With the adoption of the H.R.1 tax reform document by the Senate and the parliament, it is now time to announce what business owners can expect in the upcoming years till 2025. Don’t worry though, it certainly isn’t an all win/lose situation for anyone.
The tax law has severe impacts on both sides of the purchasing counter; the suppliers and the consumers. In addition, insurance policies and health benefits have all been revised to the extent that they might not favor most people by the end of this year. The specific impacts of the bill on your small business are highlighted below.
1. Massive Fall in Corporate Tax Rates
You now have an additional 14% in your pocket as the corporate tax rate required by legislation falls to 21% under the Republican administration. Essentially it was thought to be a benefit for the well-established organizations only, but everyone gets a generous slice of the pie.
2. Decrease in Consultancy Credits
Organizations and businesses have always been of different types, and the smallest business which springs up these days are service and tertiary-based. These include consultancy, teaching centers, financial advisory etc.
For such business, the credit tax implied on the income shall exist no more, which means that under the new law product and goods markets can expect to pay more in taxes than service providers.
3. Provision of Medical Insurance
If you own a small business which you are trying to scale to new heights, then you certainly have to provide your employees with the option of health insurance. Under the previous law, however, health insurance was mandatory in the sense that those who did not directly opt for it still had to pay some sort of a portion as an installment for waiving off the insurance.
It was never looked upon favorably by employees who felt that a cut of their income was being made for no reason, but now you as the business owner will not have to do that. In any case, it is not a financial benefit for you, but can be helpful in terms of the boosted spirits of the workers.
4. Standard Tax Raise
Your employees most certainly wait for their paychecks all month long, because the happiness of paydays perhaps holds no equals. This is a bad news for them because you might have to withhold their next checks and make a new batch consisting of those with increased tax cuts.
You heard it right; standard tax on the pay of employees has risen to 28% effective from 2018. This is in light with the federal tax authorities and their aims of achieving state income goals. Perhaps the medical insurance becoming an unnecessary to pay for (which is expected to result in 13 million people dropping out of the Affordable Care Act) is a good exchange in terms of the increased taxes.
So get your businesses ready and your representatives in good spirits to make these important changes in the workplace, which might cause a swift turn around in market competitiveness.
Posted by Randy Blakeslee – GetnSocial