This is a guest post by Ariel Black of PayWow. PayWow is an authorized payroll solution designed with the needs of small businesses in mind.
Most likely when you chose your business structure or entity type, it was a snap. Your accountant or lawyer helped you to consider a few facts and then you came to one of the most popular entity types: an S corporation (S Corp) or a limited liability company (LLC.)
But following President Donald Trump’s Tax Reform Bill you need to rethink your business structure.
You Might Need to Restructure Your Business
The Tax Cuts and Jobs Act (TCJA) has suddenly made the choice of business structure challenging for both new and established businesses. In the past C Corporation’s were hardly ever considered, but now companies can not afford to ignore the new 21 percent corporate tax rate.
What Business Structure Will Benefit the Most
The Tax Cuts and Jobs Act (TCJA) has successfully impacted almost every business type, but rather than going through each form here we will simply focus on the two main groups.
Pass Throughs are partnership business structures, S corps, and LLCs. The Tax Cuts and Jobs Act (TCJA) introduces a new 20 percent deduction on qualified business income. However, his deduction is temporary and will expire in 2025 if another law is not passed to extend its time.
The rate for C Corps took a major plug from a whopping 35 percent to 21 percent. And unlike the 20 percent deduction for pass-through structures, this change is permanent. This means the top rate will stay at 21 percent until Congress changes it. This is a huge shift and it is sending many business owners running to their accountant’s office.
Payroll Made Simple, Sorry We Can Help With The Rest
PayWow understands the complexity of processing payroll and trying to manage the day to day business. This is failing to mention the ever-changing political and tax policy scene. Which is why they strive to simplify your payroll needs with our innovative payroll software solution. Utilize their informative payroll blogs to read the latest small business news and information.
Ariel Black is a Content Marketing Manager for SPAN Enterprises, parent company to PayWow. PayWow is an affordable full-service payroll and compliance solution designed for small businesses.
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