The Tax Cuts and Jobs Act has created quite a bit of confusion in the business community. Many changes have been made which may have significant impacts on your business spending, yet many are not aware of the details of the new law. We hope to shed some light on these changes in the next series of blog posts, so that you can make the necessary adjustments and prepare for operations under the new law.
In a three part series we will be covering the changes to meals, mileage, and entertainment expenses. We feel these are areas that require your immediate attention in order to make the necessary changes and gather proper documentation.
The Tax Cuts and Jobs Act bars any deduction for expenses incurred for an activity generally considered to be entertainment. The disallowance of deductions for entertainment also throws into question deductions for at least some meals. We will address these in a future blog post. We will also review the methods and documentation needed to deduct the expenses associated with the business use of a vehicle.
With so many variables regarding the deductibility of business mileage and certain meals, it is critical to maintain thorough documentation in order to protect your business and maximize deductions. Detailed documentation of business expenses will not only protect you in the case of an audit, it can also help lower the cost of your tax return preparation fee next season!
Lastly, please be mindful that some of the information covered is our interpretationof the law as currently written. As mentioned, the IRS has come out with little guidance on major changes contained in the new law. We will continue to review any and all information as it becomes available and pass updates on to all of you.
We realize that you may have specific questions related to these upcoming blog posts. As we mentioned to many of you during tax season, we will be reaching out to you between June and August to discuss the impact of the new tax law on you personally. We request that you reserve your questions for that discussion
The Teresa Campbell, CPA, PC Team