The small business community, like most Americans are reasonably apprehensive about the impact of the new tax law on their returns this year.
The elected officials in Washington, D.C., told American taxpayers that they will pay lower taxes, retain more of their money and enjoy the economic benefits of the comprehensive tax reform law signed in the latter part of late 2017,for generations to come.
Yet, many taxpayers are still not sure how to make the new system work for them. The uncertainty makes it difficult for them to invest in new business opportunities or hire more employees.
The federal government shutdown added to the confusion because tax payers were not able to get answers to their tax questions from the Internal Revenue Service (IRS).
Some of the key changes and reminders regarding the new tax code include the following: a lower individual rate; doubling of the standard deduction ($12,000 for single filers and $24,000 for married couples); reduction of moving expenses and capping at $10,000 the state and local tax deductions.
The new tax law sets the standard mileage rate of automobiles for business use at 54.5 cents per mile.
The limits for IRAs, SEPs, 401(k) and other retirement plan contributions could have changed for some tax payers. The new tax law should save time and money for small business owners that could use it to grow and expand the business.