How does the new tax law help my business?4/15/2019
Undeniably, businesses and business owners were the big winners under the new tax law. For large C corporations, the highest corporate tax rate dropped from 35% down to 21%. All businesses can deduct 100% of the purchase price of equipment or assets and heavy vehicles in the first year. For lighter weight vehicles, businesses can deduct up to $18,000 in year one.
Small business owners were winners as well. Business owners of partnerships, S corporations, LLCs, sole proprietorships, certain farming and rental activities now only have to pay income taxes on 80% of the net business income if household income is less than $315,000 for married filing jointly or $ 157,500 single. There are some limitations that apply when household income exceeds these amounts. Please consult with your tax advisor for how the new tax law applies to your business.