As 2017 came to an end, one thing was certain: we have tax reform. There were many gives and takes before we had the final bill pass and this left individuals and corporate America scrambling to figure out what the new tax laws mean and what they could do to maximize their tax benefits for 2017 filings.
There were sweeping changes for individuals and businesses alike. Although it may be too late to impact your 2017 filings now, there is plenty of time to focus on how these tax changes for 2018 tax filings could spur business growth and ease the tax burden on small businesses.
As a small business or sole proprietorship, the overall tax benefits are mixed depending on your field.
One major change is the tax rate reduction. Corporations will receive a 21% tax rate, and pass-through entities such as sole proprietorships, partnerships, and S corporations, will be able to claim a 20% deduction of their business income, with various limitations. With a historically high corporate tax rate of 35%, and some small businesses with an effective 39% tax rate, the reductions in 2018 are a boon to US businesses. The 2018 tax reform is designed to have companies reinvest these savings into the business and its employees – and therefore the overall economy via increased employee compensation, business investments and strengthening the bottom line.
As your SMB looks at how to make best use of the tax benefit, the potential savings may be enough to have you explore new growth opportunities. Many small businesses are hesitant to expand or reinvest in their business until they are more profitable. This might be the catalyst to execute on those dreams of growth by approaching a lender that can help you capitalize on your business plans.
For 2018, the Section 179 deduction that small businesses can use to receive an immediate break on purchases of qualifying equipment raises to $1 million. This deduction is applicable for business items ranging from computers to vehicles to manufacturing equipment and technology. Another substantial change for 2018 is that used equipment will now qualify for bonus depreciation for the first time.
View this quick 2-minute video for more on how 2018 Section 179 Tax incentives can help your SMB:
With SMBs able to take advantage of a much larger Section 179 deduction and apply used equipment depreciation, they are able to think differently about economic growth and their business initiatives. Utilizing equipment financing or leasing when making Section 179 eligible purchases allows SMBs to make business improvements while avoiding high up-front costs and make affordable monthly payments on their new or used assets.
Want more information about pairing Section 179 with flexible financing? Get our free Section 179 flyer highlighting 2018 tax incentives: click here to request your copy.
Ascentium Capital can get help you capitalize on your business plans with fast and flexible financing options. Ascentium Capital provides over 25 years of expertise and is the nation’s largest private-independent finance company in the U.S.
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