Tax Cuts, the Jobs Act, & Your Small Business
Taxes are always at the top of a small business owner’s mind. The Tax Cuts & new Jobs Act have got many small business owners who offers remote jobs wondering how these new changes will effect their liabilities, benefits, & employees in 2018 & beyond. We’ve compiled a few ways these new systems might impact your business.
1. Requirements for withholding payroll
Have your employees complete new W-4 forms as soon as possible as the new laws are already in effect. The new tax bill has gotten rid of personal exemptions & has raised the standard deduction 2X & these have changed the withholding recommendations. So you may have to adjust the amount of taxes withheld on your employee’s paychecks. If you need more legal and professional information, you can get in touch with experts from National Loans Melbourne.
2. Itemized deductions may be a thing of the past
As mentioned above, the new tax bill has doubled the standard deduction. This means that you may not have to itemize your expenses. Some deductions have changed while others have been made unavailable, so your itemization will be different whether you choose to itemize or not. For some, itemizing may simply no longer benefit you.
3. Changed rates
Certain businesses have had their tax rate change for the year & into the future. C corps will see a considerable drop in corporate tax liability. If you own or operate a LLC, S corp, or sole proprietorship, the drop in corporate taxes will not affect you. However, individual rates have changed. You may see different liabilities in your personal tax return.
4. Deduction of business income
If you receive income through a pass-through entity, such as a sole proprietorship, S corporation or LLC, you may be eligible for a new deduction because of the Tax Cuts and Jobs Act. The bill creates a deduction that allows business owners to deduct 20 percent of their business income, which means your tax liability may be reduced.
5. Changing bonus depreciation
Bonus depreciation allows business owners to deduct a sizable portion of a new asset’s cost in the year it was purchased. Before this tax reform was passed, bonus depreciation was capped at 50 percent. However, the new tax law will allow business owners to deduct 100 percent. This limit increase will remain in place through 2022.
These are only a few of the changes you might notice coming from the Tax Cuts and Jobs Act. Learn more about how these new laws may affect your business by contacting OC Bookkeeping today!
OC Bookkeeping is here to help with all of your business and personal financial planning needs, no matter the stage or size of your company. So reach out and contact us and we’ll help guide you through the unpredictable future. As tax professionals, it’s our job to understand and follow the changes of any administration and will continue to work for your financial best interests. If you have tax questions or a tax debt you are unable to pay, our experienced tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at www.ocbookkeeping.com or call us at 877.889.6527. Our CPA’s, Enrolled Agents and other skilled accountants have a thorough understanding of tax law together with the experience necessary to know which tax settlement option will be the best fit for your specific set of circumstances.