Called “the guru of small business taxes” by the Wall Street Journal, our next guest lends us her insight into successful tax planning, and what small businesses can expect when they go to file their taxes this year. On today’s show, we welcome Barbara Weltman, respected attorney, president and founder of Big Ideas for Small Business, and author of over 15 books about taxes, finances, and legal advice for small businesses.
Barbara’s latest book, J.K. Lasser’s Small Business Taxes 2019: Your Complete Guide to a Better Bottom Line, reflects all of the changes by the Tax Cuts and Jobs Act that went into effect at the start of 2018. These changes will ultimately affect your business’s 2018 return, as well as tax planning, moving forward.
According to Barbara, many small business owners may be in for a pleasant surprise going into tax season. For regular C-corporations, the tax rate has been slashed dramatically to a flat 21 percent. If you are the owner of a pass-through entity that report you share profits on your personal return, there’s a new qualified business income deduction of 20 percent. Of course, there are limitations, but for most small business owners, it will represent a significant tax cut.
One reason why business owners fail to take all of the deductions they are entitled to is poor record-keeping. Without the required records to back up your claim for a deduction, the write-off can’t be accepted.
When small businesses go to choose a tax accountant or firm to file their taxes, Barbara recommends hiring a tax advisor to help fill in the blanks on your return, and provide knowledgeable guidance and expertise for your longterm business plan.
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