The repeal of the Individual Mandate (requirement to purchase medical insurance) is effective for months beginning after December 31, 2018. Therefore insurance will be required for 2018 without having to pay the penalty.
- The bill also retains the medical expense deduction, which allows taxpayers to deduct medical expenses that exceed 10% of their income. The overhaul would for one year lower the threshold to 7.5%, where it used to be, and return it to 10% in 2019.
How will it affect my business deductions?
1. Luxury automobiles (and all auto’s for that matter)
Annual Depreciation- up significantly.
Current Proposed
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Year 1- $3,160 $10,000
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Year 2- $5,100 $16,000
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Year 3- $3,050 $9,600
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Year 4- $1,875 $5,750
2. Section 179 Expense
- Deduction increased to $1,000,000 from $500,000. This will allow businesses to write off up to $1,000,000 of assets immediately upon the year of purchase.
3. For construction contractors on the completed contract method
- Average annual gross receipts test is increased to $25,000,000 from $10,000,000. With soaring construction costs over the past several years, this is a much-needed increase.
We will see what the outcome is tomorrow before making any other inferences.
-Keith
