Under the new tax law, additional restrictions are being implemented for meals and entertainment deductions. Code Section 274(e) states that meals and entertainment expenses incurred or paid after December 31, 2017 will not be deductible with a few exceptions. Specifically, “expenses for recreation, social, or similar activities primarily for the benefit of the taxpayer’s employees, other than highly compensated employees” [...]

Tax reform (Public Law 115-97) includes winners and losers. Employers who for their convenience provided business meals for their employees are losers—50 percent losers to start and then total losers later. Meal costs that were 100 percent deductible for perhaps a half century or more are now limited to 50 percent, and that 50 percent becomes a big fat zero [...]

Here’s a story about Ronnie Craft, who lost his court case but whose story brings up an interesting point when it comes to tax planning. Ronnie Craft owned 50 percent of an S corporation. Both he and the other owner took salaries of $50,000 a year from the S corporation. The corporation adopted a resolution requiring Ronnie to pay for [...]

When you first see that 21 percent tax rate for the C corporation, you have to think that this could be the choice of entity for your business operation. Further, when you find yourself in the out-of-favor group for the 20 percent deduction, you naturally gravitate to thinking about the C corporation, perhaps as a means of getting even. Let’s [...]

Does your rental property activity meet the definition of a trade or business activity? If yes, your rentals produce the best possible tax benefits. In general, you report your rental properties on Schedule E of your tax return. When your activity rises to the level of a business, you continue to report the rentals on Schedule E, but with the [...]