As a small business owner, it’s important to stay on top of any changes in tax law. Even if you hire an enrolled agent to prepare your return every year, knowing how the latest tax reform bill might affect your bottom line will help immensely with financial planning. Below, the experienced team at Burch & Associates, Inc. in Lincoln, NE, shares a few facts all business owners should know about the most recent tax reform.  

3 Changes in Tax Law You Should Know as a Small Business Owner

1. Bigger Write-Offs

Businesses now have the opportunity to write off a larger percentage of any major equipment purchases immediately, as opposed to depreciating them over a period of several years. Prior to the most recent tax reform, you could only deduct $510,000 annually in equipment purchases. Now, an enrolled agent can help small business owners write off up to $1 million in equipment and deduct 100% of their expenses up front. 

2. Better Credits for Providing Certain Benefits

To encourage employers to provide paid leave, the new tax plan has a credit for wages an employee receives while on family or medical leave. Depending on the total amount paid, this credit ranges from 12.5% to 25%. This policy is only going to last through 2019, though, so small business owners have limited time to take advantage of it. 

3. Lower Tax Rates

If you operate a pass-through entity, like an S corporation, LLC, partnership, or sole proprietorship, you can take a 20% deduction on the income that “passes through” to your personal tax return. For C corporations, a flat tax rate of 21% has replaced the graduated structure, which included tax obligations as high as 35%. 

To ensure your tax planning strategy for the current year incorporates all the changes that apply to your situation, turn to an enrolled agent at Burch & Associates, Inc. in Lincoln, NE.  They are proud to provide comprehensive tax services for small businesses in virtually every industry throughout Lancaster County. Visit their website to learn more about how they can help your company, or call (402) 483-4791 to discuss your needs with a seasoned accountant today.