Pit & Quarry, February 2018
TAXES large scale tax avoidance Under this system incorporated businesses were required to calculate both their ordinary tax and the Alternative Minimum Tax AMT paying whichever was higher Fortunately the corporate AMT has been eliminated lowering taxes and eliminating the confusion and uncertainty that surrounded it in the past COST RECOVERY INCREASED EXPENSING Unlike in past years when aggregate businesses were required to claim depreciation spreading the recovery of their equipment costs over several years many will fully and immediately deduct the cost of certain equipment Whats more this provision was made retroactive to Sept 27 2017 Of course the faster write off of equipment Under the Tax Cuts Jobs Act many aggregate businesses will be able to fully and immediately deduct the cost of certain equipment costs is only temporary It is at the 100 percent level for expenditures between Sept 27 2017 and Jan 1 2023 After 2023 and before 2025 the amount deductible drops to 60 percent with a further decrease to 40 percent after 2025 and to 20 percent after 2026 On Jan 1 2027 the equipment cost write off disappears SECTION 179 The differences between bonus depreciation and the tax laws Section 179 first year expensing allowance has narrowed with both offering 100 percent write offs for new and used property The immediate write off or expensing of capital assets under Section 179 remains appealing because unlike so called bonus depreciation the use of equipment doesnt have to begin with the crushed stone sand or gravel business The bottom line Section 179 allows up to 1 million up from 500000 in 2017 of expenditures for business equipment and property to be treated as an expense and immediately deducted The ceiling after which the Section 179 expensing allowance must be reduced dollar for dollar has also increased from 2 million to 25 million INTEREST EXPENSES In the past the tax laws have protected the ability of small businesses to write off the interest on loans In an attempt to level the playing field between businesses that capitalize through equity and those that borrow the TCJA has capped the interest deduction to 30 percent of the adjusted taxable income of the aggregate business Exceptions exist for small businesses to protect their ability to write off the interest on loans that help them start or expand a business hire workers and increase paychecks LIKE KIND EXCHANGES The tax laws Section 1031 governing like kind exchanges FALVEY STEEL CASTINGS Serving the industry since 1960 Best Service Best Quality Best Price 781 767 6210 falveysteel com 66 PIT QUARRY February 2018 pitandquarry com PHOTO BY MEGAN SMALLEY
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