This time of year, you can count on a few things…the Superbowl countdown is on, the Rose Parade is not rained out, and YOUR TAXES will need to be filed soon. As your company prepares for its tax return, here’s a few things to keep in mind.
Federal tax rates are down! C Corporations now have a flat tax rate of 21%. The previous rates ranged from 15% – 34%. Individual tax rates were previously as high as 39.6%. For 2018, the maximum rate is 32%. There is a new Qualified Business Income Deduction which has the potential of reducing some types of income by 20%. The types of income that may be eligible for reduction include income generated by a Sole Proprietorship, S Corporations, Limited Liability Companies, and Partnerships. Rental income may also be subject to the 20% reduction. Add to this new accelerated depreciation options (see November’s Nerd News) and you can be scratching your head in frustration while preparing your return. AHH!
Changes to long-standing tax law may have less than desirable results. Net operating losses can no longer be carried back and carried forward amounts will have some additional limitations. Like-kind exchanges will no longer apply to motorcoach purchases but will still apply to real property.
This sounds complicated to most business owners; which is OK because it is!
Are you assisted by a CPA professional, especially one that knows the transportation industry? Are you estimating your taxes along with your budgeting process? How about asset additions and the effect on taxes?
Let us at BUSBooks help you get the most benefit out of the tax law changes effecting your 2018 tax returns and your long term tax planning.
The next Nerd News will discuss helpful federal tax credits that may reduce your costs or add some more cash to your bank account.
Written by Tracy Fickett, CPA and Peter Shelbo, Veteran Bus Operator
BUSBooks is a unique CPA accounting firm dedicated to the motorcoach industry.