While the TCJA drastically changed several tax provisions, many year-end planning tactics remain. Managing taxable income is important not only for the new QBI deduction, but also for the additional Medicare tax and Net Investment income tax. Lowering your taxable income may also enable you to claim credits and other tax breaks that are phased out over varying levels of AGI.

Entertainment expenses are no longer deductible; however, meals remain deductible and are still subject to the 50% limitation. For example, if you take a client to a baseball game—and purchase tickets, hot dogs, and drinks—the cost of the ticket is not deductible, but the hotdogs and drinks are allowed as a deduction subject to the 50% limitation.

For qualified property placed in service during 2018, $1,000,000 can be expensed under Section 179 (up from $510,000 in 2017). This deduction begins to be phased out if more than $2,500,000 of property is placed in service during 2018.

The top tax rate for C Corporations has been reduced from 35% to 21%. In order to place individual business owners and passthrough business owners in a similar tax rate situation, the Tax Cuts and Jobs Act 2018 (TCJA) added a 20% qualified business income deduction. For service businesses, such as consulting, accounting, financial services, health, and law, the deduction is limited for taxable income over $315,000 for joint filers (or $157,500 for single filers and trusts) and completely phased out for taxable income over $415,000 for joint filers (or $207,500 for single filers and trusts).