A Small Appliance Company Is Interested In Comparing the old and new tax laws to plan business taxes effectively. compare.edu.vn provides a detailed comparison of the Tax Cuts and Jobs Act (TCJA) and its effects on deductions, depreciation, expensing, fringe benefits, credits, business structure, and accounting methods, helping you to understand the changes. Gain clarity on how the TCJA impacts your business taxes, qualified business income, and tax-favored investments by leveraging our side-by-side analysis, helping you make informed financial decisions.
1. Understanding Deduction Changes Under TCJA
The Tax Cuts and Jobs Act (TCJA) brought about significant alterations to the landscape of business deductions. Let’s delve into a detailed side-by-side comparison of the deduction-related changes introduced by the TCJA.
| Deductions | 2017 Law | What Changed Under TCJA |
|---|---|---|
| New Deduction for Qualified Business Income (QBI) of Pass-Through Entities | No previous law for comparison. This is a new provision. | This provision, 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. 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 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. |
| Excess Business Loss | Excess farm losses (defined below) aren’t deductible if you received certain applicable subsidies. This limit applies to any farming businesses, other than a C corporation, that received a Commodity Credit Corporation loan. Your farming losses are limited to the greater of: $300,000 ($150,000 for a married person filing a separate return), or The total net farm income for the prior five tax years. (Publication 225 Page 25 – 3rd column) | Noncorporate taxpayers may be subject to excess business loss limitations. The at-risk limits and the passive activity limits are applied before calculating the amount of any excess business loss. An excess business loss is the amount by which the total deductions attributable to all of your trades or businesses exceed your total gross income and gains attributable to those trades or businesses plus $250,000 (or $500,000 in the case of a joint return). A “trade or business” includes, but is not limited to, Schedule C and Schedule F activities, the activity of being an employee, and certain activities reported on Schedule E. (In the case of a partnership or S corporation, the limitation is applied at the partner or shareholder level.) Business gains and losses reported on Schedule D and Form 4797 are included in the excess business loss calculation. Excess business losses that are disallowed are treated as a net operating loss carryover to the following taxable year. See Form 461 and instructions for details. For application of these rules to farmers, see also Publication 225 and Instructions to Schedule F. |
| Net Operating Loss (NOL) | Generally, if you have an NOL for a tax year ending in 2017, you must carry back the entire amount of the NOL to the 2 tax years before the NOL year (the carryback period), and then carry forward any remaining NOL. (2017 Pub 536 page 3, 2nd column) If your NOL is more than the taxable income of the year you carry it to (figured before deducting the NOL), you generally will have an NOL carryover to the next year. (2017 Pub 536 page 4, 3rd column) | Most taxpayers no longer have the option to carryback a net operating loss (NOL). For most taxpayers, NOLs arising in tax years ending after 2017 can only be carried forward. The 2-year carryback rule in effect before 2018, generally, does not apply to NOLs arising in tax years ending after December 31, 2017. Exceptions apply to certain farming losses and NOLs of insurance companies other than a life insurance company. For losses arising in taxable years beginning after Dec. 31, 2017, the new law limits the net operating loss deduction to 80% of taxable income (determined without regard to the deduction). |
These changes significantly impact how businesses strategize their tax planning, affecting everything from daily operational expenses to long-term investment strategies. Understanding these nuances can lead to more efficient tax management and potential savings.
1.1 Qualified Business Income (QBI) Deduction: A Game Changer
One of the most significant additions under the TCJA is the Section 199A deduction, which allows eligible self-employed individuals and small business owners to deduct up to 20% of their qualified business income (QBI). This deduction has the potential to significantly reduce the tax burden for pass-through entities.
However, it’s crucial to understand the nuances of this deduction, including the income limitations and the types of businesses that qualify. For instance, specified service trades or businesses (SSTBs) like law firms and accounting firms are subject to limitations once taxable income exceeds certain thresholds.
1.2 Meals and Entertainment Expenses: The New Landscape
The TCJA significantly altered the deductibility of entertainment expenses, eliminating deductions for activities considered amusement or recreation. However, the law allows a 50% deduction for business meals if certain conditions are met. The taxpayer or an employee of the taxpayer must be present during the meal, and the expenses must not be lavish or extravagant.
Understanding the specific criteria for deducting business meals is essential for accurate tax reporting. For example, if a meal is provided during an entertainment activity, the cost of the food and beverages must be stated separately from the entertainment cost to be deductible.
1.3 Interest Expense Limitations: Navigating the Rules
The TCJA introduced new limits on the deductibility of business interest expenses. Generally, the deduction is limited to the sum of business interest income and 30% of the business’s adjusted taxable income. However, small businesses with average annual gross receipts of $25 million or less are exempt from this limitation.
Understanding these limitations is crucial for businesses with significant interest expenses. While disallowed interest can be carried forward indefinitely, it’s important to plan your financing strategies to minimize the impact of these limitations.
1.4 Like-Kind Exchanges: Focusing on Real Property
Under the TCJA, like-kind exchange treatment is now limited to real property exchanges. This means that businesses can no longer defer capital gains taxes on exchanges of personal or intangible property.
This change has significant implications for businesses that frequently exchange assets. It’s essential to understand the new rules and plan asset disposition strategies accordingly.
1.5 Net Operating Loss (NOL) Carrybacks and Carryforwards
The TCJA eliminated the ability to carry back net operating losses (NOLs) for most taxpayers, while allowing NOLs to be carried forward indefinitely. However, for losses arising in tax years beginning after December 31, 2017, the NOL deduction is limited to 80% of taxable income.
These changes can impact how businesses manage losses and plan for future profitability. While the elimination of the carryback provision may be disadvantageous for some, the indefinite carryforward can provide long-term tax benefits.
2. Depreciation and Expensing Under the New Law
The Tax Cuts and Jobs Act (TCJA) brought significant changes to how businesses can depreciate and expense assets. These changes can significantly affect a company’s taxable income and cash flow.
| 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 PDF. 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. |
2.1 Temporary 100% Expensing: Immediate Deductions
One of the most significant changes under the TCJA is the introduction of temporary 100% expensing for certain business assets. This provision allows businesses to immediately deduct the entire cost of qualifying property placed in service after September 27, 2017, and before January 1, 2023.
This 100% expensing provision applies to both new and used property, providing a significant incentive for businesses to invest in capital assets. However, the allowance decreases by 20% per year in taxable years beginning after 2022 and expires January 1, 2027.
2.2 Section 179 Expensing: Increased Limits
Section 179 of the IRS code allows businesses to expense the cost of certain qualifying property as an immediate deduction, rather than depreciating it over time. The TCJA significantly increased the maximum deduction to $1 million and raised the phase-out threshold to $2.5 million.
This provision can be particularly beneficial for small and medium-sized businesses, allowing them to reduce their taxable income and improve cash flow. The TCJA also expanded the definition of Section 179 property to include certain improvements made to nonresidential real property.
2.3 Depreciation Limits for Luxury Automobiles: Higher Deductions
The TCJA also increased the depreciation limits for passenger vehicles, allowing for higher deductions. For vehicles placed in service after 2017, the maximum 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.
These increased limits can provide significant tax benefits for businesses that rely on vehicles for their operations. 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.
2.4 Treatment of Computer Equipment: No Longer Listed Property
Under the TCJA, computers and peripheral equipment are no longer categorized as listed property. This means that businesses are no longer subject to strict substantiation requirements for deducting the cost of these assets.
This change simplifies the process of deducting the cost of computer equipment, making it easier for businesses to claim the full deduction to which they are entitled.
2.5 Applicable Recovery Period for Real Property: Changes to ADS
While the general depreciation system (GDS) recovery periods for real property remain unchanged, the TCJA modified the alternative depreciation system (ADS) recovery period for residential rental property from 40 years to 30 years.
This change can accelerate depreciation deductions for landlords and real estate investors, providing potential tax benefits. 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.
3. Fringe Benefits and New Credits for Businesses with Employees
The TCJA also brought changes to fringe benefits and introduced 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, 2026. 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. |
3.1 Suspension of Qualified Bicycle Commuting and Moving Expense Reimbursements
The TCJA suspended the exclusion for qualified bicycle commuting and moving expense reimbursements. Under the new law, employers must include these reimbursements in employees’ wages, subject to income and employment taxes.
While employers can deduct qualified bicycle commuting reimbursements as a business expense, the suspension of the exclusion for employees means that these benefits are now taxable.
3.2 Employee Achievement Awards: Clarification on Tangible Personal Property
The TCJA clarified that tangible personal property for employee achievement awards does not 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.
This clarification provides greater certainty for employers regarding the types of awards that qualify for the exclusion.
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3.3 New Employer Credit for Paid Family and Medical Leave: A Benefit for Employers
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, 2026.
The credit is a percentage of wages 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.
4. 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. |
4.1 Cash Method of Accounting: Expanded Eligibility
The TCJA expanded the eligibility for using the cash method of accounting to small business taxpayers with average annual gross receipts of $25 million or less in the prior three-year period. This is a significant increase from the previous threshold of $5 million.
This change allows more small businesses to simplify their accounting and tax reporting processes. These small businesses are also exempt from certain accounting rules for inventories, cost capitalization, and long-term contracts.
4.2 S Corporation to C Corporation Conversions: Modifications to Existing Law
The TCJA made two modifications to existing law for a C corporation that was an S corporation on Dec. 21, 2017, and revokes its S corporation election after Dec. 21, 2017, but before Dec. 22, 2019, and has the same owners of stock in identical proportions on the date of revocation and on Dec. 22, 2017.
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. Distributions of cash following the post-termination transition period are treated as coming out of the corporation’s AAA and E&P proportionally.
5. Rehabilitation Tax Credit
| 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. |
5.1 Certified Historic Structures: Credit Over Five Years
The 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.
5.2 Pre-1936 Buildings: Credit Repealed
The 10% credit for pre-1936 buildings is repealed under TCJA. This change may impact the economics of rehabilitating older buildings that are not certified historic structures.
6. Opportunity Zones: Tax-Favored Investments
| 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. For more information, see Notice 2018-48. |
6.1 Tax Benefits for Investors: Deferral and Exclusion of Capital Gains
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.
6.2 Opportunity Zone Funds: Reinvesting Capital Gains
The Opportunity Zone program provides tax incentives for businesses and individuals to invest in economically distressed communities. By reinvesting capital gains into Qualified Opportunity Funds (QOFs), investors can defer or even eliminate capital gains taxes.
This provision encourages investment in areas that need it most, promoting economic development and job creation. The potential for tax benefits makes Opportunity Zones an attractive option for those looking to reinvest capital gains.
7. The Impact of the TCJA on Small Appliance Companies
For a small appliance company, the Tax Cuts and Jobs Act (TCJA) presents both opportunities and challenges. Understanding the nuances of the TCJA can help such a company optimize its tax strategy and improve its bottom line.
7.1 Deduction for Qualified Business Income (QBI)
One of the most significant benefits for a small appliance company is the deduction for qualified business income (QBI). This deduction allows eligible self-employed individuals and small business owners to deduct up to 20% of their qualified business income.
This can significantly reduce the company’s tax liability, freeing up capital for reinvestment in the business. However, it’s important to understand the limitations and eligibility requirements for this deduction.
7.2 Meals and Entertainment Expenses
The TCJA eliminated the deduction for entertainment expenses but allows a 50% deduction for business meals. A small appliance company can still deduct 50% of the cost of meals with clients, customers, or employees, as long as certain conditions are met.
7.3 Depreciation and Expensing
The TCJA introduced temporary 100% expensing for certain business assets, allowing a small appliance company to immediately deduct the entire cost of qualifying property placed in service after September 27, 2017, and before January 1, 2023.
This can provide a significant tax break for companies that invest in new equipment or machinery. The TCJA also increased the Section 179 expensing limits, allowing small appliance companies to expense up to $1 million of qualifying property.
7.4 Business Structure and Accounting Methods
The TCJA expanded the eligibility for using the cash method of accounting to small business taxpayers with average annual gross receipts of $25 million or less in the prior three-year period. This can simplify accounting and tax reporting for many small appliance companies.
8. Frequently Asked Questions (FAQ)
1. What is the Qualified Business Income (QBI) deduction?
The QBI deduction allows eligible self-employed individuals and small business owners to deduct up to 20% of their qualified business income.
2. How did the TCJA change the rules for meals and entertainment expenses?
The TCJA eliminated the deduction for entertainment expenses but allows a 50% deduction for business meals that meet certain conditions.
3. What is 100% expensing, and how does it work?
100% expensing allows businesses to immediately deduct the entire cost of qualifying property placed in service after September 27, 2017, and before January 1, 2023.
4. How did the TCJA change the Section 179 expensing limits?
The TCJA increased the Section 179 expensing limits to $1 million, with a phase-out threshold of $2.5 million.
5. Who is eligible to use the cash method of accounting under the TCJA?
Small business taxpayers with average annual gross receipts of $25 million or less in the prior three-year period are eligible to use the cash method of accounting.
6. What are Opportunity Zones, and how do they provide tax benefits?
Opportunity Zones are economically distressed communities that offer tax benefits to investors who reinvest capital gains into Qualified Opportunity Funds (QOFs).
**7. How did the TC
