Here’s some good news about the Tax Cuts and Jobs Act (TCJA)… The TCJA has retained the 100-percent tax deduction for qualified employee parties and qualified employee entertainment facilities. Interestingly, if you provide a meal for your employees during a training program, you can deduct only 50-percent of the cost. But if you know the rules, you can take your … [Read more...]
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How to Calculate and Improve Your QBI from a Partnership
It’s great to be able to claim the Section 199A deduction. It’s not so great trying to calculate the deduction. Frankly, it’s a bear. In order to clarify things, we’ll explain how the Section 199A qualified business income (QBI) calculation works in the case of a general partner who had guaranteed payouts for services and health insurance premium payments. If you are … [Read more...]
Tax reform creates huge hazards when you loan money to your corporation
Making loans to your corporation became a lot more hazardous back in 1986 thanks to the Tax Reform Act passed that year. But you ain’t seen nothin’ yet… The new Tax Cuts and Jobs Act makes things far worse for tax-years 2018 through 2025! We’ll tell you exactly what lawmakers did when you read my new article titled Tax Tips: TCJA Tax Reform Creates Big Hazard in Loans to … [Read more...]
The IRS issues final Section regulations and defines QBI
Good news! The IRS has finalized its regulations of Section 199A of the tax code. Which means you may be eligible for a tax deduction worth up to 20-percent of your qualified business income (QBI)! With the issuance of this final version of the rules, Uncle Sam has provided a clear definition of your qualified business income so you can now file your tax return standing on … [Read more...]
IRS clarifies net capital gains in final 199A regulations
As you may know by now (and you’ll certainly know if you’re a regular reader of the Tax Reduction Letter), the new tax code Section 199A can give you a fat deduction of up to 20-percent of your taxable income reduced by net capital gains. The problem was, until recently, the IRS never provided a definitive definition of “net capital gains.” Well, the fog has lifted and … [Read more...]