Your 2018 Taxes
No, not your 2017 business taxes, which we will prepare before March 15th of this year. And, if you’re one of our personal income tax clients, before April 15th of this year. Nope, we’re talking about your 2018 taxes, which we will file for you in 2019.
Whether it’s us or someone else, it’s really important that you have a professional tax accountant look at how your company can benefit under the new tax laws, and then, spend or not spend accordingly in 2018. Besides spending, there may be legal structures you may wish to migrate to for your company; i.e., becoming a C-Corp instead of the LLC you are now. It could make a big difference, depending on what your company does and how much revenue it has.
And by the way, it’s not all sunshine and daffodils for business owners under the new tax laws. Some tax credits have been taken away.
As an example, business owners will no longer be able to deduct the cost of taking clients, vendors, business associates and the like to sports events, restaurants, bars, country clubs, or anything else the IRS deems as “primarily entertainment’. That is gone from your 2018 taxes. If you’re in a business that relies heavily on that that type of activity, you will need to decide whether paying the whole cost of those excursions is worth it to your business. Is there enough goodwill created there to justify the amount spent?
Another example of something subtracted is that businesses with more than $25 million in revenue will now not be able to fully deduct the interest they pay on installment loans, equipment leases, credit card debt, etc. This might lead to a different set of decisions around what to borrow, and when.
It really is in your best interests as a business owner to have a sit-down with a qualified tax professional and determine what, if anything, you might want to do differently in 2018.
Of course, we hope you choose us for that discussion. But, even if you don’t, we urge you to consider doing some tax planning for 2018.