Breaks

is deductible. The IRS also says owners can buy food for a customer at an entertainment event as long as the food is paid for separately. In a notice about meals and entertainment expenses issued in October, the agency used hot dogs at a baseball game as an example. The food is deductible; the tickets are not.

Owners can also deduct 100 percent of the cost of food at parties or picnics for employees.

While the loss of the entertainment deduction may discourage some owners from treating customers to tickets or a golf game, others will decide that paying for entertainment is a worthwhile investment in their companies’ future because of the goodwill it creates. That’s good business sense, says Ken Rubin, a CPA with Rubin Brown in St. Louis.

“Normally, our general statement is, don’t let tax considerations drive the business decisions,” Rubin says. Or, as tax advisers sometimes tell their clients: Don’t let the tax tail wag the dog.

Employee expenses

The law also eliminated the deduction owners could take for subsidizing their employees’ commuting costs. Similar to their decisions about entertainment expenses, owners must decide whether they want to continue giving employees money toward their mass transit fares or parking tabs; given the tight labor market, owners might want to continue providing the benefits to make their companies better able to compete for talented workers. And taking the benefit

By the time most people reach this stage of life, their children are finished college and starting professional lives and families of their own. For that reason, it’s a great time to start thinking about your home. The key to your independence could come as a result of downsizing. Downsizing makes life easier to manage as you age. Many people realize this and it’s a good idea, but for a variety of reasons people have a hard time doing so. I believe it’s largely because this requires downsizing all of your belongings as well. It’s hard to go through a lifetime of stuff, away could be a morale-buster, says Leon Dutkiewicz, a CPA with Citrin Cooperman in Philadelphia.

“When you run the math, you’re going to lose more in goodwill than you would from losing the deduction,” he says.

Employees also lost a popular deduction — for job-related expenses like the cost of tools, uniforms and publications related to their work. Owners who want to give their staffers a break might want to take on those expenses and deduct the costs.

Net operating losses

Businesses that lose money no longer have the ability to “carry back” their losses to offset earnings in previous years and get refunds on taxes they paid. The law does allow companies to carry losses forward to an unlimited number of future years, helping them reduce taxes during profitable times.

Although the absence of carrybacks takes away some flexibility for businesses, it isn’t likely to be an issue for companies in a strong economy when businesses are doing well, Rubin says. It can, however, be an issue for companies like restaurants and retailers.

“It’s a bigger deal for cyclical-type businesses that will make money one year, lose money the next,” Rubin says.