Tax reform is not a common occurrence. Tax reform that results in a complete overhaul that impacts almost every taxpayer in the country is even more unlikely. Yet that is the current climate. Individuals, corporations, businesses … every taxpayer in the country will likely experience an impact from the Tax Cuts and Jobs Act (TCJA).
This piece will focus specifically on some of those impacts to small business owners.
Small business owners: Two tax considerations to keep in mind in 2018
Two specific considerations to take into account when reviewing your business’ tax plan include:
- Quarterly estimated tax payments. The Internal Revenue Service (IRS) has encouraged business owners to review their estimated quarterly tax payments and make adjustments as needed. A failure to pay the appropriate amount can result in unexpected penalties during tax season.
- Passthrough businesses. Another major change involves the impact of tax reform on passthrough businesses. Tax reform may have allowed businesses to take a 20 percent qualified business deduction. Those impacted by this change include businesses that pass their tax obligations to the owner’s personal tax. It is important to note that businesses that operate in the accounting, medical or other professional services may not qualify for this deduction.
Additional considerations include changes to business deductions for meals and the availability of paid family and medical leave tax credits — both discussed in previous posts, available here.
Protect business interests: Get a lawyer
It is important for businesses to take all these tax considerations into account when developing a tax plan. Additional guidance will likely be released by the IRS in the near future. The attorneys with Goldburd McCone LLP, can help to better ensure your business is aware of the impact tax reform will have on your business interests.