Small Business Tax Facts (That You Might Not Know!)

We've said it once and we will say it again, tax law is constantly changing. With the dawning of the Tax Cuts and Job Act, we will continue to see changes to all levels of taxes. Taxes for small businesses are no exception to these changes. So in honor of tax season officially arriving, here are some tax facts that you might not know about for your small business! 

It's a new year, which of course means new changes in tax law. Tax season is finally here, so if you are looking for the best tax professionals to help you file and get ready for April 15th, we are the best company in the Summerville area. As you are starting to prepare your taxes for your small business, you might need to hit the books again or chat with one of our tax professionals to help you plan for these new changes and laws that you might not know about. To get you started on the right foot for 2020, here is a handful of some of the most important things you will need to think about and know when it's time to start filing for April 15th!  

• If you are starting a small business or are new in your small business venture, be aware that taxes will most likely be one of the biggest costs for your company every year. They will be more expensive than rent on your building, your marketing campaigns, any business travel and expense, and so on. The only thing that might be more expensive than taxes is your company payroll, but all that depends on the size of your small business and how many people you employ. 
• Don't forget that you will be paying different kinds of taxes beyond that of just federal tax. Along with tax-related costs, you will have to pay for social security, property tax, and sales tax. The time and effort you put into keeping track of all of this, keeping your write-offs organized, and the person you pay to manage everything will also be taking a bite out of your budget too. 
• For a lot of small business owners, and you might be included in this pool, taxes are a huge worry and concern. A lot of time is spent thinking about if can you pay them? What will you be paying taxes on? Why do I have to pay taxes like this and why am I not receiving certain write-offs? How is the best way to pay them? Should I have someone else take care of my taxes for me? Am I doing it all correctly? It's a lot to think about, and you're not alone if you are worried about them. That's where our company can step in. We will answer all of these questions, ease your stress, and give you your time back to focus on your business and what you do best. 
• Good news! Personal taxes and tax brackets have been seeing some major changes for 2020. Small business owners are also going to be included in this pool of changes. So, at the end of the day, your taxes might be getting smaller. The Tax Cuts and Job Act officially reduced tax rates for small businesses. On top of reduced tax rates for individuals, C corporations will see a 21% tax rate in the future. Partnerships, S Corporations, and other similar companies who are eligible will see a 20% income deduction! 
• These new deductions will be very helpful in the coming months because the rate for tax preparers will be and has been going up in the last few years. Their rates have been going up over the last few years because of the sheer amount of changes to tax law. With so many changes since the Tax Cuts and Jobs act and what the federal tax changes have brought to individuals and small businesses alike, CPA's will be doing much more work than ever before. They will need to be paid more for the time and education it will take to understand, command, and stay on top of all of these changes. 

At the end of the day, some of these changes and facts might not be huge. But they will be big enough to affect your bank account, peace of mind, and how you plan on filing your taxes. It's good to know and understand that since 2018, congress has passed major adjustments to business tax laws that included a lower operation tax rate, new rules for pass-through businesses, and a tax break for some industries. It is also important to know that these changes made in 2018 are still settling and taking effect. They will be significantly affecting small businesses that work with overseas productions or individuals overseas. International taxes and regulations are a whole other beast of their own. Stay up to date on them, or work with someone who can help you change with the times. 

We are here to make your tax preparations accurate, efficient, and stress free. If any of this information made you feel stressed, call us right away. We are officially ready for tax season and are happy to help you. Until then, make sure you and your small businesses are ready for the changes ahead and at hand. Until next time stay organized, educated, and ready for tax season! 

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