With just a few months left in tax year 2018, the Internal Revenue Service today urges small business owners to learn about how the new tax law changes may affect them.
The Tax Cuts and Jobs Act, passed in December 2017, made tax law changes that will affect virtually every business and individual in 2018 and the years ahead. Among other things, the new law may change their tax rates and impact the quarterly estimated tax payments they are required to make during the year.
For many passthrough businesses, the law changes created a new 20-percent qualified business income deduction. Other deductions and credits have been changed as well, including revised depreciation methods and expanded options for expensing business property. There are also new rules for like-kind exchanges and fringe benefits. In addition, small business employers who provide paid family and medical leave to their employees during tax years 2018 and 2019 may qualify for a new business credit. Business owners can refer to the Tax Reform Provisions that Affect Businesses page for updates and resources on these topics and other business-related changes.
The IRS is highlighting these changes and more as part of its on-going initiative to help small businesses and self-employed individuals understand and meet their tax responsibilities. Pass-through businesses, small C-Corporations, Schedule C filers (independent contractors and gig economy workers) and farmers are all affected by the new law.
The IRS has issued a number of news releases, tax tips, YouTube videos and webinars to help small businesses navigate the new tax law, and more of these products are on the way. Tax tips are written in plain language and people can subscribe to them by using the IRS’s Tax Tips email-subscription program. A variety of additional products and resources can be found on the Tax Reform Resources page.
Business owners are encouraged to check the Tax Reform page for the latest guidance on the tax law provisions that may affect them. Partner groups are also encouraged to share this important information with their members.