Language:

Blogging Beyond the Numbers

Posted by: Bruce Mayer 2 months ago
The new tax law was amended in March 2018 to remove patronage dividends from the 20% pass through business deduction.  This is a tax disadvantage for worker co-ops taxed under Subchapter T. Co-ops where the recipients of patronage dividends are businesses, or are individuals not paying tax due to the personal use exemption, are not affected by this change.  I will explore what some of the tax advantages a...
Posted by: Bruce Mayer 2 months ago
On March 23, 2018 Congress passed an amendment to the new tax law that removed patronage dividends from being eligible for the 20% business pass through deduction. This was done to alleviate an issue they called the “Grain Glitch” where private grain elevators were significantly disadvantaged.  Using per unit retains, a form of patronage dividends, farmers could deduct 20% from the gross proceeds of...
Posted by: Bruce Mayer 2 months ago
Through December 31, 2017, most employer expenses related to meals, entertainment, and employee transportation were considered legitimate business costs, but might have been subject to 50% deductibility for federal income tax purposes.  The new tax law reduces or eliminates many of those deductions.  The IRS has yet to issue guidance on the new rules so the ideas below may be modified once that is issued....
20%
Posted by: Bruce Mayer 6 months ago
Cooperatives that are taxed as partnerships or S-corporations fall under the general tax rules applicable to all partnerships and S-corporations.  The Subchapter T rules that apply to incorporated cooperatives do not apply to partnerships and S-corporations. Reduction in top corporate tax rate The headline change in the new tax law is the reduction in the top corporate tax rate from 35% to 21%.  That ch...
Expenses Losses
Posted by: Bruce Mayer 6 months ago
One of the ways the reduced corporate tax rate was “paid for” was by reducing the value of certain deductions.  One of these was limiting the net operating loss deduction.  Net operating losses are generated by showing a negative taxable income on an annual income tax form. Prior Tax Law for Net Operating Losses Under the prior tax law a net operating loss could be carried back two years or forward ...
percent
Posted by: Bruce Mayer 6 months ago
The new corporate tax rate was the headline change made by this new tax law.  That rate is, of course, a flat 21% on all taxable income. Not all businesses will realize a tax rate benefit from the new tax law changes. The prior rules taxed corporate net income at only 15% for the first $50,000, with higher graduated rates beyond that amount.  So a corporation with a taxable income of exactly $50,000 w...
car dashboard
Posted by: Bruce Mayer 6 months ago
Purchases of equipment, vehicles and other business property that is not buildings and real estate are eligible for more rapid write-offs.  These rules are changed on a regular basis so for the most part this is just an adjustment of how fast things can be written off. The two area we will discuss are bonus depreciation and expensing of items (Section 179).  We will also discuss several reasons why taking...
Posted by: Bruce Mayer 1 year ago
We have been involved in the Food Cooperative (FCI) Initiative annual conference, Up & Coming, for four years.   Bruce has been giving and refining a presentation on Taxes and Accounting for Start-Up Food Cooperatives.  In 2014, FCI coordinated putting the presentation on You Tube. The presentation has been slightly modified since the presentation in 2014. Here is the current PowerPoint for th...
Tax Deadline
Posted by: Bruce Mayer 2 years ago
The Internal Revenue Service has changed the due dates for a number of returns relevant to cooperatives. The primary driver for this was moving up the partnership due date so that K-1s are made available to individuals in time to file their 1040 without extensions. A secondary issue was moving back the corporation due date one month. Most corporations extend their returns so the initial due date is less imp...