Tax Reform: What it Means for Your Small Business
Tax reform small business initiative. Was it a win for small business?
Make no mistake about it: the world of tax reforms was shaken up during this past year, and as a small business you may want to pay attention to what that will do to you and be prepared to face it.
Just last year, the tax reform small business initiative was passed, turning the small business world on its head. Some of these small businesses will get a good break out of this change, and others...not so much.
So where does this leave your business?
If you feel like you need answers (and you should), look no further than this article to get them.
How the Tax Reform Small Business Initiative Will Affect Your Business
Once you learn how the new initiative will affect your small business, you can know how to plan your next course of action. Keep reading to learn more about it.
It's All About the Business
The first thing to recognize is that each business is filed into different categories, and these categories will help you determine the future of your business.
If your business is listed as a C-Corporation (C-Corp), then you will most likely see a benefit to your company with this new law. C-Corp companies have to pay double taxes, so the tax reform with help ease the pain of paying for them.
The law states that C-Corps are taxed at the flat rate of 21 percent, which is better than the fluctuating 15 to 35 percent it used to be. At least now you know exactly how much you'll be paying from here on out.
The downside to this is that most small businesses are not labeled as a C-Corp company. In fact, the average small business is a Limited Liability Company (LLC) or S-Corporation (S-Corp), so they aren't affected by it.
The good news is that these companies aren't being left out. Businesses that pay for new equipment can now deduct up to $1 million in equipment expenses. That's a serious upgrade from the max of $510,000 of last year.
What's even better, the new law lets you take the deduction over 5 years, whereas before it was only good for the year the equipment was bought, and it covers both new and used equipment.
In short, even though some businesses may get more than others, they all will get some sort of benefit from the new reform. And there's nothing to complain about that.
For All of Your Small Business Needs
You know everything there is to know about the tax reform small business initiative, and how you'll be affected by it. Now, it's time for you to find someone who can help you take this new tax reform head-on.
At Scrubbed, we make it our top priority to bring only the best services to the businesses that need it. We specialize in a number of services, including tax preparation, white label accounting, financial reporting, and so much more.
Ready to make a move? Just reach out to us for a free consultation and start getting your business on the right track to success. We look forward to hearing from you.