ADDITIONAL WAYS TAX REFORM WILL IMPACT THE TRANSPORTATION INDUSTRY


W


hen the Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017, companies in all industries braced themselves


for impending changes. The key takeaway of the TCJA is lower tax rates for both businesses and individuals. However, the impacts of this new tax law are extensive and have left many taxpayers wondering how they will be affected.


For the transportation industry, guidelines are continuing to emerge. In addition to the key provisions that were highlighted in our earlier analysis, Top Three Things to Know About How Tax Reform Impacts Your Trucking Company, the following changes will likely affect most trucking companies.


Meals and Entertainment


The new tax law generally eliminates the deduction for entertainment expenses and in some circumstances further limits the deduction for business meals. Entertainment expenses incurred or paid after December 31, 2017 are nondeductible unless they meet certain exceptions. Under the previous tax law, entertainment expenses that were directly related to the taxpayer’s trade or business were able to be deducted at 50 percent. Business meals that are provided for the convenience of the employer are now limited to a 50 percent deduction and are set to be fully nondeductible after 2025. Under the previous tax law, these were fully deductible.


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CARRIERS & BROKERS


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