Are your business interest expenses deductible?
Abstract: Before the Tax Cuts and Jobs Act (TCJA), most business-related interest expense was deductible, although corporations couldn’t deduct interest paid to or guaranteed by a related party under certain circumstances. But for tax years beginning after 2017, the TCJA imposes a limit on business interest deductions, with exceptions for “small businesses” and electing real estate and farming businesses. This article explains why all businesses should evaluate the impact of the new deduction limit on their tax liability, and plan accordingly. A sidebar discusses IRS Notice 2018-28, which provides interim guidance on several issues involving business interest expense and income.