Business Tax Deductions Course:

Section 5, Entertainment Not Subject to the 50 Percent Cut 

As part of tax reform, lawmakers have eliminated business deductions for directly related and associated entertainment effective January 1, 2018. You can no longer deduct entertainment that has as its mission the generation of business income or other specific business benefit. Learn more.

But good news: The IRS recently clarified that client and prospect business meals continue to be deductible.

• Here's a helicopter view of meals and entertainment after tax reform.
• You may continue to deduct 50 percent of some specific entertainment expenses.
• Employee meals that were previously 100 percent deductible are now only 50 percent deductible effective January 1, 2018.
• Tax reform eliminated the 100 percent business deduction for charity golf and other special charitable sporting events.
• Presentation expenses continue as 100 percent business expense deductions.

Section 6, Strategies to Capture More Entertainment Deductions 

See updates to Section 5, above.

Section 24, Should You Use IRS Mileage Rates or Actual Expenses? 

The 2018 standard mileage rate for business miles driven is 54.5 cents a mile and the depreciation component inside the 54.5 cents that reduces your basis in the mileage rate vehicle is 25 cents per mile in 2018.

The luxury auto limits have increased for 2018 as follows:

Tax Year Amount

1st Tax Year $10,000 (plus additional $8,000 bonus depreciation)

2nd Tax Year $16,000

3rd Tax Year $9,600

Each Succeeding Year $5,760

Learn more: Tax Reform Allows Bigger, Faster Business Car Deductions.

Section 25, Avoid Taxes with Section 1031 Exchanges of Vehicles 

Beginning January 1, 2018, tax reform no longer allows Section 1031 exchanges on personal property such as your business vehicle.

However, tax reform now enables you to convert your business vehicle to personal use and qualify for up to 100% depreciation.

Section 31, Save Big Tax Dollars--Hire Your Dependent Children

Tax reform eliminated personal exemptions for taxable years after December 31, 2017, and before January 1, 2026, which makes your child worthless to you on your Form 1040. However, the new $12,000 standard deduction offers increased benefits for your family, if you are in a position to hire your children.

Section 34, Choosing the Right Business Entity Can Be Critical to Your Business Health 

Beginning January 1, 2018, you may qualify for an additional deduction under Section 199A if you operate as a flow-through entity (sole proprietorship, partnership, or S corporation).

Phaseout limits.

"Specified service trade or business".

New regulations benefit out-of-favor service businesses.

How to find your 199A deduction with multiple businesses.

Resources 

Tax Diary System (PDF) Tax Diary System Summary Sheet (Excel) Sample Section 105 Medical Plan (Word)