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Ask the Expert: I recently moved. I set up mail forwarding with the U.S. Postal Service, is there anything else I need to do?

Setting up mail forwarding is a great start, but there are a couple more steps you should take:

Under a new provision created by the Tax Cuts and Jobs Act (TCJA), for the tax years 2018 and 2019 you may qualify for a tax credit if you set up or amend a paid-family leave program. Under Section 45S of the Internal Revenue Code, employers that voluntarily offer qualifying employees up to 12 weeks of paid family and medical leave annually under a written policy, may claim the credit.

The Bureau of Workers’ Compensation (BWC) has announced a proposal to provide Ohio employers with a $1.5B rebate.  This rebate comes as the result of stronger than expected returns on investments.

The Treasury Department and the IRS have issued guidance that provides a safe harbor for calculating depreciation deductions from passenger vehicles that qualify for the 100% additional first year depreciation deduction.

Unless you’ve been hiding under a rock, you’ve probably heard about the battle between the President and Congress over funding for a southern border wall. The government “shutdown” created by the impasse has created a lot of uncertainty about many government-provided services.

Every year at this time, you start to hear more about the importance of year-end income tax planning in radio and television commentary. For many people with more complex businesses or investments, the beginning of the 4th quarter of the year signals the time to start to organize their tax documents and to set-up an appointment with their advisors to review results.

This year is different! This year, tax planning should be important to everyone, not just for those that have complex tax situations. The implementation of the Tax Cuts and Jobs Act of 2017 has impacted every taxpayer. While we have all heard about it, not everyone has an applied working knowledge of what the impact will be in the first annual income tax filing season, which begins in about three months.

Recently, proposed regulations were issued to provide some clarity concerning the new Section 199A deduction. 

As part of the Tax Cuts and Jobs Act, which became effective as of the beginning of this year, this new deduction generally provides a 20 percent deduction for a pass-through businesses (primarily partnerships and LLCs taxed as partnerships, S Corporations, Sole Proprietorships and single member LLCs) that generate Qualified Business Income (QBI). This deduction is taken at the individual level and is allowable after one takes the greater of their itemized deductions or the standard deduction.

QBI does not include wages earned by an employee, guaranteed payments paid to a partner or reasonable compensation paid to an S Corporation shareholder. 

A primer on how to navigate the changes

In the past few months, phrases like “tariffs on Chinese imports” and “trade war with China” have been  floating around in the news. The government levied a 25 percent tariff on over $50 billion of products imported from China.

On June 21, the Supreme Court handed down a landmark decision in South Dakota vs. Wayfair (“Wayfair”).   The fallout of this decision will significantly change the way online vendors handle sales and use (“S&U”) tax for out-of-state consumers going forward.  It will, therefore, also affect online consumers.  Are you impacted!?

The good news is that the Tax Cuts and Jobs Act of 2017 lowered corporate tax rates from a graduated schedule that reached 35 percent to a 21 percent flat rate. The bad news? Many business expenses are no longer tax deductible. That list includes all outlays that might be considered entertainment or recreation.

As of 2018, tickets to sports events cannot be deducted, even if you walk away from the game with a new client or a lucrative contract. The same is true if you treat a prospect to seats at a Broadway play or take a valued vendor out for a round of golf. Those outlays will be true costs for business owners without any tax relief.

Drilling down

Does that mean that you should drop all your season tickets supporting local teams? Cancel club memberships? Pack away your putter and your tennis racquet? Before taking any actions in this area, take a breath and crunch some numbers.