Posted on 12/31/2017 2:27:17 PM PST by spintreebob
LA Times - so I figured it wasn’t the “loophole” that let’s you deduct California state taxes from federal income taxes.
That “hole” just closed!
This provision is not a loophole, there is no ambiguity in the language that would lend itself to abuse. It is intended to do what it says, give relief to some pass through entities. I really wish these ‘“journalists” would spend some time learning instead of feeling...just saying.
Totally ridiculous, it’s for “S” corps that don’t qualify for the 21% rate. Probably 80% of all small business are “s” corps.
Nonsense. People are either employee or contractor based on common law principles developed over centuries. It’s not a choice. It’s based on facts and circumstances. In fact somebody previously treated as an employee is most likely still an employee unless their job changed.
I'm a Sub-S. I cannot imagine doing my taxes with an accountant. There's 40 pages or more between all the returns. I have no idea what's in there (despite my Math degree). I just sign where to they tell me too.
ML/NJ
Yes, but it isn’t taxed at the highest rate, twice.
In other words, a small business with few employees always had the risk of being unable to pay the working owner a fair wage. Lots of small business owners would essentially work for free for several years bwfore they could receive a simple paycheck.
So they paid themselves by living off the company.
This, if true, is a very intelligent change in the tax code.
You may be eligible for new 20% deduction
https://www.nolo.com/legal-encyclopedia/how-the-republican-tax-plan-affects-landlords.html
The law does no such thing. I suspect very few employers would even want most of their employees to do this.
And keep in mind that the stupid employer mandate in ObamaCare already gave employers a huge incentive to do exactly what the authors of this slop are complaining about. This tax break actually helps those employees who got shafted when their employers cut them loose over excessive benefit costs.
It’s not a bug, it’s a feature!!
Fewer fingers in my wallet = loophole.
Honestly, I don’t care who gets the money as long as it isn’t the government. The more money that is kept out of the incompetent and/or thieving hands of bureaucrats the better.
I don't benefit much from these tax changes, but I'm not complaining about it.
Well, there is, “the gun show loophole” where you can buy a gun from a private seller. I wish the republicans would write something like an “earned ammo gun credit”
I don’t get it.... Corporate tax returns have always had to be done first before the personal returns were because the profits had to be reported on the personal returns. What am I missing?
Raycpa, thank you for that. I didn’t know that’s how it was going to work, we are in the low income portion of that new law, so if I understand it correctly, you will be able to take 20% off of your Schedule E net income before reporting it on your 1040. that would really change things because a big portion of our total income comes from the Schedule E source.
Happy New Year!
There will be a limit based on the cost of the property. Im still studying the exact computation. Waiting for a book that has yet to be published on new law by my tax research provider.
Your llc can elect to be treated as an s Corp and pay you a salary for part of your income. The remaining income would be eligible for 20% deduction.
Nephew the Lawyer already has a fix for the elimination of most of the SALT deduction in high local tax states - we sell him our house, he sells us his and we rent them back to each other at a very nominal price, thus allowing deductions of the real estate taxes as a business expense each year - a bit of fine tuning on a few of the details and we’ll be in business....
Sounds like sole props might want to consider going S corp.
hardly a loophole; simply a way to provide some of the tax reductions being offered the big C corporations to small businesses.
Forbes has an excellent article about how small “pass-through” businesses will benefit:
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