e-News for Small Business Issue 2018-38

 

e-News for Small Business Nov. 20, 2018
Tax Resources for Small Business Small Business and Self-Employed One-Stop Resource Small Business Forms & Instructions Small Business Events Small Business Webinars e-File for Businesses and Self-Employed Businesses with Employees Small Business Products Self-Employed Individuals S Corporations Other Resources IRS.gov Find it Fast! All Forms and Instructions Filing Your Taxes Make a Payment Taxpayer Advocate Service Retirement Plans Tax Information for Charities and Other Non-Profits State Links SSA/IRS Reporter IRS Social Media	e-News for Small Business, Issue Number 38 Inside This Issue New tax law allows small businesses to expense more, expands bonus depreciation Important news for U.S. residency certification applicants 1.  New tax law allows small businesses to expense more, expands bonus depreciation In a November 15 news release, the IRS reminded small business taxpayers that changes to the tax law per the Tax Cuts and Jobs Act (TCJA) mean they can immediately expense more of the cost of certain business property. Many are now able to write off most depreciable assets in the year they are placed into service. Section 179 expensing changes A taxpayer may elect to expense all or part of the cost of any Section 179 property and deduct it in the year the property is placed in service. The new law increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million. These changes apply to property placed in service in taxable years beginning after December 31, 2017, and will most likely affect 2018 business tax returns filed next year. See New rules and limitations for depreciation and expensing under the Tax Cuts and Jobs Act for more information. New 100 percent, first-year 'bonus' depreciation The 100 percent depreciation deduction generally applies to depreciable business assets with a recovery period of 20 years or less and certain other property. Machinery, equipment, computers, appliances and furniture generally qualify. The law also allows expensing for certain film, television, and live theatrical productions, and used qualified property with certain restrictions. See the proposed regulations for more details. Taxpayers may elect out of the additional first-year depreciation for the taxable year the property is placed in service. If the election is made, it applies to all qualified property that is in the same class of property and placed in service by the taxpayer in the same taxable year. The instructions for Form 4562, Depreciation and Amortization, provide details. Business owners can refer to the Tax Reform Provisions that Affect Businesses page for updates. More resources: Publication 535, Business Expenses Publication 946, How to Depreciate Property Additional First Year Depreciation Deduction (Bonus) FAQs Tax Cuts and Jobs Act: A Comparison for Businesses Back to top 2.  Important news for U.S. residency certification applicants A U.S. Residency Certificate is an important tool that resident individuals and corporations can use to alleviate their foreign withholding tax. Beginning December 1, the user fee for non-individual taxpayers who file Form 8802, Application for United States Residency Certification, will increase from $85 to a flat fee of $185 per application. This increase will not affect individual taxpayer applications, which will remain $85 each. See IRS.gov for more details. Back to top                         Thank you for subscribing to this IRS e-mail service. This message was distributed automatically from the mailing list e-News For Small Business. Please Do Not Reply To This Message.

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