Whenever new tax laws are passed, news outlets struggle to accurately report how the changes will affect small businesses. Don’t get lost in the misinformation – come to us.
At Robert L. Coval, CPA, we will help you understand how the sweeping tax reform will directly affect your small business, both for this immediate tax filing in 2018 and beyond. While we can offer a more complete picture during a free consultation, here is a quick list of the changes you’re going to see in the coming months and years:
Boons for Pass-Through Businesses
Sole proprietorships, limited liability companies, partnerships, S corporations, and other pass-through businesses are going to see a boost in their deductions in 2018. The standard deduction for these businesses is now 20 percent, as long as their income stays below $157,500 for single filers and $315,000 for joint filers.
Go for the Big Purchase
If you’ve been holding off on making an expensive purchase for your business, now is the time. Any assets purchased after September 27, 2017 through December 31, 2022 are eligible for a 100 percent deduction. This write-off now extends to used equipment as well as new.
Fewer Client Entertainment Deductions
You can still claim a 50 percent deduction for taking your client out to lunch, but a round of golf will no longer deliver the same tax benefit. The sweeping tax bill has eliminated the 50 percent deduction on client entertainment expenses, restaurants not included.
Slashed C Corporation Tax Rates
C corporations’ tax rates won’t be amended at all in time for your 2017 filling, but you’re getting a major tax cut effective January 1, 2018. C corp tax rates plummeted from 35% to 21%, applicable to both small and large businesses. This could have a positive effect on your cash flow this year. Game plan with our team about how changes to next year’s filing can free up funds to put towards immediate business initiatives.
Don’t Go It Alone
The new tax bill has left many business owners confused as they struggle to clearly understand how the new changes directly affect their finances. Our advice? Get some professional help from an accounting team that knows business taxes: the team at Robert L. Coval, CPA. It’s our job to understand these developments and we’re good at explaining it in a way that makes sense. Let’s analyze how to maximize the new tax bill changes to your small business’ benefit. Get in touch today.