by Ray Hayes
Since the tax reform was passed in late 2017, many companies like Walmart, and Home Depot have awarded bonuses to their employees. With the corporate tax rate dropping from 35% to 21%, there has been a surge in confidence for businesses both big and small. However, despite this upsurge in corporate spending and confidence, small business owners are not quite clear how much their tax rates will drop.
According to Newsweek, the new tax law provides small businesses with a 20 percent deduction for business income, however the, “… size of the deduction declines when an individual owner’s taxable income reaches $157,000.” The IRS has yet to issue regulations on how these businesses can calculate their income and until small business owners see how the rules changes, wages can not be raised. CEO of Operations Inc David Lewis spoke about the uncertainty. “The idea of giving more money to employees purely on speculation that you’re going to see more in your pocket, that’s counterintuitive.”