Tax Cuts and Jobs Act Changes Are Afoot
The Tax Cuts and Jobs Act of 2017 (TCJA) changed the rules regarding how businesses can deduct expenses related to food and entertainment. Prior to the TCJA, business could deduct 50% of entertainment expenses if directly associated with the conducting of business. Now, 50% of non-extravagant business meals are still deductible, but entertainment expenses no longer are. Details can be found here, until further clarification is forthcoming.
Additionally, the IRS encourages small business owners and other taxpayers to get informed and be prepared for the TJCA changes going into effect. The new law may change tax rates and impact the required quarterly estimated tax payments. Pass-through businesses, small C-Corporations, Schedule C filers, and farmers are all affected by the new law.
The backup withholding rate has changed from 28% to 24%, effective January 1, 2018. The IRS encourages small business and other payers to review the recently updated backup withholding publication. Backup withholding usually applies when an incorrect Taxpayer Identification Number (TIN) is used, or certain interest, dividends, rent or other income is incorrectly reported. More information is available here.
Hurricane Michael Victims Offered Tax Relief
The IRS has extended the October 15, 2018 deadline for those affected by Hurricane Michael. Individuals and businesses who had filed for an extension through October 15 will now have until February 28, 2019 to file their 2017 tax return. Other upcoming deadlines have also been extended, and details on those, as well as links to the IRS’ disaster relief and Hurricane Michael information can be found here.
Additional counties have been offered this tax relief in Florida, as well as areas in Georgia, North Carolina, South Carolina, and Virginia.
IRS Waives Dyed Fuel Penalty in Florida
Similar to their response to Hurricane Florence, the IRS is waiving the penalty for use or sale of dyed diesel fuel in areas where Hurricane Michael has caused fuel shortages. Dyed fuel is generally used in farm equipment, for heating, or public transportation, and is not taxed. Those who use or sell the dyed fuel for highway use will still owe the 24.4 cents per gallon, but will not be subject to additional penalties. This waiver is in effect until October 26, 2018.
Low-Income Housing Requirements Temporarily Suspended for Hurricane Victims
The IRS is temporarily lifting certain requirements of low-income housing. Owners and operators of low-income housing anywhere in the US will be allowed to provide temporary, emergency housing for displaced individuals, regardless of income. This is not a requirement for low-income housing projects, but should owners and operators choose to assist this way, special rules apply.