Great news! Important tax guidance was released in late December 2018 that is considered to be a significant victory for the restaurant industry: Employee Shift Meals Remain 100-percent deductible for tax purposes.
To encourage economic growth and investment in distressed communities, the 2017 tax reform act commonly known as the Tax Cuts and Jobs Act contains tax incentives that are tied to investments in businesses or property located within opportunity zones. Tax incentives include both the deferral of, and exclusion from, income tax.
The Department of Treasury has certified nearly 9,000 of these districts across all U.S. states and its territories, including the entire island of Puerto Rico. Opportunity zones, also commonly referred to as O-Zones, are generally areas with low income and high poverty levels.
An O-Zone designation has the potential to trigger an influx of investment activity and is intended to help revitalize areas that were left behind after the depression. Restaurants built in O-Zones can help vitalize underserved communities and attract local talent, all while offering their owners a highly valued tax incentive.
Restaurant owners who invested in interior improvements in 2018 may be surprised when they receive their 2018 tax returns and see higher than expected tax liabilities. This is a result of an inadvertent drafting error in the Tax Cuts and Jobs Act (TCJA) relating to the depreciation of restaurant improvements.
Before the TCJA, the tax law provided rules for multiple categories of restaurant property assets, many of which were eligible for favorable tax depreciation benefits. To simplify the rules, tax reform consolidated the categories applicable to interior improvements into the single category of Qualified Improvement Property (QIP).
Growing your business is the primary focus of every entrepreneur. Whether growth occurs by way of increasing sales and cash flows at existing business divisions or via acquisition and expansion, the challenges faced are often strikingly similar.
That being said, let’s examine for a moment the prospects and hurdles one will often face when buying a new restaurant, through the lens of a turnaround CFO.
The Section 179 deduction for qualified real property expenses was made permanent under the Protecting Americans from Tax Hikes (PATH) Act of 2015. However, claiming this deduction isn't a no-brainer. Here are the pros and cons.