Our CEO Maury Riad sat down with Lawrence Kweit of Kweit, Mantell & DeLucia, LLP to discuss how the new tax law affects interior designers and interior design businesses.
- If you're the owner of a design business, you probably will end up paying more in taxes unless you live in a state with a low state income tax and do not pay property tax.
- You can deduct up to 20% of your adjusted gross income if you make under certain limits (currently $157,500 as an individual or $315,000 married), but it's probably not enough to offset any increased tax burden due to the above point.
- While you can still deduct up to 20% of your income if you make over the limit, a complicated formula (based on the wages paid by your business) kicks in to determine how much you can deduct. Bumping up your retirement savings can actually make you money by reducing your adjusted gross income below the limits. You should talk with an accountant to see what you can do.
- Some of designers' favorite business tax deductions—such as deductions for client entertainment expenses or for buying meals for you or your employees—are reduced or removed by the new law.
Check out the whole discussion below: