Lee B

Yes, as I have been saying for several years, the IRS is definitely showing signs of systemic stress due to reduced staffing and budget.

Yes, plus they are specifically mentioned in the text of the law.

Here is a summary from the Journal of Accountancy: Depreciation Bonus depreciation: The bill would extend and modify bonus depreciation under Sec. 168(k), allowing businesses to immediately deduct 100% of the cost of eligible property in the year it is placed in service, through 2022. The amount of allowable bonus depreciation would then be phased down over four years: 80% would be allowed for property placed in service in 2023, 60% in 2024, 40% in 2025, and 20% in 2026. (For certain property with long production periods, the above dates would be pushed out a year.) The bill would also remove the requirement that bonus depreciation is only available for new property. Luxury automobile depreciation limits: The bill would increase the depreciation limits under Sec. 280F that apply to listed property. For passenger automobiles placed in service after 2017 and for which bonus depreciation is not claimed, the maximum amount of allowable depreciation is $10,000 for the year in which the vehicle is placed in service, $16,000 for the second year, $9,600 for the third year, and $5,760 for the fourth and later years. Sec. 179 expensing: The bill would increase the maximum amount a taxpayer may expense under Sec. 179 to $1 million and increase the phaseout threshold to $2.5 million. These amounts would be indexed for inflation after 2018. The bill would also expand the definition of Sec. 179 property to include certain depreciable tangible personal property used predominantly to furnish lodging or in connection with furnishing lodging. It would also expand the definition of qualified real property eligible for Sec. 179 expensing to include any of the following improvements to nonresidential real property: roofs; heating, ventilation, and air-conditioning property; fire protection and alarm systems; and security systems.

Their is a new $ 500 credit available for dependents who no longer qualify for the CTC. Also the old 10%/15%/25% brackets are now 10%/12%/22%. The results vary client by client.

It's a deduction against taxable income not against SE Income.

In my state the DPAD was never recognized and has always been an add back, so Oregon could treat the pass through deduction the same way.

O K, I read the bill carefully and if the Qualified Business Income is under the Threshold Amount of MFS $ 157,500 or MFJ $ 315,000 then the limitation of 50 % of the W -2 Income is not applied. Therefore a SP with Qualified Income under the Threshold Amount would get a 20 % deduction. For S Corp there are special anti-abuse rules that would prevent an S Corp owner from taking this deduction if he took $ 0 wages.

I think you have the S Corp/PTS right. I haven't seen anything about how the SP will work

Just read a commentary on the website Tax Pro Today, that says the the bill specifically prohibits prepaying and deducting 2018 state and local income taxes, but it does not prohibit prepayment and deduction of 2018 property taxes. On the other hand, there is an article on the AICPA website that says, there is no authority supporting the prepayment and deduction of any of these taxes.

Judy, I read that section too and I agree. Plus I have seen tax experts posting the same point. I do have some clients that I will encourage to make their 4th quarter estimated payments prior to January 1st, plus other clients who pay their 2017 property taxes 1/3 in February and the last 1/3 in May, who I will encourage to pay as much as possible before January 1st. Myself, I am going to pay both my 2017 and 2018 charitable contributions this month.

Their are now news stories confirming this. Apparently this was a concession to get Senator Susan Collins vote. So we will be wrestling with the SRP for 2 more tax seasons.

Just finished recalculating my 2016 ta return under the new law. Despite my taxable income going up due the loss of my personal exemptions, the change in tax rates/brackets resulted in a $ 700 savings in my federal taxes. If I qualify for the 20 % pass thru deduction, that would save me another $ 2,000. Happy Holidays

Just been skimming thru the new tax bill. It appears that the effective date for the repeal of the Individual Mandate is not effective until tax years beginning after 12/31/18 ! Mind Blowing !

They went with senate version which allows the pass through deduction for service businesses, attorneys, accountants etc. up to MFS $ 157,500 and MFJ $ 315,000 before a phase out , limited by 50 % of W-2 Income. What I am curious about is does the deduction still apply, if your marginal tax rate is below 25 % ?

No the 15 % rate was was discarded, so small regular corporations will end up paying an additional $ 3,000 of tax every year on the first $ 50,000 of taxable income. Not very small business friendly !

I agree the cleanest way to handle this is for the S Corp to purchase the truck.

I would say that I get the "free" Kiplinger Newsletter 3 or 4 times a year.

It's not a done deal yet. The repeal is in the Senate bill but not in the House bill.

You might check out the online website " Tax Pro Today."

Clear your browser history or try a different browser.

Edsel, The problem with this strategy is that most clients are going to blame their preparer if this goes bad. Plus, it doesn't solve the problem.

Judy, I agree with the policy of banning political posts from this board, but I agree with Edsel, I think you pulled the trigger a bit too soon.

As a practical matter, the IRS does have 11,000 fewer employees and our congress keeps imposing additional mandates without any additional funding. Then everyone scapegoats the IRS for every little thing. It would be very difficult to be an IRS employee under these conditions Actually some knowledgeable observers are very concerned that the IRS may have an institutional collapse. I am afraid that this situation will get worse.

What exactly does this software do ?