Monthly Archives: January 2018

Bonus Depreciation and the TCJA

The TCJA temporarily expands bonus depreciation

bonus depreciationThe Tax Cuts and Jobs Act (TCJA) enhances some tax breaks for businesses while reducing or eliminating others. One break it enhances — temporarily — is bonus depreciation. While most TCJA provisions go into effect for the 2018 tax year, you might be able to benefit from the bonus depreciation enhancements when you file your 2017 tax return.

Pre-TCJA bonus depreciation
Under pre-TCJA law, for qualified new assets that your business placed in service in 2017, you can claim a 50 percent first-year bonus depreciation deduction. Used assets don’t qualify. This tax break is available for the cost of new computer systems, purchased software, vehicles, machinery, equipment, office furniture, etc.

In addition, 50 percent bonus depreciation can be claimed for qualified improvement property, which means any qualified improvement to the interior portion of a nonresidential building if the improvement is placed in service after the date the building is placed in service. But qualified improvement costs don’t include expenditures for the enlargement of a building, an elevator or escalator, or the internal structural framework of a building.

TCJA expansion
The TCJA significantly expands bonus depreciation:  For qualified property placed in service between September 28, 2017, and December 31, 2022 (or by December 31, 2023, for certain property with longer production periods), the first-year bonus depreciation percentage increases to 100 percent. In addition, the 100 percent deduction is allowed for not just new but also used qualifying property.

The new law also allows 100 percent bonus depreciation for qualified film, television and live theatrical productions placed in service on or after September 28, 2017. Productions are considered placed in service at the time of the initial release, broadcast or live commercial performance.

Beginning in 2023, bonus depreciation is scheduled to be reduced 20 percentage points each year. So, for example, it would be 80 percent for property placed in service in 2023, 60 percent in 2024, etc., until it would be fully eliminated in 2027.

For certain property with longer production periods, the reductions are delayed by one year. For example, 80 percent bonus depreciation would apply to long-production-period property placed in service in 2024.

Bonus depreciation is only one of the business tax breaks that have changed under the TCJA. Our advice is, Don’t go it alone. David Reape, CPA, Ciuni & Panichi, Inc. Tax Principal, has extensive experience and expertise in tax laws and is knowledgeable about the TCJA. He can provide valuable advice for your business. Contact him 216-831-7171 or by email here.

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Time for Strategic Planning

You must find time for strategic planning

businessman's hand holds an alarm clock.As a business owner, you know that it’s easy to spend nearly every working hour on the multitude of day-to-day tasks and crises that never seem to end. It’s essential to your company’s survival, however, to find time for strategic planning. Lost in the weeds Business owners put off strategic planning for many reasons. New initiatives, for example, usually don’t begin to show tangible results for some time, which can prove frustrating. But perhaps the most significant hurdle is the view that strategic planning is a time-sucking luxury that takes one’s focus off of the challenges directly in front of you. Although operational activities are obviously essential to keeping your company running, they’re not enough to keep it moving forward and evolving. Accomplishing the latter requires strategic planning. Without it, you can get lost in the weeds, working constantly yet blindly, only to look up one day to find your business teetering on the edge of a cliff — whether because of a tough new competitor, imminent product or service obsolescence, or some other development that you didn’t see coming. Quality vs. quantity So how much time should you and your management team devote to strategic planning? There’s no universal answer. Some experts say a CEO should spend only 50 percent of his or her time on daily operations, with the other half going to strategy — a breakdown that could be unrealistic for some. The emphasis is better put on quality rather than quantity. However many hours you decide to spend on strategic planning, use that time solely for plotting the future of your company. Block off your schedule, choose a designated and private place, and give it your undivided attention. Make time for strategic planning just as you would for tending to an important customer relationship. Time well spent Effective strategic planning calls for not only identifying the right business-growing initiatives, but also regularly re-evaluating and adjusting them as circumstances change. Thus, strategizing should be part of your weekly or monthly routine — not just a “once in a while, as is convenient” activity. You may need to delegate some of your current operational tasks to make that happen but, in the long run, it will be time well spent. One way to stay on track is to work with a business advisor. By way of scheduled meetings with your advisor, time is designated for planning. Contact Mike Benz, Ciuni & Panichi, Inc. Executive Advisor, 216-831-7171 or by email to learn about the many advisory services the firm offers that will help you achieve your business goals in 2018. You may also be interested in: Is Your Company’s Retirement Plan as Good as it Could Be? Private Companies and Financial Reporting

2018 Q1 Tax Calendar

Key tax deadlines for businesses and other employers

Q1 tax planningHere are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2018. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact Nick Leacoma, CPA, Ciuni & Panichi, Inc. Tax Department senior manager, at 216.831.7171 or by email at nleacoma@cp-advisors.com to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. January 31

  • File 2017 Forms W-2, “Wage and Tax Statement,” with the Social Security  Administration and provide copies to your employees.
  • Provide copies of 2017 Forms 1099-MISC, “Miscellaneous Income,” to recipients of  income from your business where required.
  • File 2017 Forms 1099-MISC reporting nonemployee compensation payments in Box 7  with the IRS.
  • File Form 940, “Employer’s Annual Federal Unemployment (FUTA) Tax Return,” for  2017. If your un-deposited tax is $500 or less, you can either pay it with your return or  deposit it. If it’s more than $500, you must deposit it. However, if you deposited the tax  for the year in full and on time, you have until February 12 to file the return.
  • File Form 941, “Employer’s Quarterly Federal Tax Return,” to report Medicare, Social  Security and income taxes withheld in the fourth quarter of 2017. If your tax liability is  less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax  for the quarter in full and on time, you have until February 12 to file the return.  (Employers that have an estimated annual employment tax liability of $1,000 or less may  be eligible to file Form 944,“Employer’s Annual Federal Tax Return.”)
  • File Form 945, “Annual Return of Withheld Federal Income Tax,” for 2017 to report  income tax withheld on all non-payroll items, including backup withholding and  withholding on accounts such as pensions, annuities and IRAs. If your tax liability is less  than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for  the year in full and on time, you have until February 12 to file the return.

February 28

  • File 2017 Forms 1099-MISC with the IRS if 1) they’re not required to be filed earlier and  2) you’re filing paper copies. (Otherwise, the filing deadline is April 2.)

March 15

  • If a calendar-year partnership or S corporation, file or extend your 2017 tax return and  pay any tax due. If the return isn’t extended, this is also the last day to make 2017  contributions to pension and profit-sharing plans.

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