With tax season winding down, here's how to prepare for next year
As we head into the hot summer months, the tax season has finally begun to wind down. But with all the changes that have happened in the tax code for the 2018 tax year, do you know how to prepare for next year's tax season?
Here's a few quick tips to help you get prepared now to save a lot of stress later on.
Are you a pass-through entity, such as a partnership, S-corp or LLC? If so, certain legal organization structures can allow you to deduct up to 20% of your business income. Considering restructuring? Investigate this part of the tax code first to take advantage of the changes.
What's up with depreciation? There have been significant changes to how depreciation works, including changes that allow you to deduct the entire value of an asset the first year it's put into service. This may make it a good year to invest in that new equipment.
Can you still deduct loan interest? Though it's still an option, there are tighter limits on how much of the loan interest that you pay that you can then write off as a business expense. This may make it worth taking a closer look at your business loan terms and consider refinancing.
Used the alternative minimum tax for corporations in the past? Unfortunately, it's been eliminated. On the bright side, corporation tax brackets have been significantly reduced, with the top bracket going from 35% to 21%.
Do you entertain your clients? If so, you may want to take a good, hard look at the changes made to meal and entertainment deductions. You can no longer deduct 100% of the cost of tickets to charitable functions, or the 50% of sport tickets or club dues
Some of the changes will still need to be sorted out as they come into effect. By keeping these suggestions in mind, you can greatly reduce the amount of stress you'll face in the 2019 tax season. But what if you're not quite sure where your company falls with the changes? At AccountRely, our business is staying on top of these changes so that you don't have to. Please feel free to contact us today and discover how the AccountRely difference can help your company succeed.