OCT 2018

MedEsthetics—business education for medical practitioners—provides the latest noninvasive cosmetic procedures, treatment trends, product and equipment reviews, legal issues and medical aesthetics industry news.

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Page 47 of 68

WRITE-OFFS Under the TCJA's "100 percent bonus depreciation," businesses can now write off the full cost of equipment and property purchases—such as medi- cal equipment, computers, fi xtures, furniture and vehicles—in the year the equipment was placed in service. Pre-TCJA, businesses could only write off equipment cost depreciation over a number of years. In addition, the fi rst-year expensing write-off has been doubled from $500,000 to $1,000,000 and now includes fi re protection, and alarm and security systems. Equipment Abandonment. If equipment or other business assets have no value to your practice, abandoning rather than selling them might be more rewarding. Abandoning old equipment generates a fully deductible loss, rather than a capital loss subject to limitations. To claim this deduc- tion, abandonment of the equipment must be true and documented before the end of the tax year. Entertainment Deductions. Business-related entertainment, amuse- ment or recreational expenses are no longer deductible. Business meals remain 50 percent deductible. Family and Medical Leave Tax Credit. As part of the TCJA, em- ployers can claim a tax credit—a reduction in the operation's tax bill (as opposed to a deduction in the income that tax bill is based on)—on wages paid to qualifying employees while they are on family or medical leave. In order to claim the credit, there must be a written policy that provides at least two weeks of paid leave annually to all qualifying employees who work full time. What's more, leave pay must be no less than 50 percent of the wages normally paid to the employee. Business Interest Deductions. The TCJA placed new limits on busi- ness interest deductions, restricting them to 30 percent of the operation's adjusted gross income. Questions remain about what constitutes "invest- ment interest" vs. "business interest" and how the limit should be applied to pass-through entities and consolidated groups. (Corporate debt is considered to be business interest rather than investment interest.) For- tunately, there is an exception for small businesses with gross receipts that fall below a $25 million threshold for a three-year period. If your practice meets these parameters, you can write off the interest on loans obtained to start or expand your operation, hire workers and/ or increase paychecks. NOL Carryovers. Deductions for capital losses, net operating losses (NOLs), home offi ce deductions and even large charitable donations that cannot be fully used in one year may be carried forward to future years. Under the TCJA, the maximum NOL deduction for a tax year is whichever is lower: the aggregate of the NOL carryovers up to the current year plus NOL carrybacks to such year, or 80 percent of taxable income. Additionally, most businesses—including practices and medspas—can no longer carry back NOLs. | OCTOBER 2018 45

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