Tax season is finally upon us, and with it comes the need to stay up-to-date on all the latest tax laws. In this blog post, we’ll take a look at what’s new in Sage Fixed Assets 2021.1 – the latest edition of our flagship accounting software – and how it might impact your business. From updated asset categories to new deductions and credits, we’ve got you covered. So whether you’re a small business owner or an accountant, be sure to check out this year’s updates!
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In Brief: Minor Tax Updates in Sage Fixed Assets
1. In Brief: Minor Tax Updates in Sage Fixed Assets
With the recent passage of the Republican tax reform plan, many taxpayers may be wondering how it will impact their individual tax filings. While there are a number of sweeping changes included in the new law, most notably the reduction of the corporate income tax from 35 percent to 21 percent, some less noticeable updates have also been made to federal tax laws with respect to property and casualty (P&C) insurance. Here are four P&C insurance-related updates that you should know about:
1. The change in basis for casualty losses. Under prior law, an owner of property damaged by a covered peril could use either their adjusted basis in the property before the damage occurred or its market value at the time of damage, whichever was greater. Beginning this year, however, an owner will only be able to use their adjusted basis in the property–not its market value–for purposes of recovering casualty losses. This change is significant because it could result in lower recoveries for some claimants if their property had a low Adjusted Basis Value (ABV) at the time of damage.
2. The limitation on treating rebuild costs as deductible repairs under Section 179(a). Generally speaking, any expenses incurred during a taxpayer’s “rebuild” period after a casualty loss are treated as deductible repairs under Section 179(a). This includes both contracted and un-contracted costs associated with completing necessary repairs such as replacing
Depreciation and Amortization Changes
Depreciation and Amortization (D&A) changes are some of the more important updates in Sage Fixed Assets 2017. Here’s a look at each:
Depreciation and amortization (D&A) allowances are new features in Sage Fixed Assets 2017. D&A allowances let you reduce or eliminate the amount of depreciation expense that you would otherwise be required to write off on your tax return. You can create D&A allowances either as part of your original asset acquisition plan, or as an adjustment to that plan after the fact.
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The benefits of using D&A allowances include:
– Reduced taxable income – You may be able to reduce your tax bill by claiming depreciation deductions that you would have otherwise taken.
– Easing cash flow requirements – Claiming allowable deductions now allows you to avoid having to make costly payments in later years.
– Reducing maintenance costs – Claiming depreciation deductions now can help defer some expenses associated with aging assets, such as repairs and replacement.
Sage Fixed Assets offers several ways to calculate D&A allowances: Straight Line, Decline Base, Uniform Rate, Percentage of Cost Method and Accelerated Cost Recovery methods. There is also a Leasehold option for property leased for more than one year that lets you use the declining balance method for computing D&A allowance amounts.
Sage Fixed Assets 2017 includes new guidance on when a property qualifies for the MACRS property classification system under Section 168
Stock Valuation Changes
1. Sage has released new fixed assets software that includes updated tax guidance from the IRS.
2. The new software includes features to help manage depreciation, amortization and depletion for business owners.
3. The new software also includes support for stock valuation changes.
Estate Planning Changes
1. Sage Fixed Assets now includes tax updates for the 2018 tax year.
2. In addition to updated deductions, Sage Fixed Assets now features Tax Cuts and Jobs Act-related exclusions and adjustments.
3. For individual taxpayers, the software now includes a new retirement planning module to help you account for both traditional and Roth IRA contributions.
4. Other enhancements include changes to depreciation rates, special rules for real estate investment trusts (REITs), new guidance on charitable contribution deductions, and more.
Other Tax Updates
1. In Sage Fixed Assets, you can now specify the depreciation method for both depreciable assets and fixed assets placed in service during the year.
2. You can also create and use depreciation schedules to track the depreciation of your assets over time.
3. You can now link certain accounts to your Sage Fixed Assets account in order to keep track of income and deductions related to those accounts.
4. The addition of journal entries for settling transactions has made tracking your financial position much easier, and has made it possible for you to produce a complete financial statement for your business or organization at any given point in time.
5. Several bug fixes have been made, including some that were reported by customers who have used the product in their businesses .
