January Tax Saving Tips
Tax-Saving Tips January 2019 TCJA Tax Reform Sticks It to Business Start-Ups That Lose Money The Tax Cuts and Jobs Act (TCJA) tax reform added an amazing limit on larger business losses that can attack you where it hurts—right in your cash flow. And this new law works in some unusual ways that can tax you even when you have no real income for the year. When you know how this ugly new rule works, you have some planning opportunities to dodge the problem. Over the years, lawmakers have implemented rules that limit your ability to use your business or rental losses against other income sources. The big three are: 1. The “at risk” limitation, which limits your losses to amounts that you have at risk in the activity 2. The partnership and S corporation basis limitations, which limit your losses to the extent of your basis in your partnership interest or S corporation stock 3. The passive loss limitation, which limits your passive loss