Many business owners are worried about the new tax bill and what it means for them. The new tax law means some changes will have to be made. Business owners will have to watch their deductions and how they prepare for their taxes next year.
Here is what you can expect as a business owner when it comes to the new tax bill.
1. The maximum corporate tax rate will decrease permanently.
Instead of staying at thirty-five percent, they will decrease to twenty-one percent.
The goal is to allow companies to keep more of their money so that they can use that money to grow, creating more jobs.
2. State and local tax deductions are going to change.
Most families will only be allowed up to ten thousand dollars in deductions when it comes to property and income taxes. This will affect businesses and the state that we live in.
States may struggle to get enough money for the things that they need. Many are worried that our schools and businesses won’t get the help that they need through the state.
3. You will be taxed according to your own personal rate.
For most businesses, you will be taxed at twenty-percent.
However, this law will only last until 2025.
4. If you work overseas, your business will not be taxed on the profits that you make elsewhere.
You will only be taxed on profits you make in our country. This is a game-changer for businesses who do most of their business overseas.
It may impact our federal government, though we might not see any changes for quite some time.
5. You no longer have to carry health insurance or pay a fee.
Some people felt stuck with the Affordable Care Act. They either thought that they didn’t need health insurance or they couldn’t afford it. Now, the choice is yours.
If you run a business with employees and you want to offer them health insurance, you have to be aware that it might cost you more than it did before.
6. If you have employees, you are going to have to look into your withholdings for their paychecks.
You should make any necessary changes immediately or your employees may suffer when tax time rolls around next year.
Instead of the current twenty-five percent, federal taxes may go up to twenty-eight percent.
If you don’t take more withholdings out of each paycheck, they may be stuck paying a lot of extra money at the end of the year.
7. You may have to take another look at the perks that you offer employees.
You won’t be able to deduct the full amount of food and beverages that you offer to your employees. You are allowed a fifty-percent deduction, though after 2025, you will not be able to take any deductions for food and beverages.
In order to make sure that you and your business are prepared for the new tax bill, you should consult with a tax professional or financial advisor.
He or she will help you get your business on track so that you don’t get caught unaware next year when it comes time to pay your taxes!
Contact us for all of your bookkeeping and accounting needs. We would be happy to help your business, both at tax time and throughout the entire year!
We will also help you so that you are more prepared for the future.