Tax Advantages


  The recent tax reform, known as the Tax Cuts and Jobs Act (TCJA), added some good benefits to your real estate rentals, both commercial and residential. Notably, your qualified business income from your real estate rentals creates a possible 20 percent tax deduction with no effort on your part. And if you want less taxable income, the TCJA gives you enhanced bonus depreciation and new avenues for Section 179 expensing.  ...

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  You likely have heard conflicting information on the deductibility of business meals with clients and prospects. I have spent time researching this issue, and my conclusion is that tax reform eliminated tax deductions for business meals with clients and prospects.   Before the 2017 The Tax Reform Act there were two conditions to client and prospect meals:   Required you to establish that the meal was directly related...

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Finally, lawmakers did the right thing by increasing the luxury auto depreciation limits on business cars. The old luxury limits were unrealistic, punitive, unfair, and discriminatory against any car that cost more than $15,800. The new limits don’t create parity in all respects, but they are a big improvement. If you bought a car in 2017 and paid more than $15,800, you were driving a luxury car that lawmakers punished you for by...

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You may be thinking when you see the 21 percent tax rate for the C corporation, this is the best choice of entity for your business operation. In addition, when you find yourself in the out-of-favor group for the 20 percent deduction for S Corporations, you naturally gravitate to thinking about the C corporation, perhaps as a means of getting even. The table below gives you a good look at how you would pay taxes on your profits,...

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  Cost segregation breaks your real property into its components, some of which you can depreciate much faster than the typical 27.5 years for a residential rental or 39 years for nonresidential real estate. When you buy real property, you typically break it into two assets for depreciation purposes: • land, which is non-depreciable; and • building (residential is 27.5-year property; nonresidential is 39-year property). With a...

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