How Recent Tax Law Changes Impact Small Businesses

Changes to Corporate Tax Rates

Recent legislation has adjusted corporate tax rates, providing potential savings for small businesses. Understand the new rates and how they apply to your business structure.

Updates on Deductible Business Expenses

There have been significant changes to what can be deducted:

• Meals and Entertainment: Only 50% of meal costs are deductible, and entertainment expenses are no longer deductible.
• Depreciation: Immediate expensing is now available for more assets, allowing faster recovery of costs.

Modifications to the Qualified Business Income Deduction

The QBI deduction allows eligible businesses to deduct up to 20% of their qualified business income. Ensure you understand the qualifying criteria and how to calculate your deduction.

New Rules for Employee Benefits and Payroll

Changes to fringe benefits, such as transportation and meals, could impact your payroll tax calculations. Stay compliant by updating your benefits offerings according to new guidelines.

Tax Credits and Incentives

New or expanded credits can benefit small businesses:

• R&D Credit: Expanded to cover more types of research and development activities.
• Energy Efficiency: Credits for investing in energy-efficient equipment and practices.

Impact on Retirement Plans

Changes to retirement plan rules could offer benefits to small business owners and employees. Explore options like increased contribution limits and new types of retirement accounts.

Navigating Compliance and Reporting Requirements

Ensure your business meets all new compliance and reporting requirements. Keep updated with filing deadlines and required documentation to avoid penalties.

Stay ahead of the curve by working with a tax professional who can navigate these changes and optimize your tax strategy. Contact us to ensure your business is fully compliant and takes advantage of all available benefits!