See how tax reform affects your business
As a small business or self-employed taxpayer, you should understand how the new tax law could affect your bottom line.
Many owners of sole proprietorships, partnerships, trusts, and S corporations may be eligible for a new deduction – referred to as Qualified Business Income Deduction - allowing them to deduct up to 20 percent of their qualified business income.
News 2. Businesses can immediately expense more under the new law. A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the property is placed in service. 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 law suspends all miscellaneous itemized deductions that are subject to the 2 percent of adjusted gross income floor.
Therefore, the business standard mileage rate listed in Notice 2018-03, which was issued before the Tax Cuts and Jobs Act passed, cannot be used to claim an itemized deduction for un-reimbursed employee travel expenses in taxable years beginning after Dec. 31, 2017, and before Jan. 1, 2026.
Disclaimer: More information - ask your tax preparers.