Tax Changes 2018


The new Tax Reform Laws will change how your business does it taxes for 2018 and how you and your employees track and claim your expenses.

After attending a morning seminar hosted by our auditor, Schenck, I wanted to outline a few business takeaways I think will affect you most today. As complicated and unclear as the changes are, this may be a year for you to seek advice from the professionals. By the way… We have a few tax prep places right here on Military Avenue.

*Starting Jan. 1, 2018, the deductions for meals and entertainment is pretty much gone. This pocket guide from Schenck outlines the few exceptions that are still deductible. Schenck’s Travel and Entertainment Deductions Pocket Guide You can also see their website at Schenck.com for more info.

The corporate tax rate is down to 21% from 37%. Good news for you! There is a difference between the benefits for C corporations vs S corporations but I cannot begin to explain it. IRA distribution direct to charity is allowed for those 70.5 or older and e-filing for all businesses has been made easier.

On the individual side, a person will no longer be able to accept or claim moving expenses without including it as income, except for active duty military personnel. No alimony deduction can be claimed either. Other provisions in education costs for 529 plans were expanded as well as doubling the allowed estate and gift tax.

In each scenario that Schenck presented, people and businesses would reduce their taxes except in the case of an individual owning lots of property since the property tax deduction is cut. (This would be an uncommon case.) Because the overall tax brackets changed and the standard deduction doubled, individuals will most likely not itemize their deductions at all and still benefit from taking the increased standard deduction.

That said, most all of these changes are set to change again, or expire and go back to where we were in 2017 in a few years. Stay tuned. The State of Wisconsin taxes will outline changes soon, due to the federal changes.

I don’t claim to be any expert and that is my take on the tax situation. Leah Weycker, Executive Director of Military Avenue, Inc.