Read This To Learn About The Business Tax Cuts That 50% Of Small Business Owners Aren’t Aware Of.
You’re probably entitled to a number of beneficial tax breaks thanks to the Tax Cuts and Jobs Act – but are you taking advantage of them?
It’s tax season again, and for many of us, that means more work and more stress to get everything in order. Taxes rarely mean good news, which is why most people tend to avoid thinking about them unless they absolutely have to. It’s because of this bad reputation that many have overlooked the tax breaks made available by the Tax Cuts and Jobs Act.
Balboa Capital recently conducted a survey of small business owners to find out how much they know about the Tax Cuts and Jobs Act (H.R.1) and what it means for their business. The Act was signed into law late last year on December 22nd, and yet, half of the surveyed business owners aren’t entirely aware of the effect it could have on their livelihood. At the same time, 70% of those small business owners have plans to invest in 2018.
What do these stats have to do with one another? The truth about The Tax Cuts and Jobs Act is that it offers a number of beneficial tax breaks that will make it easier for businesses to invest this year and grow their capital.
Highlights of the Tax Cuts and Jobs Act include:
21% permanent corporate income tax rate, down from the previous 35% maximum tax rate.
30% cap on business interest deduction before EBITDA.
Increase in Section 179 deduction limit, from $500,000 to $1 million.
100% bonus depreciation limit on qualifying business equipment through 2022.
$2.5 million spending cap on qualifying equipment purchases.
100% bonus depreciation that applies to qualifying equipment placed into service on or after September 27, 2017.
Qualifying used equipment is now eligible for bonus depreciation.
Elimination of income tax deductions for Business Entertainment, Bicycle Programs, and Local Lobbying Expenses.
“Staying up-to-date with the ever-changing tax laws can be challenging for small business owners,” said Carla Freberg, Vendor Services Manager at Balboa Capital, to PRWeb. “The results of our latest survey show that small business owners have different levels of awareness of the latest tax overhaul. That said, the overall outlook for 2018 is positive, and many small business owners believe the lower tax rates, and higher Section 179 deduction limit, will enable them to invest in their companies with greater confidence”.
50% of small business owners are “not familiar” with the Tax Cuts and Jobs Act; 39% are “somewhat familiar,” and 11% are “very familiar”.
A third of small business owners believe that the new pass-through tax deduction provision means a lower corporate tax rate for them. Only 2% of small business owners are under the impression that they will have a higher tax rate.
70% of small business owners have made plans to invest in their companies throughout the current year.
Small business owners that are counting on a lower corporate tax rate in 2018 have made varied investment plans for their business capital. A little under half of these plan to buy or lease new business equipment, vehicles, or technology; 34% plan to grow their operations; and 20% will invest in more comprehensive marketing efforts.
A little over one-fifth of small business owners that receive a corporate tax break this year plan to invest in their personnel by giving their employees a pay raise.
Nearly three-quarters of small business owners were not aware of the increased Section 179 tax deduction, changing from $500,000 to $1 million this year.
75% of small business owners were not aware of the increase in Section 179 first-year bonus depreciation, now at 100%, in 2018.
The number one item that most small business owners want to invest in is business vehicles, either through leasing or outright purchase. After that, the list includes machinery, business computers, office equipment, heavy equipment, printing equipment, office furniture, and off-the-shelf software.
Less than half of small business owners will reduce their spending on business entertainment in 2018.
Small business owners looking to gain a better understanding of the Tax Cuts and Jobs Act will plan to: talk to an accountant or tax specialist (77%); will conduct research online (19%); or talk to their peers and/or business associates (4%).
“The lower corporate tax rate and increased expensing limits and tax credits are presenting many small business owners with a great opportunity to invest in their companies. Balboa Capital is here to support them with our portfolio of quick, hassle-free financing solutions,” continued Ms. Freberg.
For more information about how your business and its IT can benefit from the Tax Cuts and Jobs Act, as well as Section 179, don’t hesitate to get in touch with Centerpoint IT right away at (404) 781-0200 or firstname.lastname@example.org.