Tax law changes to have impact on business owners
BY MARY CURRIE
Monday, August 6, 2018
The ability for businesses to use the Tax Section 1031 to defer taxes on exchange of property, other than real estate, has been eliminated under the new tax laws.
Under the old tax law, a business could trade in a piece of equipment for another one; could do so and not have to pay taxes on the trade in. This is a big change for businesses — you need to talk to your tax professional prior to trading equipment to see how it will impact you.
Moving expenses when you relocate to a new job is no longer deductible under the new tax laws, except for active-duty military personnel. Any employer moving reimbursement is now going to be taxable.
There have been various changes to depreciation and expensing rules for bonus depreciation, farm property, real property, Section 179 property and vehicle depreciation limits. For more details on these changes, call your tax professional. You can also do research on irs.gov website, for additional information.
Retirement — a subject I was not planning on writing about this week, however, I saw this weekend a scary statistic: 51 percent of employees do not participate in a retirement plan offered by their employer. From what I see, this picture is much worse with self-employed people. This subject is too important not to go into a little more detail.
Readers, please look at your financial situation and know that you do not want to try and live just on Social Security income. If you don’t believe me — just ask someone who does. Start investing in your retirement plan today. No matter how small you have to start, just start. Set aside these retirement funds first, these funds will grow over time, and you will be amazed at how your retirement fund will give you peace of mind and with much less “pain” than you thought.
There are various types of retirement plans such as 401K, IRA, Roth IRA, Simple IRA, etc. Retirement contributions have the potential to save you tax dollars now and provide funds later when you need them. If you have more questions or need help in deciding when type is for you, ask the HR department at work or ask your tax professional for suggestions of where and how to start.
Remember, take that first step today!
The information in this article is general in nature and should not be acted upon without first checking to determine its applicability to your situation.
Mary Currie is a certified public accountant practicing in Rocky Mount.