It is said that Benjamin Franklin wrote in this world nothing can be said to be certain, except death and taxes.” While the fact that we must pay taxes is a certain, just how much we need to pay and what types of deductions and credits may apply is certainly NOT certain in 2018. With the new tax law that went into effect on January 1st, many changes took place and many deductions that many of us are used to were eliminated. However, there are also members of Congress and multiple discussions happening right now that include reinstating certain deductions as well as interpretations of the very complex guidelines as it relates to certain business deductions and calculations. So, while paying our taxes is certain, the guidance that tax professionals can provide you at this point in time is definitely not. While we are watching the rules change and trying to keep up with the new game, it is uncertain what the best play is as of now. So here is what we suggest:
- If you deducted something in the past, continue to track the amounts just in case.
- Continue to keep all receipts as this will eliminate the headache of trying to find a year’s worth of receipts next January.
- Don’t make any changes to your business based on the new tax law change at this time. It is unclear as to which tax entity (s-corp, c-corp or LLC taxed as a sole proprietor) will have the best tax advantage based on your specific situation at this time so when in doubt, keep it the same!
We are hopeful that better guidance will become available by July, 2018 and at that time, taxpayers should be able to receive a clear understanding as to what deductions are “still in the game” and how to move forward with their business tax planning.