4 Fringe Benefit
Deduction Changes Affect Business
The Tax Cuts and Jobs Act
included a number of tax law changes that affect small
businesses such as deductions for fringe benefit, which can
affect both a business's bottom line and its employees'
Here's a summary of what
Transportation fringe benefits. The new law disallows
deductions for expenses associated with qualified
transportation fringe benefits or expenses incurred providing
transportation for commuting, except as necessary for employee
Bicycle commuting reimbursements. Under the new tax
law, employers can deduct qualified bicycle commuting
reimbursements as a business expense for 2018 through 2025.
The new tax law suspends the exclusion of qualified bicycle
commuting reimbursements from an employee's income for 2018
through 2025. Employers must now include these reimbursements
in the employee's wages.
Moving expenses. Employers must now include moving
expense reimbursements in employees' wages. The new tax law
suspends the former exclusion for qualified moving expense
reimbursements. There is one exception for active duty members
of the U.S. Armed Forces. They can still exclude moving
expenses from their income. There is additional guidance on
reimbursements for employees' who moved in 2017, but were
reimbursed for expenses in 2018. Generally, reimbursements in
this situation are not taxed.
Achievement awards. Special rules allow an employee to
exclude achievement awards from wages if the awards are
tangible personal property. An employer also may deduct awards
that are tangible personal property, subject to certain
deduction limits. The new law clarifies the definition of
tangible personal property.
Don't hesitate to call if you have any questions about tax law
changes affecting fringe benefits and your small business.
If you have any questions about these fringe benefit business
tax changes, please contact the office for assistance with
following these and other 2019 tax planning strategies that
might be suitable for your particular situation at
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