Changes to the Taxation of Business Entities

Index - https://steemit.com/tax/@alhofmeister/tax-blog-index

The 2 biggest changes to businesses with the new tax law are the lowering of the corporate tax rate as well as a 20% deduction applied to pass through income.

Corporate Tax Rate
Before

After
It changes to a flat rate of 21%. Corporations that made over $50,000 are getting a tax break (larger if you make more money) while corporations that made under $50,000 are seeing a tax increase of 6%.

20% Deduction
This deduction will be extended to any owners of a pass through entity. The deduction is prohibited to anyone in a service business unless their taxable income is less that $157,500 ($315,000 married). Additionally, there is also an income limitation that applies to owners of a pass through business who also draw a salary from the business. The limitation is intended to prevent taxpayers from reclassifying their wages as business profits.

Disclaimer
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.