Does it affect your business?
The Tax Cuts and Jobs Act (TCJA) introduced a variety of tax
benefits for businesses. Among other things, it slashed corporate
income tax rates, temporarily reduced individual rates and
established a new 20% deduction for certain pass-through income. At
the same time, the Act placed limits on several tax breaks,
including the amount of interest expense a business may deduct.
"Small" businesses are exempt
Before you worry about the mechanics of the business interest
limit, you should determine whether you qualify for the small
business exemption. Businesses whose average annual gross receipts
for the preceding three years are $25 million or less are not
subject to the limit and, with a few rare exceptions, may deduct
all their business interest expense.
