With politics and the federal government continually shifting the way businesses are taxed, it’s important to know what President Trump’s tax cuts can mean for your small business. The Tax Cuts and Jobs Act of 2017 has many benefits and drawbacks for small businesses. By knowing the ins and outs of this new law (effective for the 2018 business tax season), you can effectively talk with your tax professional to make the most of your business tax return.

 

If you’re looking for help with your business’s taxes, you’re in the right place. BizBooks4U has the best tax service in Tarpon Springs.

 

The Pros to the Trump Tax Cuts

The way that your business is structured affects how the act applies to you. Below are some benefits that these deductions can have on your business.

 

  • Income Tax Rate Reduction for Corporations: Under the new act, the corporate tax rate has been drastically reduced from a schedule by 18.6 percent. This benefit really matters when your business has an income of over $260,000. Anything less than that is equal to that of the personal tax rate and doesn’t experience a significant benefit.    

 

 

  • New Additional Tax Deduction for Other Business Types: A Section 199A deduction, more commonly referred to as a new business income deduction, is available to small businesses as of the 2018 tax season. The tax paid by the business passes through to the owner’s tax returns, which is called pass-through taxes. As a result, small businesses see a 20% deduction from net business income, in addition to all other business expense deductions.

 

  • Higher Levels of Write-Offs for Buying Equipment and Autos: According to The Balance Small Business, Congress has changed the amount businesses can deduct assets like equipment and vehicles, which depreciate in value, in order to incentivize businesses to buy. The amount of deductions that small businesses can make has also been increased as part of the act (Section 179).

 

  • New Cash Accounting Provisions: Rather than accounting for money as if it has already been received at the time that it has been invoiced, the new law allows more businesses to use cash accounting practices, only accounting for income received and expenses paid for.

 

 

  • New Family Leave Tax Credit: Put simply, small businesses can now get a tax credit for allowing its employees family leave benefits. This is only available for 2018 and 2019 and is only valid if family and vacation time policies are written and contractual.

 

 

A great way to utilize all aspects of this act to your advantage is to consult with a qualified, knowledgeable accountant in Tarpon Springs who has an extensive understanding of the laws surrounding small business tax laws.

 

An accountant can help you identify how to file your taxes and make financial claims, all while staying cognizant of the limits and qualifications that are required to meet this new deduction.

 

The Cons to the Trump Tax Cuts

The advantages and disadvantages of the act are not one-size-fits-all. The Trump Act also imposed limits on certain types of businesses, leading to the below list of drawbacks.

 

  • Lower Interest Rate Deduction: While smaller companies are largely exempt from this restriction on interest rate deductions, larger corporations are limited to 30% of the company’s earnings before interest, taxes, and other financial considerations.

 

 

  • Commuting Expense Deduction Eliminated: Benefits that some businesses have offered to their employees are expensed commuting benefits, such as bike commuting, parking, or carpooling. At one point, these benefits were tax deductible, but under the new act, they have been cut.

 

  • Business Tax Credits Cut or Reduced: Employer-provided childcare tax credits were formerly available to small businesses but have now been cut.

 

How a Professional Accountant Can Help You Make The Most of It

 

You don’t need to know every aspect of the new act and what it means to you. The best thing you can do for the success of your business, especially when it comes to tax season, is to ask a professional for advice.

We have the best tax service in Tarpon Springs. You can choose from our many services tailored to small businesses, and we will guide you through it. Our main services include:

 

  • Bookkeeping
  • Quarterly taxes
  • Business tax deductions
  • General businesses accounting

 

No matter your business’s financial structure, we, the best tax service, can help. We are dedicated to providing personal attention, detailed reports, and our extensive experience, all at affordable prices. Our comprehensive professional tax preparation and bookkeeping services in Tarpon Springs can help you get back to doing what you love and growing your business! Call us today at 727-939-1044 or online, so you can finally stop worrying about your company’s finances.