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Released by the IRS: "The Tax Cuts and Jobs Act ("TCJA") changed deductions, depreciation, expensing, tax credits and other tax items that affect businesses. This side-by-side comparison can help businesses understand the changes and plan accordingly. Some provisions of the TCJA that affect individual taxpayers can also affect business taxes. Businesses and self-employed individuals should review tax reform changes for individuals and determine how these provisions work with their business situation. Visit IRS.gov/taxreform regularly for tax reform updates. Businesses can find details and the latest resources on the provisions below at Tax Reform Provisions that Affect Businesses. Deductions, depreciation and expensing Changes to deductions, depreciation and expensing may affect a taxpayer’s business taxes. Publication 535, Business Expenses, and Publication 946, How to Depreciate Property, explain many of these topics in detail. Deductions Deductions 2017 Law What changed under TCJA New deduction for qualified business income of pass-through entities No previous law for comparison. This is a new provision. This new provision, also known as Section 199A, allows a deduction of up to 20% of qualified business income for owners of some businesses. Limits apply based on income and type of business." Limits on deduction for meals and entertainment expenses A business can deduct up to 50% of entertainment expenses directly related to the active conduct of a trade or business or incurred immediately before or after a substantial and bona fide business discussion. The TCJA generally eliminated the deduction for any expenses related to activities considered entertainment, amusement or recreation. However, under the new law, taxpayers can continue to deduct 50% of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact. If provided during or at an entertainment activity, the food and beverages must be purchased separately from the entertainment, or the cost of the food or beverages must be stated separately from the cost of the entertainment on one or more bills, invoices, or receipts. Notice 2018-76 provides additional information on these changes. New limits on deduction for business interest expenses The deduction for net interest is limited to 50% of adjusted taxable income for firms with a debt-equity ratio above 1.5. Interest above the limit can be carried forward indefinitely. The change limits deductions for business interest incurred by certain businesses. Generally, for businesses with 25 million or less in average annual gross receipts, business interest expense is limited to business interest income plus 30% of the business’s adjusted taxable income and floor-plan financing interest There are some exceptions to the limit, and some businesses can elect out of this limit. Disallowed interest above the limit may be carried forward indefinitely, with special rules for partnerships. Changes to rules for like-kind exchanges Like-kind exchange treatment applies to certain exchanges of real, personal or intangible property. Like-kind exchange treatment now applies only to certain exchanges of real property. For more information, see Form 8824, Like-Kind Exchanges, and its instructions, as well as Publication 544, Sales and Other Disposition of Assets. Payments made in sexual harassment or sexual abuse cases No previous law for comparison. This is a new provision. No deduction is allowed for certain payments made in sexual harassment or sexual abuse cases. Changes to deductions for local lobbying expenses Although lobbying and political expenditures are generally not deductible, a taxpayer can deduct payments related to lobbying local councils or similar governing bodies. TCJA repealed the exception for local lobbying expenses. The general disallowance rules for lobbying and political expenses now apply to payments related to local legislation as well. Depreciation Depreciation 2017 Law What changed under TCJA Temporary 100 percent expensing for certain business assets Certain business assets, such as equipment and buildings, are depreciated over time. Bonus depreciation for equipment, computer software, and certain improvements to nonresidential real property allows an immediate deduction of 50% for equipment placed in service in 2017, 40% in 2018, and 30% in 2019. Long-lived property generally is not eligible. The phase down is delayed for certain property, including property with a long production period. TCJA temporarily allows 100% expensing for business property acquired and placed in service after Sept. 27, 2017 and before Jan. 1, 2023. The 100% allowance generally decreases by 20% per year in taxable years beginning after 2022 and expires Jan. 1, 2027. The law now allows expensing for certain film, television, and live theatrical productions, and used qualified property with certain restrictions. For more information, see Tax Reform: Changes to Depreciation Affect Businesses Now and New 100-percent depreciation deduction for businesses. Changes to rules for expensing depreciable business assets (section 179 property) A taxpayer can expense the cost of qualified assets and deduct a maximum of $500,000, with a phaseout threshold of $2 million. Generally, qualified assets consist of machinery, equipment, off-the-shelf computer software and certain improvements to nonresidential real property. TCJA increased the maximum deduction to $1 million and increased the phase-out threshold to $2.5 million. It also modifies the definition of section 179 property to allow the taxpayer to elect to include certain improvements made to nonresidential real property. Publication 946, How to Depreciate Property, and the Additional First Year Depreciation Deduction (Bonus) FAQs provide additional resources on this topic. Changes to depreciation of luxury automobiles There are limits on depreciation deductions for owners of cars, trucks and vans. TCJA increased depreciation limits for passenger vehicles. If the taxpayer doesn’t claim bonus depreciation, the greatest allowable depreciation deduction is: $10,000 for the first year, $16,000 for the second year, $9,600 for the third year, and $5,760 for each later taxable year in the recovery period. If a taxpayer claims 100% bonus depreciation, the greatest allowable depreciation deduction is $18,000 for the first year, and the same as above for later years. Changes to listed property Computers and peripheral equipment are categorized as listed property. Their deduction and depreciation is subject to strict substantiation requirements. TCJA removes computer or peripheral equipment from the definition of listed property. Changes to the applicable recovery period for real property The General Depreciation System (GDS) and the Alternative Depreciation System (ADS) of the Modified Accelerated Cost Recovery System (MACRS) provide that the capitalized cost of tangible property is recovered over a specified life by annual deductions for depreciation. The general depreciation system recovery periods are still 39 years for nonresidential real property and 27.5 years for residential rental property. The alternative depreciation system recovery period for nonresidential real property is still 40 years. However, TCJA changes the alternative depreciation system recovery period for residential rental property from 40 years to 30 years. Qualified leasehold improvement property, qualified restaurant property and qualified retail improvement property are no longer separately defined and given a special 15-year recovery period under the new law. Businesses with employees: Changes to fringe benefits and new credit For businesses that have employees, there are changes to fringe benefits and a new tax credit that can affect a business’s bottom line. Fringe benefit 2017 law What changed under TCJA Suspension of the exclusion for qualified bicycle commuting reimbursements Up to $20 per month in employer reimbursement for bicycle commuting expense is not subject to income and employment taxes of the employee. Under TCJA, employers can deduct qualified bicycle commuting reimbursements as a business expense. Employers must now include 100% of these reimbursements in the employee’s wages, subject to income and employment taxes. Suspension of exclusion for qualified moving expense reimbursements An employee’s moving expense reimbursements are not subject to income or employment taxes. Under TCJA, employers must include moving expense reimbursements in employees’ wages, subject to income and employment taxes. Generally, members of the U.S. Armed Forces can still exclude qualified moving expense reimbursements from their income. Prohibition on cash, gift cards and other non-tangible personal property as employee achievement award Employers can deduct the cost of certain employee achievement awards. Deductible awards are excludible from employee income. Special rules allow an employee to exclude certain achievement awards from their wages if the awards are tangible personal property. An employer also may deduct awards that are tangible personal property, subject to certain deduction limits. TCJA clarifies that tangible personal property doesn’t include cash, cash equivalents, gift cards, gift coupons, certain gift certificates, tickets to theater or sporting events, vacations, meals, lodging, stocks, bonds, securities, and other similar items. Tax Credit 2017 law What changed under TCJA New employer credit for paid family and medical leave No previous law for comparison. This is a new provision. The TCJA added a new tax credit for employers that offer paid family and medical leave to their employees. The credit applies to wages paid in taxable years beginning after December 31, 2017, and before January 1, 2020. The credit is a percentage of wages (as determined for Federal Unemployment Tax Act (FUTA) purposes and without regard to the $7,000 FUTA wage limitation) paid to a qualifying employee while on family and medical leave for up to 12 weeks per taxable year. The percentage can range from 12.5% to 25%, depending on the percentage of wages paid during the leave. For more information on the new credit, see Notice 2018-71 and New credit benefits employers who provide paid family and medical leave. Business structure and accounting methods An organization’s business structure is an important consideration when applying tax reform changes. The Tax Cuts and Jobs Act changed some things related to these topics. Business structure topic 2017 law What changed under TCJA Changes to cash method of accounting for some businesses Small business taxpayers with average annual gross receipts of $5 million or less in the prior three-year period may use the cash method of accounting. The TCJA allows small business taxpayers with average annual gross receipts of $25 million or less in the prior three-year period to use the cash method of accounting. The law expands the number of small business taxpayers eligible to use the cash method of accounting and exempts these small businesses from certain accounting rules for inventories, cost capitalization and long-term contracts. As a result, more small business taxpayers can change to cash method accounting starting after Dec. 31, 2017. Revenue Procedure 2018-40 provides further details on these changes. Changes regarding conversions from an S corporation to a C corporation In the case of an S corporation that converts to a C corporation: Net adjustments that are needed to prevent amounts from being duplicated or omitted as a result of an accounting method change and attributable to the revocation of the S corporation election (e.g. adjustments required because of a required change from the cash method to an accrual method): net adjustments that decrease taxable income generally were taken into account entirely in the year of change, and net adjustments that increase taxable income generally were taken into account ratably during the four-taxable-year period beginning with the year of change. Distributions of cash by the C corporation to its shareholders during a post-termination transition period (generally one year after the conversion) are, to the extent of stock basis tax-free, then capital gain to the extent of remaining accumulated adjustments account (AAA). Distributions more than AAA are treated as dividends coming from accumulated Earnings and Profits (E&P). Distributions after that period are dividends to the extent of E&P and taxed as dividends. The TCJA makes two modifications to existing law for a C corporation that (1) was an S corporation on Dec. 21, 2017 and revokes its S corporation election after Dec. 21, 2017, but before Dec. 22, 2019, and (2) has the same owners of stock in identical proportions on the date of revocation and on Dec. 22, 2017. The following modifications apply to these entities: The period for including net adjustments that are needed to prevent amounts from being duplicated or omitted as a result of an accounting method change and attributable to the revocation of the S corporation election is changed to six years. This six-year period applies to net adjustments that decrease taxable income as well as net adjustments that increase taxable income. Distributions of cash following the post-termination transition period are treated as coming out of the corporation’s AAA and E&P proportionally. See Revenue Procedure 2018-44 for more detailed information. Businesses or individuals that rehabilitate historical buildings Topic 2017 law What changed under TCJA Changes to the rehabilitation tax credit Owners of certified historic structures were eligible for a tax credit of 20% of qualified rehabilitation expenditures. Owners of pre-1936 buildings were eligible for a tax credit of 10% of qualified rehabilitation expenditures. TCJA keeps the 20% credit for qualified rehabilitation expenditures for certified historic structures but requires that taxpayers take the 20% credit over five years instead of in the year they placed the building into service. The 10% credit for pre-1936 buildings is repealed under TCJA. Opportunity for tax-favored investments Opportunity Zones are a tool designed to spur economic development and job creation in distressed communities. Businesses or individuals can participate. Topic 2017 law What changed under TCJA Opportunity Zones No previous law for comparison. This is a new provision. Investments in Opportunity Zones provide tax benefits to investors. Investors can elect to temporarily defer tax on capital gains that are reinvested in a Qualified Opportunity Fund (QOF). The tax on the gain can be deferred until the earlier of the date on which the QOF investment is sold or exchanged, or Dec. 31, 2026. If the investor holds the investment in the QOF for at least ten years, the investor may be eligible for a permanent exclusion of any capital gain realized by the sale or exchange of the QOF investment."

Evan, There is a setting on the board that allows you to ignore posts from people you don't like. I have used it on 2 people, one who is no longer active on the board and one who is. I don't even see that person's posts unless someone quotes them in a reply post. It has made my life immensely happier on this board. Some people, no matter what they post, just rub you the wrong way. I suggest you use that feature, even if it means you don't like me and never see my posts again. It is one of the best features Eric has put on this board. Tom Modesto, CA

Trouble making the link right! (Please don't put me on oldpeoplefacebook!) https://old.reddit.com/r/tax/

That is a handy feature. I don't use it with anyone on this forum since I'm fairly thick-skinned anyhow. But several years ago I found myself in constant conflict with someone on another forum. Not sure what it was, but something about our personalities just clashed - they didn't care for me and I didn't care for them. It happens. So I blocked them and that was the end of it. I think it was good for both of us, since neither of us needed to waste our time tossing insults at one another. I decided it's better to save that stuff for Facebook, where you can really be confident that you'll change some minds.

Moderator note - first 5 posts here were moved from another topic that was being derailed. Rita, LaVergne is simply Edsel on a client's computer. In order to post, you have to register, and the IP address of the computer in use will not allow a duplication of another name. Apologize if you were misled, there was no attempt to "hide" my identity. I think you know I would not hide behind a tree to post, even for unpopular subjects. The client's computer is in LaVergne, Tennessee. My engagement at this client will last until January when a full-time person will take over. Thus posts from "LaVergne" will be few and not last very long.

Abby, why aren't either of your links working? They both come right back around to this topic on here. Cut and paste of the address into the address bar works, so that is odd that the link itself doesn't. I used the same web address that Abby provided and this works: LINK Abby, is your linked site mostly questions from professionals or from the public with answers by pros? I ask because I noticed another one referred over at the right of that page for pros with the addition to the link "/r/taxpros" that has a different format. Which is it that you moderate?

Strangely, when filing a 1040 after being SFR'd, it shows up as "Amended Return" on the Account Transcript.

Excellent post and summary chart by cbslee that I copied from another topic to save here:

Yes, it's your only option to file a return and it is a regular return. If the IRS will give you an address, they have what they call a reprocessing unit.

He's digging for any dirt he can find?

I know of the feature - but quite frankly, there are people on the board and off the board (and formerly on the board) with whom I did NOT get along, but from whom I learned a LOT. There's a woman in our local group. I detest her (and won't bother to go in to the reasons, just assume the list is LONG) and actively try to avoid sitting anywhere near her if we're at the same meeting. But boy, oh boy, have I learned a lot from her over the years. Her ability to cite tax court cases to support positions, off the top of her head, is remarkable. (It's a real shame she's such a disgusting piece of humanity... but I digress.) I don't believe, that if you asked her, she has ANY idea of my low opinion of her. She *might* think I'm not very friendly. Think real hard about responding to someone who rubs you wrong, or blocking them. Make sure it's really worth it. It's also completely possible to get three words into a post and say to yourself, "Nope; not this one, ain't reading it" and move on.

I have a lovely friend who is not so computer savvy. She forgot her facebook password so she started another account. Eventually she recovered her old account's password but she apparently uses both accounts (one on her computer and one on her phone, I imagine). She often ends up liking my posts twice. The icing on the cake is that her profile pic on the new account is rotated 90 degrees counterclockwise. I almost posted her to https://old.reddit.com/r/oldpeoplefacebook/ but, like I said, she's a lovely friend.

I'm missing one year but do have 2006 and would be happy to help you. Please send me a PM with your address.

No, all you have to do on any other computer or device is to log in using your existing username and password. There is absolutely NO NEED to set up any other username to access this forum.

You don't have to create an account on reddit to view the content. If you're interested, I am one of the moderators on https://old.reddit.com/r/tax/ We get a lot repetitive stupid questions but, as always, I've learned things there. We also have a few IRS agents that hang out and are quite useful.

I think the archive is all you need. Thanks for your help

awesome ~ thank you

I agree with Abby Normal. Your client should definitely file a Form 1040 because the statute of limitations on assessments hasn't started until a return is filed. An SFR doesn't constitute a filing, and the return your client files will be considered an original return filed for that year.

We old people more or less on Facebook appreciate your restraint. I've never looked at reddit but might have to seek out the one you mentioned. Now, how do I do that?

And if Judy or Catherine end up not having, it, I also have an ATX CD which says "Archive Edition - Tax Year 2006".

I was so certain I had this, packrat that I am, but seem to be missing 2004-2009 disks or they have yet to be unearthed. I have my code though and do have my Parsons TY 1996! That was my first year on my own, so sentimental value. Good luck in your search.

I called ATX this morning and they can only provide back to 2012. She suggested that I ask members of the community if I could borrow a disk. I didn't ask about the licensing issue that you have proposed. However, I would argue that I have the license regardless of whose disk I am using. So - if anyone has the 2006 disk and super-secret code, I would like to borrow and mail right back to you immediately. I will pay for your mailing fees and inconvenience!! I would greatly appreciate it.

Um, also not true. A username and password will allow access to wherever you want to log in to, but you need to make sure that you trust the computer and network it is on to have that information stored in its cookies. By the way, I strongly suspected this was you just by the way your post was worded before I ever checked the profile. There's more information that Eric and I can see than the general membership has access to. Buh bye LaVergne.

First forum of this kind where I've found this to be true. A good idea, too - keeps from needless proliferation of names. Helpful post - hope others read it. "LaVergne" may die a premature death...

no - I don't know why, but it's a town superintendent buying from a local gravel pit, in nowheresville PA - if that sheds any light.

I have often found that Google will do a better search of federal OR state official sites than the embedded search engines. For example, if at MassDOR I specify that I'm looking for tax year 2014 form whatever, they first page (or three) of "hits" will be years OTHER than 2014. Not so with Google. Mostly.

Hi, LaVergne, welcome to the Board! Absent more reliable information, I would use the property assessor's ratio at sale time to assign a percentage to land at sale time. It could, and maybe even likely will, be different than the ratio was at the time of purchase. We hope that people we pay to assess property values can be relied upon for the proper ratio of land to total, even if they miss what the parcel is worth to a willing buyer. I totally understand that using the county assessor's ratio may not be ideal, but let's be honest here, my clients are not going to come up with a more accurate allocation. Nor will they hire an expert to do it. They will either throw a dart at it, try to figure out how to manipulate the ratio to their advantage, or worse, try to get me to manipulate it. No thanks, I'll go with the paid county official's opinion at the time of the transaction.

Actually, I think Sara meant the 1999 Connecticut form W-4P. Which if I Google, I can get a copy here https://www.ct.gov/drs/lib/drs/forms/1999forms/withholding/ct-w4p.pdf But the top answer is still the 2018 form here http://www.ct.gov/drs/lib/drs/forms/1-2018/wth/2018-ct-w4p.pdf And there is a HUGE difference.

Buh bye Edsel, too.