When you arose from your Titos-induced slumber on the morning of January 1st, it was more than just your pants and dignity that had gone missing. While you were ringing in the New Year, the Internal Revenue Code you’d come to know and love had disappeared, replaced by the Tax Cuts and Jobs Act, the most comprehensive overhaul of the tax law in 31 years.
Fortunately for you, with enough money, both trousers and self-respect are easily recouped. An understanding of the tax law, however? That can’t be bought. As a result, you’ve got to start over, diving into the wholesale changes that took effect on New Year’s Day in hopes of regaining the same level of comfort you enjoyed with the previous version. And that’s not going to be a quick process, because as we’re quickly learning, for every straightforward tweak to the law– the doubling of the standard deduction, the elimination of personal exemptions — there is a corresponding influx of complexity that requires you to pop on the ol’ thinking cap.
In last week’s Tax Geek Tuesday, we took on perhaps the most intimidating and impactful provision of the new law: the “20% of qualified business income” deduction available to sole proprietors and owners of pass-through entities. It was a productive endeavor, but our work is far from over.
Today, we’ll move on to the next big challenge posed by the new law: understanding the changes that have been made to the way we depreciate assets purchased for use in a business.
Authored by Tony Nitti, Withum Partner and writer for Forbes.com.