2018 – 03/02 – How to classify shareholder advances
Classifying shareholder advances is one of the gray areas in financial reporting. When deciding whether to report advances as debt or equity, ask yourself the following questions: Does management intend to repay the loan? Can the company realistically repay it? Have market-rate terms been negotiated and followed? And how is the transaction classified for tax purposes? Shareholder advances present financial reporting challenges. We can help you address those challenges and adequately disclose these transactions in your financial statement footnotes.
2018 – 02/26 – Sec. 179 expensing provides small businesses tax savings on 2017 returns — and more savings in the future
If you purchased qualifying business property by Dec. 31, 2017, you may be able to take advantage of Sec. 179 expensing on your 2017 tax return. Sec. 179 allows eligible taxpayers to deduct the entire cost of qualifying new or used depreciable property and most software in Year 1, subject to various limitations. For tax years that began in 2017, the maximum Sec. 179 deduction is $510,000. For the 2018 tax year, the Tax Cuts and Jobs Act increases the maximum Sec. 179 deduction to $1 million. Many rules apply, so contact us to learn more.
2018 – 02/27 – What’s your mileage deduction?
For 2017, you might be able to deduct miles driven for business, medical, moving and charitable purposes. For 2018, there are significant changes to some of these deductions under the Tax Cuts and Jobs Act (TCJA). Here are the standard mileage rates: Business: 53.5 cents (2017), 54.5 cents (2018). Medical: 17 cents (2017), 18 cents (2018). Moving: 17 cents (2017), 18 cents (2018). Charitable: 14 cents (2017 and 2018). But the rules are complex. And under the TCJA you might not be able to deduct business or moving miles on your 2018 return. Contact us for details.