The Tax Cuts and Jobs Act : How Does it Affect Tech Businesses?

The Tax Cuts and Jobs Act (TCJA) is a sweeping reform of the tax code that was signed into law by president Donald Trump in Dec. 22., 2017. The new tax law includes mostly tax breaks, reduction of tax rates and significant increases in personal deductions for individual taxpayers.

Tech businesses, just like any other enterprise and regardless of structure, are likely to benefit from the changes. The legislation of the tax reforms was seen as a way of encouraging businesses to expand and hire more workers.

If a tech business is registered as a corporation, the most important change brought by the Act is the lowering of the Corporate Tax rate from a previous high of 35%, down to a new low of 21%.

Major TCJA Reforms that Allow Greater Reductions on Taxable Business Income

The TCJA modified the following allowable deductions to pose as significant tax reliefs, mainly because they can greatly reduce the taxable income of corporations and/or pass-through businesses.

Pass-through businesses by the way, are usually small or medium-sized enterprises in any industry. They are registered either as a sole proprietorship, partnership, limited liability company (LLC) or S-Corporation. Their main difference from traditional or C corporations is that income generated by the business, passes on as taxable income of the business owner/s, and not of the corporation.

Lump-Sum 20% Deduction on Qualified Business Income

Owners of pass through businesses can apply a lump-sum 20% deduction to further reduce their taxable income. However, this tax relief is available only when the taxable income is less than $157,500 and if the business owner is single; or less than $315,000 for married business owners.

100% Depreciation on Capitalized Expenditure

Capitalized expenditures are those that form part of the assets of the business rather than treated as outright expenses for the year. Traditionally, capitalized expenditures are gradually depreciated over a specific life and only the depreciation for the year gets recognized as an expense that can reduce the taxable income of a business.

The TCJA modified this method of recognizing depreciation expenses by allowing corporations and pass through businesses to treat the full cost of an acquisition on the very first year; instead of spreading them out as depreciation expenses throughout the life of the asset.

This tax amendment encourages businesses to further invest on computers, vehicles and other cost-intensive equipment and major property renovations.

Modification on the Treatment of Net Operating Loss (NOL)

Prior to the enactment of the TCJA, a resulting Net Operating Loss or NOL can be carried back for up to two years. Now, when a business incurred losses instead of profit during the tax year, the NOL amount can apply as further reductions on the taxable income on next year’s tax return. In case, the business incurs another NOL on the next tax year, they can be added to the previous year’s NOL onward, and for an indefinite period of time.

However, this tax relief is something that business owners must work out with a seasoned tax consultant, since the Internal Revenue Service (IRS) is not inclined to readily accept NOLs at face value. Expect an IRS examiner to carefully scrutinize the tax return in order to ascertain the propriety of all deductions made against the gross profit.

Gear Up with a High Tech Solar Powered Charger During Extreme Outdoor Adventures

While out on an outdoor adventure whether for purely explorational and recreational purpose or for carrying out a specific mission (e.g. research, competitive training), you will likely be using numerous smartphone apps that can quickly drain the battery off your mobile device.

Taking more than one smart device and a powerbank with you is a good idea, but it is against the principle of “traveling light” during long outdoor travels of the extreme kind. Powerbanks are lightweight enough, but they eventually run out juice, specially if it has to keep up with your frequent charging during days of outdoor tripping. The more sensible thing to do is to bring a highly advanced solar powered charger.

A powerful solar powered charger simply gets its energy from the sun. Now to avoid draining this device, you only need to place it directly under the scorching heat of the sun and let its technology to do the rest. In the meantime, find a shady area in which to fasten your hammock, as you need to avoid overexposure to the sun’s powerful UV rays if you have to stop and rest. Well, when it comes to this camping device, the best type to bring is a parachute hammock, because it is made from the same lightweight but sturdy materials used for parachutes.

Features that Make a Solar-Powered Charger Reliable and Powerful

More often than not the robust kind of solar-powered chargers include the word “Extreme to its brand.” Mainly because they are meant for outdoor activities that commonly take a person away from electrical outlets for days under harsh conditions.

The powerful type usually houses a 9,000 mAh battery, a size that is tolerable enough to load as extra weight in one’s backpack. Moreover, for a solar charger to be powerful under extreme outdoor travel, it must be outfitted with at least a 3 to 3.5- watt solar panel. That way, the charger can take in and store as much solar energy as possible through highly efficient monocrystalline solar cells.

An extreme solar charger includes other features such as waterproof, shockproof, scratch proof and built with a 5V USB port; plus an option for charging via an electrical outlet by way of 12V DC socket. Although 5V USB is pretty standard for any type of portable device, it is still best to check just how much voltage your device can take in case it deviates from the standard.