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Non reimbursed business expenses with 2018 tax code

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  • Non reimbursed business expenses with 2018 tax code

    I usually have some non-reimbursed business expenses that I was able to itemize off my taxes, but my understanding is the new tax code will not allow this. Would forming a LLC for any consulting work or other 1099 income allow these unreimbursed business expenses (conference travel etc) to be deducted or qualify as a business expense in 2018?

  • #2
    You are correct that the new tax code has basically eliminated unreimbursed business expenses.  If they are related to your W2 income, you cannot deduct them.  If the expenses are related to your 1099 income, you can (and should be) deducting these on your Schedule C where you are reporting your 1099 income.  Forming an LLC won't make any difference as this would be a disregarded entity for tax purposes.


    • #3
      Are you saying that you are otherwise a W2 worker with enough employee business expenses to exceed 2% of your AGI? You can deduct a pro-rata amount of business expenses from your IC income, but there is no need to form a separate entity given the information presented.

      If your income is already earned via 1099, you will continue to deduct your business expenses as before. The new law disallows only "employee" business expenses, not the expenses of your own business.
      Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087