When you start making calculations for your 2018 tax bill, make sure you consider this new rule that limits interest deductions for businesses that finance their operations with loans. Under the tax reform law passed late last year, the deduction for business interest is limited to 30% of the company’s taxable income beginning in 2018. This limitation applies to any interest paid by companies with annual revenues in excess of $25 million. Any excess interest that is not deductible in a given year can be carried forward to the next year and potentially taken then, subject to the same 30% limitation. Like any good rule, of course, this one comes with exceptions so make sure to contact one of our tax consultants to discuss how this new rule could affect your 2018 tax situation.
