The Tax Reform and Jobs Act changed the tax treatment of certain self-created intangible property. This leads to an important question. Does tax reform affect goodwill created or acquired in a business? Some say that the value of goodwill, when a business is sold, could now be considered ordinary income. If so, this could create a huge tax-hit for S and C corporation owners … [Read more...]
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How to deal with the qualified improvement property snafu
As part of the Tax Cuts and Jobs Act, Congress created the qualified improvement property category. It was intended to let you fully expense qualified property with bonus depreciation. Unfortunately, Congress made a drafting error in the law which means you can’t use bonus depreciation for qualified improvement property. But don’t let that get you down. We’ll explain how … [Read more...]
What tax reform did to your tax-free “supper money”
It’s a sad fact… The Tax Cuts and Job Act took a big bite out of a bunch of valuable business-meal and entertainment deductions. One really nice one that that took a 50-percent hit was the “supper money” deduction. What is that? It’s the fringe benefit that lets you provide your employees (and yourself!) with tax-free meal money when you’re working late. That’s right. … [Read more...]
Tax reform attacks IRA “recharacterization”
Thinking about moving your retirement money to a Roth IRA? Be careful before you do! You see, when you convert a traditional IRA to a Roth IRA, and then reverse the transaction (by switching the account back to traditional IRA status), the reversal is characterized by the IRS as a “recharacterization.” If you have a sizable accumulation in your traditional IRA, the … [Read more...]
Tax reform’s effect on partnerships and LLCs
The Tax Cuts and Jobs Act made a number of changes that affect multi-member partnerships and LLCs. Most of these changes will put a smile on your face, but a few may cause some frowns. How will your business fare under the new law? We’ll tell you the good, the bad, and the ugly when you read my new article titled Tax Tips: TCJA Changes Affecting Partnerships and LLCs and … [Read more...]