Businesses have seen numerous tax changes as a result of the Tax Cuts and Jobs Act of 2017. Some changes apply only to C corporations, some only for owners of pass-through entities, and others for all types of businesses. All businesses would be wise to review the applicable changes so they can take advantage of opportunities and avoid surprises when they file their income tax returns. C corporations The most important change for C corporations is the reduction in their tax rate to a flat 21 percent. This rate applies whether the C corporation is a local mom-and-pop business or a multinational corporation. Fiscal-year corporations, however, continue to apply previous graduated rates to the portion of their year prior to January 1, 2018; the flat rate applies to the portion of the year beginning on this date. C corporations are also relieved of their obligation to figure the alternative minimum tax because the AMT been repealed as of January 1, 2018 . This change …
Bank Rakyat launches entrepreneur programme
asnaf entrepreneurs by equipping them with skills and knowledge needed to expand their business. Launched by Entrepreneur Development and Cooperatives (MEDAC) Minister Datuk Seri Wan Junaidi Tuanku Jaafar, the six-month long programme, which has an allocation of RM2 million, aims to help 200 asnaf entrepreneurs from all over the country increase their incomes. "The programme is in line with the ministry's efforts in helping to develop the capacity and competitiveness of B40 entrepreneurs, including informal entrepreneurs, micro-entrepreneurs and small and medium enterprises, to ensure the recovery and sustainability of business operations as the country faces the Covid-19 pandemic. "Through the programme, more asnaf entrepreneurs could be helped in their bid to improve their economic and social status and drive the country's economic growth,” said Wan Junaidi in a statement today. The RAKYATpreneur 2.0 programme is a continuation of the RAKYATpreneur pilot programme …
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How to Get Your Small Business Loan Forgiven, According to the Paycheck Protection Program’s New Rules
While the U.S. government continues to work out the details of its stimulus programs for businesses, Friday, April 3 marked the first official day that business owners and solopreneurs can apply for Paycheck Protection Program (PPP) loans through their banks or lenders. To help small-business owners sort through the rapidly changing details of the PPP, Inc. and the U.S. Chamber of Commerce are hosting National Small Business Town Halls, a series of weekly live webinars. Register for the third in this series of National Small Business Town Halls, at 12 p.m. Eastern, Friday April 10, here: https://events.inc.com/nationaltownhallevents . This week, Inc. editor-at-large Kimberly Weisul spoke with Neil Bradley, the Chamber's executive vice president and chief policy officer, about what's new in the guidance issued by the Treasury Department Thursday night. Bradley discussed updates on a key point in the legislation: how to use PPP loans to re-hire and …
Why Higher Interest Rates Are Good for Small Business
The Fed is contemplating an interest rate hike as early as mid-year. While small business owners might be tempted to view this as bad news, higher rates can actually be a good thing for entrepreneurs searching for capital. History has shown us that that rising rates positively impact commercial credit. Why? Because financial institutions are reacting to improved overall economy. The Fed only raises interest rates when economic conditions are strong. While interest rates have been historically low for the past few years, a consequence has been that banks became stingy when it came to making loans. For example, according to the Biz2Credit Small Business Lending Index for February 2015 , big banks ($10 billion+ in assets) approved 21.5% of funding requests, a high mark since my company began the monthly study of loan approval percentages in 2011. This means that nearly four-of-five applications are rejected by big banks. Low interest rates translate into lower profits when …
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Why Employee Wages Mean Even More to Business Than You Think
If you want to see i nterest rates go up, raise your wages. That was one of the key takeaways from a sit-down talk with New York Federal Reserve President William Dudley on Wednesday. Dudley spoke with Reuters editor-in-chief Stephen Adler in a question and answer session in Manhattan, about the state of the economy and the prospects for an interest rate hike later this year, which Fed watchers say may be delayed after an underwhelming jobs report last week. “Unemployment is too high and inflation is too low, and that gives us the ability to wait a bit longer,” Dudley said, hinting that a rate hike was a distinct possibility in 2015, but perhaps not as soon as the next meeting of the Federal Open Market Committee in June. The Fed would also like to see inflation of around 2 percent, and unemployment at more historical levels, below five percent. Early data suggests that the economy grew at a sluggish 1 percent rate in the first quarter , far below the average 2.7 …
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Taxes for Business Owners Are More Complicated Than Ever. Here’s What You Need to Know
The first tax season where taxpayers will experience the full effect of the Tax Cuts and Jobs Act is here, and soon the economic results will be scrutinized. Business owners were a central demographic component when the bill was put together. The idea was to incentivize small businesses, lessen their tax burden, and create growth. Whether or not this is happening is hotly contested. But, fiscal rewards aside, small-business owners should plan on taxes taking extra time and attention this year--two of the rarest commodities for busy entrepreneurs. Below are some tips on how you can stay out of the weeds and focused on your business this tax season. What's New for Small-Business Owners Corporate provisions comprised some of the most sweeping changes in the tax reform. The most critical factor in determining how your business will be taxed is the structure of your company--and which structure is best has been vastly changed by the tax reform. For …
Tax Reform: What You Need to Know About A Common Business Deduction
As an entrepreneur, I know the importance of maintaining and growing a client base. In some industries, it's everything. Especially for small businesses, having engaged clients can mean the difference between a successful trajectory and closing up shop. Since tax reform eliminated business expense deductions for entertainment--with the exception of meals--you may be feeling the pinch of engaging your clients. And, while the 20 percent pass-through deduction can help offset some of the consequences (unless, of course, you operate a C corporation ), corporate budgets may be in for big changes this year. What Small Business Wwners Can Expect From the New Tax Law If you've been in business for a long time, you may remember the heyday of client entertainment tax deductions. Business-related entertainment expenses have moved from completely deductible, to 80 percent deductible, then 50 percent deductible, and now we're left with only meals--so long as they aren't …
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These 4 Popular Business Deductions Have Disappeared or Been Reduced Under New Tax Law
As small business owners compile their income tax returns , they may have an unpleasant surprise -- some popular business deductions have disappeared or been reduced under the new tax law. While the law gave small business owners new tax breaks including a 20 percent deduction in income for many sole proprietors, partners and owners of S corporations, Congress took back deductions for entertainment expenses, employee transit benefits and what are called net operating loss carrybacks. It also put ceilings on interest deductions for some businesses. Accountants and tax attorneys suspect small business clients to especially miss the break for entertaining clients and customers. "I think they're going to be shocked at how much more they didn't get as a deduction," says Joseph Perry, a certified public accountant with Marcum in Melville, New York. A look at the disappearing deductions: Interest There is now a limit on how much interest businesses can …
How Your Business Taxes Will Change Under the New Republican Tax Plan
The Republican agreement on a tax bill gives many small company owners breaks on their business income taxes and allows them to deduct a larger portion of their equipment purchases. But many owners are also losing out on savings including the ability to deduct all of the interest they pay on loans. The agreement includes a potential tax break for business owners who have sole proprietorships, partnerships and companies structured for tax purposes as S corporations; these owners report business income on their individual 1040 returns. Under the GOP deal, they can deduct 20 percent of their business income, but the size of the deduction starts to decline when an individual owner's taxable income reaches $157,500. Accountants, lawyers, financial advisers and some other professionals won't be able to take the deduction . Companies that are C corporations -- which include all of the Fortune 500 companies as well as some small businesses -- will be taxed at a rate of 21 …
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The 6 Best 2019 Tax Moves for Your Business
2018 is all over, and if you're like my smartest clients you're focusing on ways to cut your taxes for 2019. You're not? That's a shame, because your taxes count for, what, 20 to 30 percent of your income, right? They're probably your single biggest expense in a year. But with a few moves now you can minimize this expense . What moves? Try these: 1. Buy capital items. Most small and medium-size companies can deduct up to a million dollars of purchases for capital equipment, certain autos, computers, off-the-shelf software, and other business property using the Section 179 accelerated depreciation rules. But the secret here is that you don't actually have to buy it all with your cash. Even if you finance a capital equipment investment (and interest rates are still attractively low) it's still deductible. You just need to make sure the item is put into service by the end of the year. 2. Take advantage of the Work Opportunity Tax Credit...while you still can. …
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