Winter is finally here, which is hard to believe given the lack of snow this year where I live. I am not one of those people who hates winter or summer — I try to find activities to do regardless of the season. Growing up in Montana, I have always loved skiing as a winter activity. So of course I want my son to love skiing as much as I do, and that takes practice. As I work toward the goal of helping my son enjoy skiing as much as I do (so we can spend our days up on the hill without his instructor), many things come into play. Hopefully my goals and his goals will line up, which is looking very promising.
Last week we executed our thorough plan and arrived early to the ski hill, only to find that parking was worse than it had been all year. Apparently, this happens when fresh snow comes down before an extended weekend. As I drove up and down the rows hoping someone only wanted to ski in the morning, I was reminded of the changes to the Qualified Transportation Fringe Benefits under the Tax Cuts and Jobs Act (TCJA).
This change no longer allows employers to deduct expenses for providing free parking or mass transit costs to employees. The change also includes the expenses related to employer-owned parking lots, for which the IRS has provided guidance (IRS Notice 2018-99), calculating a reasonable method to determine the cost associated with employee parking in a four-step process.
This four-step process requires you to calculate the disallowance for reserved employee spots, determine the primary use of the remaining spots (the “primary use test”), calculate the allowance for reserved nonemployee spots and determine remaining use and allocable expenses.
This is just one of the many changes that has come out of the TCJA. As we enter our second tax filing season for calendar-year filers, it is a good time to review the changes in your business and how it may be impacted by the new tax law. Wipfli is here to help you with this review, understand the tax law and plan for the future.