| Dale K. Cline, CPA, PLLC
CERTIFIED PUBLIC ACCOUNTANT
P.O. Box 3966
Suite 101, 1333 2nd St. N.E.
Hickory, NC 28603-3966
TAX INFORMATION FOR BUSINESSES
This is a list of selective individual tax items and should not be relied upon without a professional analysis of how any of these items may apply to a specific situation.
"C Corporations" and "Personal Service Corporations" have a new 21% Flat Tax Rate effective in 2018. "Pass-through entities" such as S-Corporations, Partnerships, Sole Proprietors, Trusts, and Estates may qualify for the "New 20% Deduction" for qualifying income.
BUSINESS PROPERTY: Maximum expensing amount for new or used qualifying property in service under IR Code Sec. 179 is $510,000, ($2.030 Million investment limit) for 2017. The "New Tax Law" expanded the 179 deduction limit to $1 Million and increased the phase-out amount to $2.5 Million for 2018 and these caps will be indexed for inflation after 2018. (North Carolina limits the 179 depreciation deduction to $25,000 with an investment limit of $200,000 the first year and allows 20% deduction over the next 5 years for the remainder)
Bonus Depreciation for qualifying new property is 50% for 2017 and increases to 100% to include used property under the "New Tax Law".
Please note that there are many provisions in the current law for 2017 as well as the "New Tax Law" for 2018 affecting depreciation of business property including automobiles, leasehold improvements, retail and restaurant property, buildings, and the list goes on and on.
HEALTH CARE REFORM LEGISLATION, Affordable Care Act (ACA) continues to be phased in through 2018 with major filing requirements for applicable employers.
APPLICABLE LARGE EMPLOYERS (ALEs) must furnish full-time employees and file copies of Forms 1095-C and 1094-C with IRS for 2015 forward. (ALE) is an employer that employed on average 50 or more employees (determined by adding together the number of full-time and the full-time equivalent employees) during each month of the "Testing Period".
ACA (Affordable Care Act) prohibits employers from subsidizing, reimbursing, or paying premiums for employees for individual market health insurance policies. The penalty for violating the market reform restrictions is critical.
WORK OPPORTUNITY, RESEARCH & EXPERIMENTATION TAX CREDITS were extended.
FAILURE to FILE timely LLC, Partnership or S-Corp. returns carries stiff penalties for partners (per partner, per month up to 12 months)
S-CORPORATION Owners' medical insurance premiums paid on behalf of the owners must be included on their W-2s to assure compliance as a deduction for adjusted gross income. ACA compliance required.
De Minimis "SAFE HARBOR" threshold for capitalizing tangible assets for taxpayers without an applicable financial statement is $2,500. These treasury regulations were established in 2014 and were intended to clarify whether certain types of expenditures should be expensed or, capitalized and depreciated.
CHARGING DEDUCTIBLE ITEMS on a credit card before your business year ends establishes the deduction even if you pay the bill the following year.
NORTH CAROLINA'S CORPORATE INCOME TAX RATE is 3% for 2017.
NORTH CAROLINA'S MINIMUM CORPORATE FRANCHISE TAX has increased to $200 for 2017.
1099 Misc has to be given to recipients and sent to the IRS by January 31. Other 1099's should be sent by January 31 but may have a later submission date to IRS. Stiffer penalties apply for failure to file correct information returns.
STANDARD BUSINESS MILEAGE RATE for 2017/2018 is $.535/$.545.
SOCIAL SECURITY WAGE BASE is $127,200 for 2017 and $128,400 for 2018. Employers will pay 6.2% in social security tax for each employee and 1.45% medicare tax on all wages.
Please be aware that tax provisions continually change and you should seek professional guidance in applying any tax provision to a specific situation.
This selective information is not intended as a formal tax opinion and should not be relied upon without an independent, professional analysis of the facts and law applicable to any information contained herein.
CAUTION: The New "Tax Cuts and Jobs Act of 2017" is generally effective starting in 2018 and impacts every individual and business taxpayer. We encourage you to contact us before implementing any tax planning strategies for 2018.
© 2010 Dale K. Cline, CPA, PLLC All Rights ReservedUpdated February 19, 2018