fresh modifications which you should be aware-of. As with anything to do with the government or taxes — if you definitely want to stay-top of This kind of information, meet with your tax advisor along with frequently check for updates on IRS.gov.
Keep in mind, This kind of isn’t legal advice as I’m not in which space … however more a few fresh tax laws for 2017 which I’ve noticed which business owners should pay attention too.
Section 179 expensing/bonus depreciation
Under Section 179 of the tax code, explains Brian McCuller, JD, CPA, “the expensing provision allows capital investments of up to $500,000 for certain property to be taken as an expense deduction — rather than being depreciated break — which was made permanent under the PATH Act passed at the end of 2015 — phases out for asset purchases above $2 million.”
Additionally, HVAC units are at This kind of point eligible as an expense deduction instead of depreciation in tax years beginning after Dec. 31, 2015.
“The bonus depreciation provision allows businesses to claim additional depreciation for certain property inside first year of the recovery period if placed in service via 2015 to 2019 (with one more year for certain property having a longer production period),” adds McCuller. “For property placed in service in 2015, 2016 along with 2017, the bonus depreciation is actually 50 percent. For 2018, the idea drops to 40 percent; for 2019 the idea goes to 30 percent.”
In some other words, if you purchased or leased fresh hardware or software for your business, for example, you can depreciate half the cost as part of “bonus depreciation.” For 2017, the idea may be in your best interest to invest inside most up-to-date equipment possible.
Tighter filing deadlines
Filing deadlines have been changed in order which flow-through entity return deadlines are due prior investor return deadlines. This kind of means which partnerships along with S-corporations operating on a calendar year will have a fresh deadline of March 15. The deadline for calendar year based C-Corporations will be pushed via March 15 to April 15.
Below is actually a the complete list of modifications to deadlines for each state.
Furthermore, if your business provides health benefits then please note which the deadline for Form 1095, which is actually the proof of insurance coverage, will be on January 31. Also take note which hard filing deadlines have been imposed for Forms 1094-B along with 1095-A, B along with C. These are due by February 28 by mail or by e-file on March 31.
fresh partnership audit rules
Effective in 2018, partnerships could be liable at the entity, as opposed to partner level for audit related tax collections. This kind of change will have a significant impact on how partnership interests are valued along with transferred. Because they’re also so complex, the idea’s best to speak to your tax advisor for additional information.
Expanded eligibility for R&D tax credit
Until the PATH Act, the development of internal use software was not eligible for the research along with development tax credit.
Organizations, particularly in construction, software, manufacturing, wine, aerospace subcontracting, boat building along with biotech, can qualify due to This kind of credit if they have engineers, scientists or product development personnel on staff.
some other qualifications include software which is actually innovative along with can be commercially sold.
Tom Sanger, a partner with accounting along with advisory firm Moss Adams, says which, “modest businesses, at This kind of point defined as having an average of less than $50 million in gross revenue over the prior three years, will be able to offset (the alternative minimum tax ) AMT with R&D credits generated after Jan. 1, 2016.”
“This kind of provision opens up the credit to modest corporations subject to the AMT, as well as pass-through entities (where the credits flow through to shareholders),” Sanger adds. “inside past, these credits were suspended along with carried forward for up to 20 years until they were no longer subject to the AMT.”
Pending estate planning modifications
“The IRS has proposed modifications inside rules for how minority stakes in family-owned businesses are valued when owners transfer interests to the next generation during their lifetimes,” explains McCuller. “The modifications have not been finalized, along with business owners who have been considering passing along part of their ownership interests may want to consult with their tax advisors about accelerating those plans to take advantage of current rules.”
Possible tax laws under President Trump
In addition to the modifications listed above, business owners should also pay attention to the tax laws which may take effect under President-elect Donald Trump.
For starters, “The Trump plan might reduce the corporate tax rate via a maximum rate of 35 percent to a rate of 15 percent (the GOP Blueprint calls for a U.S. corporate rate of 20 percent),” says accounting, tax along with consulting firm Elliott Davis Decosimo. Also, “U.S. manufacturers might be able to fully expense fresh plant along with equipment investments, though by doing so might forego any deduction for net interest expense.
“Most tax credits, some other than the research credit might be eliminated. For U.S. taxpayers with foreign subsidiaries, there might be a one-time deemed repatriation tax of 10 percent on foreign earnings of those subsidiaries.”
This kind of could have major tax consequences for modest businesses. In fact, Trump’s tax reform will most likely benefit the wealthy along with large corporations as opposed to SMBs.
(By John Rampton)