The new tax reform bill has brought on a myriad of changes for small business owners. Use our 2019 tax guide to create a strategy to lower your tax bill and avoid penalties.
In 2017, Congress overhauled our tax system and passed the Tax Cuts and Jobs Act — The biggest change to tax law since 1986. While some of the biggest changes mainly affect larger companies, there are a number of adjustments that will impact sole proprietors, LLCs, and other types of small businesses.
There are two significant 2019 tax law changes that business owners should be aware of. First, if your business is classified as an S corporation, partnership, or sole proprietorship, your new tax rate is 20%. This means that under the new law, pass-through businesses that generate less than the income limit ($315,000 in income if married, or $157,500 if single), will be able to deduct 20% of their income. For example, if your small business generates $100,000 in profits, you’ll be able to deduct $20,000 from your income taxes.
The second biggest tax change for small businesses is that some key deductions are either going away or have stricter requirements. For example, expenses from entertaining clients are are no longer deductible and there are new, complex restrictions on deducting interest paid on business loans.
The first step to getting ready for the 2019 tax season is to stay organized and prepare early. Our downloadable guide contains tips and a full checklist of to-dos for business owners looking to lower their tax bill. Get your copy of the guide to find tax credit options that you may have missed, get tips on how to find a CPA, and to learn a simpler way to track and organize your expenses.