Congress is working to finalize their new tax bill that makes a number of changes in tax laws for 2018 and perhaps 2017. Because the House and Senate versions of the tax bills are different I will wait to write about these changes once a final bill becomes law.
In the meantime, we do know of some changes in tax laws for 2017 and 2018.
* The standard mileage rate for 2017 is $.535. I expect to learn about the 2018 rate very shortly.
* The standard meal allowance rate for 2017 (and 2018) is: $1.31 breakfast, $2.46 lunch/supper and $.73 snack. Use this rates for all meals and snacks served in 2017 and 2018 (including meals and snacks not reimbursed by the Food Program). The rates for Alaska and Hawaii are higher. You may deduct up to one breakfast, one lunch, one supper and three snacks per day, per child.
* Providers may deduct in one year (rather than depreciating) items they purchased in 2017 that cost less than $2,500. Providers must include the following written statement with their tax return indicating they are electing this rule.
“Section 1.263(a)-1(f) De Minimis Safe Harbor Election
Your name _________________
Your address __________
EIN or Social Security Number __________
For the year ending December 31, 2017 I am electing the de minimis safe harbor under Treas. Reg. Section 1.263(a)-1(f) for my business expenses of less than $2,500.”
* The 50% bonus depreciation rule has been extended to 2017. This rule allows providers who purchased new furniture, appliances, playground equipment, fences, patios, office equipment, and home improvement to deduct half of the normal depreciation in 2017. The bonus drops to 40% in 2018. See my article on this.
* The income limits to qualify for the IRS Saver’s Credit has increased to $61,000 (adjusted gross income) for couples filing jointly and $30,500 for individuals or married people filing separately.
* The IRS has relaxed the rules defining what is a repair (deduct in one year) vs. a home improvement (depreciate over 39 years). Repairs may now include replacing a few windows or doors, installing a wood or tile floor and replacing roof shingles. See my article on this.
* Under certain circumstances providers may be able to deduct fences/patios/driveways and home improvements in one year, rather than having to depreciate them. See my article on this.
Tom Copeland – www.tomcopelandblog.com
Image credit: https://www.flickr.com/photos/saturnism/
For all the changes in taxes for 2017 see my book 2017 Family Child Care Tax Workbook and Organizer.