It's 2018: Have You Started Your Financial Planning Yet?
Though you're probably focused on getting your 2017 taxes in order, have you taken the time to consider how the new tax reform law will impact your company's financial planning? Here's a quick look at some of the major changes that you'll need to take into account for your 2018 financial planning.
Though it's been common to itemize expenses on your personal taxes, one area where the tax law has changed is the end of itemized deductions. If you've used this strategy heavily in the past to reduce your tax burden, you'll want to consider other options, such as reimbursement of applicable expenses from the company.
Don't rely on home equity loans for financing
Some small business owners have used home equity loans to reduce their tax burden, as the interest on these loans has been deductible in the past. No longer. However, new mortgage interest is still considered deductible within certain limits.
Invest in equipment now
Corporations can immediately write off the entire cost of new equipment, rather than depreciating it over several years. But the recovering economy means equipment will come into stronger demand, expected to nearly double this year, causing delays in delivery and increased prices all around. Buy now before this trend becomes popular.
Get a grasp on the pass-through tax cut
Though these can be a difficult issue to understand, many business owners are
working out the best way to make this work for their companies. Generally speaking, it's a cut of up to 20% of business income, but it's reflected in your company's W-2 wages as well.
Like-kind exchanges no longer work outside of real property
Though many business owners have taken advantage of swapping services with other companies, this type of exchange has now been limited to real property that is not typically held for sale, though there are exemptions.
Though April 2019 seems like a long way away, taking the time now to get your financial planning in line with the new tax reform law will help ensure your company can best benefit from the changes that law brings into effect. But what if you're not sure whether your plan will work with the new laws? At AccountRely, we're here to help. Please feel free to contact us today to get started.