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Small Business Tax Q&A: February ’18

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in Small Business Tax

Find loophole for state tax prepayments

Q. I prepaid my property taxes in December. Are the prepayments deductible on my 2017 return? A.B., Millburn, N.J.

A. Presumably, yes. The new Tax Cuts and Jobs Act (TCJA) limits deductions for state and local taxes (SALT) to $10,000 annually and doubles the standard deduction. As a result, many taxpayers who will itemize in 2017 will probably claim the standard deduction instead in 2018, so they prepaid their property taxes at year-end. The TCJA bans 2017 deductions for prepayments of state and local income taxes, but not state and local property taxes. As of this writing, you appear to be in line for an increased 2017 deduction, assuming the taxes were assessed prior to 2018.

Tip: Expect to hear more from the IRS on this issue.

No deduction for shareholder travel

Q. I attended a stockholder meeting in Canada last year. Can I still deduct my travel expenses as miscellaneous expen...(register to read more)

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