IRS: Several tax law changes may affect the bottom line of many business owners
With just a few months left in the year, the IRS is highlighting important information for small businesses and self-employed individuals to help them understand and meet their tax obligations. Here are several changes that could affect the bottom line of many small businesses:
Qualified Business Income Deduction - Many owners of sole proprietorships, partnerships, trusts and S corporations may deduct 20% of their qualified business income.
Temporary 100% expensing for certain business assets - Businesses are now able to write off most depreciable business assets in the year the business places them in service.
Fringe benefits – Deductions have changed for entertainment and meals, qualified transportation, bicycle commuting reimbursements, qualified moving expenses reimbursements, and employee achievement awards.
Estimated Taxes Individuals, including sole proprietors, partners, and S corporation shareholders, may need to pay quarterly installments of estimated tax unless they owe less than $1,000 when they file their tax return or they had no tax liability in the prior year (subject to certain conditions). More information about tax withholding and estimated taxes can be found on the IRS’s Pay As You Go web page as well as in Publication 505, Tax Withholding and Estimated Tax. Publication 505 has additional details, including worksheets and examples, which can help taxpayers determine whether they should pay estimated taxes. Some affected taxpayers may include those who have dividend or capital gain income, owe alternative minimum tax or have other special situations. See www.IRS.gov/taxreform
for more information about these and many other tax law changes.