• About
  • Contact
  • Testimonials
  • Newsletter
  • More
    • Demographics & Advertising Rates
    • Terms & Conditions
Monday, October 2, 2023
No Result
View All Result
California Business Journal
  • Front Page
  • Business
  • Finance
  • People
  • Featured
  • Opinion
  • Technology
  • Law
  • News
  • Food
  • Art & Culture
  • Human Interest
  • Education
  • Insurance
  • Real Estate
  • Health & Fitness
California Business Journal
What the Latest Tax Reforms Mean for Business Owners

Photo Credits: Pexels.com

Troy Renkemeyer Explores What the Latest Tax Reforms Mean for Business Owners

by Bia Pendelton, California Business Journal
A A
Share on FacebookShare on Twitter

Taxes are the major cost that needs to be accounted for when making financial decisions for CEOs, Founders, and Managing Partners. They must understand the latest tax reforms in the United States to plan properly and budget accordingly.

Troy Renkemeyer, Principal at Renkemeyer Financial Consulting, takes a look at what these changes mean for business owners.

The US tax code has undergone significant reform over the last few years, with the most recently enacted in December 2017. The new law—the Tax Cuts and Jobs Act (TCJA)—made substantial changes to both personal and corporate tax rates and deductions. Here are some of the key points you should know about how this affects business owners.

Corporate Tax Rates

One of the primary changes is a reduction in corporate tax rates from 35% to 21%. This rate applies to both C corporations—the traditional corporate structure used by most businesses—and pass-through entities such as partnerships and limited liability companies (LLCs).

ADVERTISEMENT

Small businesses organized as pass-through entities have a 20% deduction available on up to $315,000 of their taxable income per year. That means their effective tax rate can be even lower than 21%.

Personal Income Taxes

The TCJA also changed personal income taxes, which can significantly impact business owners who pay themselves through salaries or distributions from LLCs or S Corporations. There are new brackets with rates ranging from 10% to 37%, depending on your income level and filing status. Additionally, if you have investments such as stocks or bonds outside retirement accounts, you may qualify for lower capital gains taxes due to adjustments made by the TCJA.

Sales tax, is a type of tax levied on the sale of goods and services, typically imposed by governments at the state or local level. This tax is calculated as a percentage of the purchase price and added to the total amount paid by the consumer. Sales taxes play a crucial role in generating revenue for governments, providing funding for essential public services such as education, healthcare, and transportation infrastructure projects. When it comes to sales tax in different states, each state has its own specific sales tax rate that is imposed on goods and services.

For example in Colorado, the state imposes a sales tax rate of 2.9%.However, it’s important to note that local jurisdictions within Colorado may also impose additional sales taxes, resulting in varying rates across different regions of the state. These local taxes are often utilised to fund local projects, services, and initiatives. Therefore, Colorado sales tax paid by consumers can vary depending on the specific location where the purchase is made.

Tax Deductions

The TCJA also changed many deductions available for individuals and businesses. For example, state and local income taxes were limited to $10,000 per year; unreimbursed employee expenses such as mileage reimbursement have been eliminated; and home office deductions have been reduced significantly, if not outright removed in some cases.

Furthermore, certain itemized deductions like medical expenses will only be allowed under some circumstances if they exceed 7.5% of your adjusted gross income (AGI). All business owners need to be aware of these changes so they don’t pay more taxes than necessary due to missing out on these deductions or credits when filing their returns each year.

Opportunities For Foreign Earnings

The recent law has opened up opportunities for foreign earnings. Companies can utilize a territorial tax system in which only domestic payments are liable to taxation. That allows corporations with significant foreign profits to repatriate their earnings at set rates – 15.5% in cash and equivalents and 8% if the funds are reinvested.

Depreciation Allowances

One of the key areas impacted by the TCJA is depreciation allowances. Businesses now have an excellent opportunity to capitalize on considerable tax savings with the new 100% bonus depreciation on qualified property placed in service after September 27, 2017, and before January 1, 2023.

In addition, if a written binding contract is already in place when acquiring certain types of property, businesses may benefit from extended bonus periods. Further, for property placed into service after the December 31 deadline, a 20% phase-down is expected each year until 2027.

Businesses can deduct more for certain investments than they could before the TCJA. Furthermore, companies now have more flexibility regarding how they choose to depreciate their assets—they can opt for straight-line or accelerated methods depending on their needs.

Financial Planning Strategies

Due to the complexities of tax reform and its impacts on businesses, business owners should consult a financial planner or accountant knowledgeable about these changes before making big decisions regarding taxes or finances.

That said, there are some strategies that financial planners may suggest when helping business owners plan their finances in light of recent tax reforms:

– Purchasing large assets as soon as possible while taking advantage of bonus depreciation rules

– Maximizing retirement contributions so that funds are invested sooner rather than later

– Accelerating deductions while deferring income where possible

– Refinancing debt under lower interest rates

– Taking advantage of other deductions such as Section 179 expensing rules or research credits

Conclusion

The US taxation system constantly evolves based on current events and economic trends. Business owners must stay informed about any updates or changes that may affect their operations–especially those regarding tax reform laws like the TCJA. Passed in December 2017, the bill included significant reductions in corporate tax rates along with other modifications related to personal income taxes and deductions.

Troy Renkemeyer suggests keeping yourself informed about these changes so that you can make informed decisions about how best to manage your finances while still complying with all applicable laws and regulations set forth by federal or state governments. With this knowledge, you should have no problem navigating the ever-changing landscape of taxation in America today.

Related Posts

Inc. 5000
IMOS Consulting on Inc. 5000 list after staggering 265% growth
Key Considerations for Selling a Business
Key Considerations for Selling a Business
Tax Lien Investments as Portfolio Diversification Strategy
Tax Lien Investments as Portfolio Diversification Strategy
Small Business Finances2
Top Tips for Managing Small Business Finances
Understanding the Different Types of Tax Deductions
Using Personal Loans to Finance Your Business
Using Personal Loans to Finance Your Business
What Do I Need to Do to Get a Small Business Loan?
What Do I Need to Do to Get a Small Business Loan?
Tags: accountantAmericaassetsbestbondsbudgetBusinessBusiness ownersbusinessescapitalcapital gainscodeColoradocompaniesconsumerscontractcosteffectiveemployeeessentialeventsexpensesfinancesfinancialfundinghomeimpactincomeinfrastructureinvestmentsknowledgeablelandscapelawlawsliabilitylightlocallocationmakingmedicalnavigatingofficeopportunitiesorganizedpaymentsplannerplannersPlanningplayratesregulationsresearchretirementrevenueSalessavingsservicestocksstrategiessystemtaxtax reformstax savingstaxable incometaxationtaxesUnited StatesUS
ADVERTISEMENT
Bia Pendelton, California Business Journal

Bia Pendelton, California Business Journal

Related Posts

Inc. 5000
IMOS Consulting on Inc. 5000 list after staggering 265% growth
Understanding the Different Types of Tax Deductions
Using Personal Loans to Finance Your Business
Using Personal Loans to Finance Your Business
What Do I Need to Do to Get a Small Business Loan?
What Do I Need to Do to Get a Small Business Loan?
Key Considerations for Selling a Business
Key Considerations for Selling a Business
Tax Lien Investments as Portfolio Diversification Strategy
Tax Lien Investments as Portfolio Diversification Strategy
Small Business Finances2
Top Tips for Managing Small Business Finances

CBJ Newsletter

Contact Rick@CalBizJournal.com

CBJ Rates and Demographics

1REALTOUR-SAN DIEGO-WEB DESIGN
Facebook Twitter LinkedIn LinkedIn Instagram Youtube
C B J   LOGO  SVG-01
  • About
  • Contact California Business Journal
  • Testimonials
  • Demographics & Advertising Rates
  • Terms & Conditions

Categories

  • Art & Culture
  • Business
  • California Hotel Listings
  • Daily Updates
  • Editor's Choice
  • Education
  • Featured
  • Finance
  • Food & Dining
  • Health & Fitness
  • Human Interest
  • Insurance
  • Law
  • Lawyers
  • Marketing
  • Medical
  • News
  • Newsletter
  • Opinion
  • People
  • Popular
  • Real Estate
  • Social Media
  • Technology
  • Uncategorized

CBJ Partner Firebrand Media

Laguna Beach Independent Newspaper
 Laguna Beach City Guide
 Newport Beach Independent Newspaper
Newport Beach Country Club Magazine
  Montage Magazine
 Omni Escapes Hotel Magazine
 Bespoke Concierge New York
 Evans Hotels
 Laguna Beach Magazine
 On The Menu Laguna Beach
 Newport Beach Magazine
Coastal Real Estate Guide (NB,LB, CDM)
Monarch Beach Resort Magazine
 Pacific Coast Magazine (SoCal)
Sea Island Life Magazine
Salamander Hotel & Resorts Magazine
 View our entire portfolio

 

Most Viewed

  • More Truth About Temu: Is Temu A Chinese Company?

    The Truth About Temu: Where Is It From?

    0 shares
    Share 0 Tweet 0
  • How to Get Free Stuff on Temu (The EASIEST Methods Explained)

    0 shares
    Share 0 Tweet 0
  • Lawsuit Basics: How Much Does It Cost to Sue Someone?

    0 shares
    Share 0 Tweet 0
  • Investigation: Can TriumphFX Take Your Money?

    1 shares
    Share 0 Tweet 0
  • What to Do When an Online Casino Refuses to Pay Out Your Winnings

    0 shares
    Share 0 Tweet 0
  • The Impact of Covid: Racing to Buy Second Citizenships

    3 shares
    Share 0 Tweet 0
  • 30 Best Temu Alternative Apps To Buy from Online

    2 shares
    Share 0 Tweet 0
  • NFL Paychecks: How Do NFL Players Get Paid?

    0 shares
    Share 0 Tweet 0
  • Temu’s New Shipping Policy Is A Smashing Hit For Shoppers All Over the Country

    0 shares
    Share 0 Tweet 0
  • Top 5 Flavors On Elf Bar BC5000 Review

    0 shares
    Share 0 Tweet 0

Latest Articles

Google Tests New Platform “Playables”

Maximizing Potential: How Assessment Training Drives Business Excellence

How Small and Large Businesses Develop Employees: 5 Key Differences

From Vision to Reality: Overcoming Challenges as a CEO in Today’s Business Environment

USA’s Betting Frontier: Kentucky Launch News and Status Updates

Stop Researching Products That Don’t Exist Yet

5 Fun Things to Do Outdoors by A Fire Pit

Which Gaming Platforms are the Most Popular?

Bitcoin’s Latest Performance and Future Prospects

6 Ways in Which Students Can Get Help With Their Math Assignments

California Business Journal | California Business News, California News Media, California business articles | Orange County, Los Angeles, San Diego, Inland Empire, Northern California, San Francisco | Huntington Beach CA 92649 | (949) 648-3815
ALL RIGHTS RESERVED BY CALIFORNIA BUSINESS JOURNAL.
Site Design by 1REALTOUR

No Result
View All Result
  • Front Page
  • Business
  • Finance
  • People
  • Featured
  • Opinion
  • Technology
  • Law
  • News
  • Food
  • Art & Culture
  • Human Interest
  • Education
  • Insurance
  • Real Estate
  • Health & Fitness

California Business Journal | California Business News, California News Media, California business articles | Orange County, Los Angeles, San Diego, Inland Empire, Northern California, San Francisco | Huntington Beach CA 92649 | (949) 648-3815
ALL RIGHTS RESERVED BY CALIFORNIA BUSINESS JOURNAL.
Site Design by 1REALTOUR