President Donald Trump has made several proposals for reforming the tax code within the United States. Many of the changes that President Trump made appear to be very popular among business owners. Taxes have become a top issue among entrepreneurs, and President Trump's proposal is earning accolades among many company owners as a result of some of the changes that the president is proposing to make life easier for those who operate their own business entities.
If President Trump's proposal comes to fruition, or if any tax reform occurs, it will be important to understand how the changes to the law affect your company. A Virginia business tax lawyer can provide guidance to businesses on changes to tax laws and on how to operate within the current tax rules so they can minimize the amount they must pay while complying with all legal requirements. Contact an attorney today so you can stay up-to-date on proposed tax reform and so you can ensure you're always making smart choices about business tax compliance.
Why Do Many Small Business Owners Support President Trump's Tax Plan?
CNBC explained why President Trump's tax plan is popular among those who own businesses. Many small business owners think that President Trump's plan would provide them with tax relief. President Trump has called for simplifying the current tax code by flattening the current seven brackets to just four different tax brackets. Some deductions would be eliminated under President Trump's plan, but tax rates would be reduced overall so business owners could pay less without worrying about maximizing their deductions.
President Trump has also proposed that pass-through business entities, sole proprietors and other unincorporated small businesses should be taxed at a lower rate. His proposal involves lowering the corporate tax rate to 15 percent and applying this reduced rate to different kinds of business structures even if the owners of those companies have not opted to go through the incorporation process.
Company owners for many types of businesses, including sole proprietorships and other pass through entities, are currently taxed at higher personal income-tax rates, which means that many business owners pay a substantial amount of taxes each year. Business owners also struggle with the complexities of the current tax code. The hope is that President Trump's simplification of the tax code and change to the way in which companies are taxed will make it easier for them to do taxes and will result in them paying less.
A survey of more than 2,030 small business owners over the age of 18 revealed that as many as 42 percent of survey respondents believe that changes in tax policy on the federal level will have a positive impact on their companies. An additional 33 percent of business owners who replied to the survey said that Trump's tax reforms would likely have no effect. This means only 24 percent of business owners think the tax plan would impact them adversely.
It remains to be seen what type of tax reform plan, if any, passes. Tax lawyer Kevin Thorn can advise companies on how proposed changes to the law could affect them and can offer guidance on complying with tax laws while reducing your tax burden.
