Mark Kohler explains 2018 tax changes on LA Today. Entertainment expenses are no longer deductible, but meal deductions remain. He covers what small business owners can still write off: service animals, entertainer clothing, business travel, and rental property deductions.
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Here we go.
Turn your lights to green so you can think money, right? And you hear Cha Ching. We are talking to a tax and legal expert who has seen some pretty weird, or I guess you could call unique yet totally legal, tax deductions throughout his career. Please welcome Mark Kohler. He's here to tell us how to get you the most for your money when you are filing for the IRS this year and next when the new tax law goes into effect. Mark, good morning to you.
Thanks for having me. So excited to be here in la.
Yeah, fantastic.
I'm tired after all the Golden Globe after parties.
Oh, look at you. Party hardy and saving us some money on the side, right?
No one invites me to the parties. I'm at the after audit party. That's what I get invited to.
Alright, cool. Right there with you. I didn't go to any parties either, but I'm really interested in saving some cash. And this first one, this is a unique deduction we were just talking about during. Commercial break. 30% of Americans have a dog and apparently you can write the puppy off.
Well, there's three or four methods. Probably the most common nowadays is a service animal. A lot of doctors are prescribing that people have a pet for anxiety or depression. And if a doctor prescribes that, your dog could be a service dog and maybe run around at the airport with you too. But it's a write off.
Okay, so I just moved here from Texas. I brought my little dog Rocky and I was joking to him earlier, I said I need him to make me feel good. He's kind of like a therapy dog. He makes me smile. So I would be able to write him off.
Talk to your doctor, see if that is true. If your doctor says, you know what you need this year, you seem very well balanced. But the stress of your job, you might need that little dog for medical reasons.
Okay, so let's talk about clothing and makeup because there are some big changes when it comes to the entertainment world. But we'll talk about the clothing and makeup being able to be written off.
Yeah, yeah. Well, in the entertainment industry, we're in the heart of it here in la. A lot of entertainers, there is an entertainer exception. So if you are in the entertainment industry, you might be able to write off your hair, your makeup, nails and some clothing. And it depends on what type of niche you're in in the entertainment. But a good accountant should be looking to that.
So do you think with a new tax law you have to be, I guess, a little extra creative like for example, if you use, you know, your jet ski and your real estate agent, you take them, you know, you take some clients out there and you show them around the water and the new property, could you write that off?
Well, you used to be able to read it. This is the big hidden issue in the new tax reform bill is that the entertainment expense is no longer a write off. So if you want to go to the, go to the golf course, maybe take a client to the theater, or you can't write that off anymore. You can write off the dining so we can go to dinner, but I can't write off those expenses. As a small business owner, what are
some of the things that you can write off?
Well, now with this new rule, when you're trying to network and a lot of business owners once a week go out with someone and talk business, you can write off the meal, but you can't write off the experience. And I'm looking at the converse of this. What does this do to the entertainment industry? Is this going to have an impact? And topgolf and at the golf courses and also the skyboxes. Verizon can't write off the skybox anymore. You know, that's what it looks like.
And oftentimes companies rent these out. They take all their employees.
Yeah.
So is that something different?
Yeah, it's no longer write off now in 2018. But I think, and I think it's sad because going out and entertaining and talking with your client or a referral partner is a good way of doing business.
Yeah.
Well, now you're gonna just go out to eat. I don't know if you'll have an experience with that.
Wow, that is incredible. So here's the other question that I have. So I recently went on vacation with my family. And as many people have recently gone on their vacations or gone to their families, you know, if they start talking business, money, things that pertain to their small company, can they write the whole trip off?
Possibly. And here is the number one tax write off for Americans. Number one, Rita, you gotta do this. Have a small business on the side, doesn't mean you quit your day job. But are you selling something on Etsy? Are you selling something on ebay? Do you have a small business idea? Even a rental property?
What about a blogger?
A blogger that generates revenue. You know, you gotta have a site that's actually generating revenue. But the beauty is then when you travel with your family, your kids are on your board of directors, you have a small business purpose. Buy rentals where you travel take your kids to go work on the rental.
Good to know. Time to get extra creative.
Mark.
Thank you. We're out of time. You hear that music? We gotta see you.
I'm loving it. Thanks for having me.
All right. Maggie.
I'm not dancing. No, I can't do Lancet. Yeah. Land.
Put your money where your mouth is. Make it rain over there. I'll give you a little less.
