How did you do this tax season with the new Tax Cuts and Jobs Act? The answers (and your grade) are at the end.
1. If your small business constitutes a "pass-through entity," how much of your net business income are you allowed to deduct?
- I'm not sure what a "pass-through entity" is, but it sounds unpleasant
2. You spent $1.1 million in 2018 to repair your warehouse roof and buy much-needed new equipment. How much of that is deductible under Section 179?
- All of it
- $1 million
- Um … tell me what Section 179 is again
3. If you treated a client to a lavish meal, can you deduct that as a business expense?
- Define "lavish"
4. If you treated a client to a meal that was not lavish, can you deduct that as a business expense?
- Again, define "lavish"
5. Your business generated $15 million in gross receipts in 2018, roughly the same as in the previous three years, when you were required to use accrual accounting. Can you switch to the cash method under the TCJA?
- What's the difference?
6. You and your spouse file your return jointly. Last year, your standard deduction was $13,000. What is it this year?
- The same
- No idea — my spouse handles that
7. You sold an apartment building to finance the purchase of a dog kennel. For tax purposes, is that considered a like-kind exchange?
- That depends on whether you consider yourself a "dog person"
- Like-kind exchange … don't tell me — I think I know this one
7: Were you an IRS auditor in a previous life?
5-6: You know enough to ask for help
2-4: You guessed a lot, didn't you?
0-1: Three words: outsourced bookkeeping services