Personally, being in the industry, I believe the former over the latter. In my experience, businesses are investing in themselves, and I do believe that it’s partially due to the lower taxes the Tax Cut and Jobs Act brought about.

And this brings me to mentioning Section 179 again, because it’s aligned to form the perfect financial storm this year. And, like a hurricane, I’m even naming that perfect storm – “The 2018 Tax Cut and Section 179 Double Dip”. And it works like this:

Most businesses got a healthy tax cut, and find themselves with more funds than they expected to have. This is a great thing. And many of those businesses are using this money saved on taxes to reinvest in themselves by buying new (or new to them) equipment. That’s the first half of the storm.

But like a hurricane, the path can often circle back and hit again. This is the second half – businesses who used the tax savings to buy equipment can now deduct the full price of that equipment using Section 179 (which was raised to one million in the Tax Cut and Jobs Act). So they get to keep more of their money, which means they are technically double dipping (in a good way). They get tax savings, and use those tax savings to get MORE tax savings. Plus they get the new equipment. It’s win / win / win.

I’ve been writing this blog for more than a decade, and I’ve never seen a better time than 2018 to buy new equipment and use Section 179. It’s the perfect storm, and you should take advantage of it before it blows away.

Here we are in 2018, and you know what that means: another edition of Fletch Predicts!

I always do sports, and I was on a roll for a while. I predicted basketball and baseball right in 2016, and then I nailed the 2017 Superbowl – three in a row! Things were really looking up, but then I crashed back to earth, and haven’t hit on anything since. But that never deterred me – let’s get to it for 2018.

Starting with the Superbowl – there are a few teams that look strong: you have the Patriots, who are always there. The Eagles are surprising, and they may have an old NY Giant vibe, when a backup quarterback named Jeff Hostetler led them to a Superbowl win against the Bills in 1989. Can Nick Foles do the same for Phili?

But I’m going with an unconventional pick. I like the Minnesota Vikings to become the first team to play the Superbowl on their home field. They will play the Pittsburgh Steelers in a rematch of the first Superbowl a young Fletch watched start to finish! And this time, the Vikings will win!

Hockey – to me, that’s the hardest sport to predict, because it all depends on momentum and the hot goaltender. Right now, the Tampa Bay Lightning look very strong. Let’s go with them.

Basketball… I like the Houston Rockets to make a big leap, and grab the title. They will play the Celtics in the finals. LeBron finally gets to rest in late spring.

Baseball – all NY Yankees, all the time. They already had a modern day Murder’s Row brewing with Aaron Judge and company, and adding Giancarlo Stanton to the mix may just set a record for home runs in a season. It should be fun if you’re a Yankees fan, and, of course, for you Yankee haters, there’s more to hate!

Now that sports are done, let’s go into the economy: As you know, H.R.1, The Tax Cuts and Jobs Act, recently passed, and while the full effects on everyone won’t be known for a while, I like it for businesses, and I do see a steady economy for the next year. The business climate is quite good, and confidence is high, so that always helps. 2018 should be a good year for most industries and companies. And Section 179 will be there all year, sitting pretty at $1,000,000, thanks to a nice bump from the above-mentioned bill.

I’m not sure what to make of the Bitcoin phenomena, and I can’t pretend to even fully understand it, but it and other Cryptocurrencies deserve watching. This is on my “need to know” list for 2018. Put it on yours too.

Last year, I thought Virtual Reality would make big strides, and gaming companies like Microsoft and Sony proved that prediction accurate by embracing that technology in a big way. I also thought 3D printing would be more mainstream, but it hasn’t quite caught on as much yet. But it will – it’s inevitable.     

So there you have it – some predictions for 2018. I hope you had a great New Year, and are ready to hit the ground running!

H.R.1, aka the Tax Cuts and Jobs Act, passed, and it means some sweeping changes for businesses.

Now I’m not going to comment on the other aspects of the bill, like Health Care, bracket changes for individuals, how much it means to a family of four, and similar. You can find strong opinions on that everywhere online, with the requisite arguing back and forth in the comments.

What I will comment on are two fairly important aspects that will help businesses, plus one of my favorite pieces of the tax code got a nice lift (take a guess what I’m talking about…).

First up is the Corporate Tax Rate, which was cut an astonishing 14%, representing the largest one time cut in history. The new corporate tax rate is 21%, and it’s going to make a big difference to a lot of companies, especially larger companies who employ hundreds and thousands of people. I know it’s popular to rail against corporations, but you won’t find me doing that – they are massive employers, they buy and sell countless goods and services, and if they suffer, the economy as a whole will suffer.

Second is the nod to small and medium businesses. The bill allows owners of “pass-through” companies (which comprises roughly 95% of American businesses – S corporations, LLCs, partnerships and sole proprietorships) to deduct 20% of their pass-through income. This begins to phase out at $315,000 for married couples and $157,500 for individuals. There are also some provisions limiting service based businesses like investment and law firms.

A little commentary, if I may. Again, it’s popular to bash the above as lining the pockets of the wealthy. But if working with small and medium sized businesses has taught me one thing, it’s this: if you allow a typical business owner to keep more of the money the business earned, invariably it will be reinvested in the business. Some do this by buying equipment (and I see a ton of that), others will update their website or their store, still others will move to a better location, and maybe some others will take on a talented employee they could not previously afford.

Contrary to the hype, what business owners by and large do not do is hoard money. They spend it instead.

Oh, and my favorite part of the tax code, Section 179, gets a nice boost, going from $500,000 to a cool $1 million! And the “total equipment purchased” cap is increased from $2 Million to $2.5 Million. Sweet!

Whether the tax bill is good for everyone over the long term is open to debate, but the positive implications for business are undeniable.