401(k) Changes

The tax law changes the time frame for loan repayments from a 401(k). 401(k)’s were largely left alone in this new tax bill, which is a positive outcome for employees who contribute to their company 401(k) plans. The 2018 maximum contribution to a 401(k) plan remains at $18,500, plus a catch up of an additional … Continued

Business Owners: Pass-Through Income, Deduction, and Tax Rate

Owners of pass-through businesses get a break – but it’s complicated. Beginning in 2018, a new 20% deduction for qualified business income will be available. This will effectively lower the top tax rate of small business owners from the highest new personal income tax rate of 37% to about 30%. This was a partial concession … Continued

Business Owners: Debt Interest Payments

The new tax law puts a cap on the amount of debt interest cost most companies can deduct. Interest payments have long been deductible for companies, but the new tax law now limits such deductibility to 30% of the company’s EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). This will effectively reduce the incentive for … Continued

Depreciation and Section 179 Expensing

The tax law allows companies to immediately write off 100% of equipment purchases. One of the most impactful provisions of the new tax law for mid to large size businesses is that equipment purchases can be deducted immediately, and for the full amount of the purchase, in the first year of its use. In other … Continued