The biggest question I have received from my small business clients this year is, "How do the new tax law changes affect me?". Trust me; tax professionals are working around the clock to be prepared to answer this question. And bookkeepers such as myself are researching every government site available so that we can ensure your financial statements reflect these new requirements.
One of the best articles I have found to explain the changes is this one from Forbes. An excerpt states :
"Corporate tax rates, like individual tax rates, are progressive. For 2017, corporate rates range from 15% to 39% (except for personal service corporations which are taxed at 35%) while individual tax rates range from 10% to 39.6%. While the brackets vary, the rates for individuals and corporations are pretty closely aligned.
The new tax law now provides for a flat 21% tax rate for corporations (the new tax rates for individuals are here). You can imagine how that could have been problematic without more changes: If companies were taxed at a lower rate than individuals, the pass-through scheme doesn't work. But creating a new tax rate for the entities would take away the pass-through nature of the entity. Congress' solution? Business income that passes through to an individual from a pass-through entity and income attributable to a sole proprietorship will be taxed at individual tax rates less a deduction of up to 20% to bring the rate lower."
Confusing? Yes. I will be posting articles throughout the year to help explain what we need to know. For now? I recommend that you read the entire Forbes article by clicking here. I will be working closely with our CPA partners to ensure AccuApproach, LLC provides the most up-to-date, accurate, and professional bookkeeping services to each of our clients. We look forward to working with you.
My best,
Diane Padoven
Founder & President
accuAPPROACH, LLC