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Top 5 Small Business Tax Changes

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Sandy Botkin

Co-founder at Taxbot
Sandy is a CPA, Tax Attorney, and former IRS trainer. He has authored many helpful books on the subject of taxes, including 7 Simple Ways to Legally Avoid Paying Taxes ( Click Here ), Lower Your Taxes: Big Time ( Click Here ), and Real Estate Tax Secrets of the Rich ( Click Here ).
Sandy Botkin
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Top 5 small business tax changes resulting from the new tax reform law:

I will be doing a series on the 5 biggest tax changes that result from the new Tax Cut and Jobs Act legislation:

1Take advantage of the lower tax rates: Prior to the new law, regular C corporations were taxed at a graduated rate structure with the top rate being 35% The new law replaces this rate structure with a flat rate of 21%. Thus, the effective tax rate for C-corporation was significantly lowered.

Thus, operating as a regular corporation is much more desirable.

2Max out your expenses deduction under section 179 of the Internal Revenue Code: One of the great benefits of being self employed is that you can use and depreciate a lot of business toys such as cars, cell phones, desks, furnishings, equipment in business and much more. The new law almost doubles the maximum amount that you can expense equipment that you buy in a year from $510,000 to $1 million for 2018. Moreover, in prior years, if you purchased over $1 million worth of equipment, this expense election phases out dollar for dollar over $1 million worth of purchases. The new law expanses the phaseout to be over $2.5 million which will be indexed for inflation.

Result: Many small businesses can deduct the entire cost of qualified property placed in service during the year. 

NOTE: This deduction will still be limited to your income from your businesses.


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Sandy Botkin

Sandy is a CPA, Tax Attorney, and former IRS trainer. He has authored many helpful books on the subject of taxes, including 7 Simple Ways to Legally Avoid Paying Taxes ( Click Here ), Lower Your Taxes: Big Time ( Click Here ), and Real Estate Tax Secrets of the Rich ( Click Here ).