Surprising Unknowns for Small Businesses

You know a lot about the taxes for your company, but there still might be some unknown surprises along the way. 

There are black and white things you know about taxes, preparing them, and paying them. But as a new or experienced small business owner, there might be some things you didn't know about your taxes. As we enter the fourth fiscal quarter of this year, keep these possible unknown facts in the back of your mind. This might prepare you for possible painful surprises or surprise you with some relief. 

• The Future Looks a Little Murky 
  • A lot of tax rules expired at the end of 2017 and weren't extend into 2018. Thanks to this fact a lot of technical corrections to the Tax Cuts and Job Acts are waiting to be put into place, or not. Congress is also still working on tax challenges and decisions that could affect and impact your 2019 taxes. If you don't have someone who prepares your taxes for you and you don't have an adviser, now might be the time to change that. Staying on top of tax laws can be a full-time job. It might be time to seriously consider Pathways to help with your taxes this tax season with so many unknowns ahead of us! 

• Put The Money Into It 
  • Thanks again to the Tax Cuts and Jobs Act, the number of small businesses that use tax preparers is over 88%. But, also because of this act it is now going to be costing more to hire a CPA and paid preparers. This is because more time will be needed to prepare and complete new forms. You will be using their services for much longer periods than you have before due to this new paperwork and their needs. You could be using their services for weeks or months longer than normal, or be using them throughout the entire year, all depending on your tax needs. Even if it does cost you more, invest in it. It is less likely that mistakes will be made on these new tax papers and forms with a professionals knowledge, you could receive better tax breaks and returns thanks to their skills, you'll be saved from a headache, and you'll be saving time. With all of these new changes, it takes more time to complete all of your taxes. Instead of using your time to do this, and possibly decrease production and productivity in your company, invest in the professionals. 

• Did you know that there are about 28 million small businesses in the USA? Of all of those, about 22 million of them are made up of only one employee!

• Make More? Owe More. 
  • Small businesses could be facing a rise in the percentage that they will be paying come tax season. Yikes. Thanks again to this new foggy future of tax law. Individuals making between $200,000 to $425,000 yearly are likely to see a rise in taxes between 35 and 37 percent. This could harm and impact small businesses, their owners, and their employees. Be prepared for this possible rise in taxes in your budget and expectation of what you could be spending. If it turns out that this rise isn't happening or if it doesn't affect you, you can use that money somewhere else. But wouldn't you rather have those funds on hand just in case than not?   

• Counting on Location 
  • A lot of small businesses are operated out of the owner's home. This is sometimes the business's largest asset and allows the business to borrow capital for the company, sometimes in very significant amounts. It is projected that real estate prices are going to fall between 5 and 10 perfect in the coming year, lowering the worth of the small business owner's home/office. This could hurt the opportunity to borrow capital against the owner's home if being able to borrow any capital at all. 

So, what did you think? Were any of these a shock or a surprise? With an unknown future and a lot of changes that are a possibility, is your small business prepared? Do you have someone helping you with your taxes, or have you been using Quickbooks to help you prepare for whatever might come your way? With the knowledge of these facts, always know that Pathways is here for you with any question you might have. We are here to help you come tax season and in any season.