As many people are aware by now, the Tax Cuts and Jobs Act has changed the way many people have done their yearly taxes. First of all, the TCJA doubled the standard deduction, which made the standard deduction applicable to a much larger amount of people. Then to further increase the simplicity of taxes, the TCJA eliminated or restricted previous deductions, which subsequently moved more people over into the standard deduction. The good news is there are some deductions that suffered little to no change, and may have an impact on your life. First and foremost is medical expenses. The TCJA actually lowered the threshold for the percentage of your adjusted gross income of medical expenses

In the first part of the working capital post, we examined the basics of working capital and how it may help to place a value on your business. Working capital can be a good indicator of efficiency and viability of a company. Another part of working capital that is frequently examined by owners, investors, and bankers is working capital cycle. Working capital cycle is the amount of time it takes to convert net current assets and current liabilities into cash. The longer the cycle, the longer a company will have their money tied up in capital without earning any return on it. A company should always have some long-term assets and liabilities without a quick return on the capital; however,

Understanding basic concepts and how they may affect your business is a key factor to any start-up or maintaining a current company. Working capital is one of the basic concepts that owners should know and be able to calculate. Working capital at its core is defined as, “the amount of a company’s current assets minus the amount of its current liabilities,” or more simply, “a company’s available capital for daily operations at any given point in time.” The calculation for working capital is current assets minus current liabilities. Current assets come down to two accounts which are accounts receivable and inventory, current liabilities are accounts payable. Another consideration is when de

Previously we have posted and explained the changes to the federal estate taxes since the implementation of the Tax Cuts and Jobs Act. However, some people might assume that just because they are under the federal estate tax of $11,180,000, that they do not owe any estate taxes. This is not necessarily true because many states, Illinois included, have their own separate estate taxes. Illinois, like many states, has its own estate tax that is implemented at a different threshold and with different rates than the federal tax rate. For instance, Illinois has a threshold of $4 million, which is $7,180,000 less than the federal threshold. This creates a large gap between the thresholds of Ill

The IRS recently issued new guidance in order to help taxpayers determine which part of parking expenses are no longer tax deductible. Additionally, the IRS offered guidance on how tax-exempt organizations determine how these nondeductible parking expenses create or increase unrelated business taxable income (UBTI). The guidance comes late in the year so the IRS is allowing taxpayers that own or lease parking facilities to determine their amount of nondeductible expenses, so long as it is a reasonably adopted method in place. Taxpayers without a reasonable method may rely on the newly issued guidance by the IRS until a new regulation is in place. A large part of the guidance is the special

The Tax Cuts and Job Act brought in plenty of changes from 2017 and 2018. One of the largest changes was to the federal estate tax, which was essentially doubled. The estate tax was raised from $5,490,000 in 2017, to $11,180,000 in 2018. But how does the estate tax work, and does it affect you? The beginning dates back to 1916 when the United States government imposed a tax on estates of decedents. It the century since then it has evolved into what we see today. A tax that is placed on certain families and individuals that have estate that cross over the threshold. The current threshold of $11,180,000 for the tax year of 2018, is much too high to effect vast majority of Americans. The

Farmers are a mainstay of the American economy, and are frequently treated a little differently come tax season. Farmers may have specific rules or exceptions that apply to them, that won’t apply for other businesses. Therefore, when tax season rolls around, farmers will need to be well equipped to deal with any potential issues that arise with their taxes or at least remembering the variables that can affect their tax filings. Here are some things to keep in mind if you are a farmer filing for the tax year: If you have crop insurance proceeds, these will count as income. They will usually need to be reported on your income statement in the year they are received. Deductible farm expenses

With a new tax year, there is new guidance being issued for the new year. Specifically speaking, the IRS has addressed guidance for taxpayers that allows them to generally deduct 50% of the food and beverage expenses associated with operating their business. According to the IRS, the amendments that were put in place by the TCJA were ambiguous when speaking toward the deductions on meals. The deductions did speak toward the denial of deductions for expenses on entertainment, amusement, or recreation in the workplace, but did not place a deduction on the expenses for business meals. Business meal deductions can be found in Sec. 274(k), a part which was not changed by the TCJA. The deductio