The TCJA was signed into law at the end of 2017.
The IRS has been working throughout 2018 on this major piece of tax legislation, issuing
proposed regulations, notices, memos, FAQs and more to help businesses make sense of all the changes. Check out the IRS’s Businesses tax reform page for updates and resources on how these changes affect your business.
New laws and regulations could have an impact on how you manage your business or tax planning. Below is a summary of important developments you should be aware of:
- The Domestic Production Activity Deduction (DPAD) was repealed for tax years beginning after Dec. 31, 2017.
- Entertainment expenses are no longer deductible. You may continue to deduct 50% of the cost of business meals if you (or your employee) are present at the event and the food or beverages aren’t considered lavish or extravagant.
- You can claim a larger 100% first-year depreciation deduction on qualified property (new or used). The new law increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million.
- The carryback of net operating losses (NOLs) is repealed effective for tax years ending after Dec. 31, 2017; NOLs can now be carried forward indefinitely. In addition, NOLs generated after 2017 cannot reduce taxable income by more than 80%.
We’re here to help you navigate the changes and ensure you receive the most favorable tax treatment.