3 Quick Business Tax Takeaways for Friday, January 18, 2019
Businesses can still deduct 50% of Meals as a business expense for tax year 2018, but the new laws specifically deny expenses for entertainment, amusement, or recreation.
Existing businesses that wish to convert to being taxed as an S corporation have no more than two months and 15 days from the beginning of the tax year to make the election. There are numerous pitfalls to avoid when changing tax treatment. Contact your licensed tax professional for help because that consultation can be well worth the money.
A word on late filing penalties for S corporations and partnerships: If you are a partner in a partnership or a shareholder in an S corporation, the penalty for failing to file your tax return on time is $195 multiplied by the number of partners or shareholders, times the number of months the return is late not to exceed a total of 12 months. That means that if your partnership or s corporation completely failed to file it’s 2016 tax return and you just found out about it, and you have 8 shareholders or partners, the penalty for failing to file in time is $195 X 8 X 12 months = $18,720 plus interest. In some circumstances there may be relief from the penalties. Contact us for help.