Question

are tax laws are crazy in New York, does it affect small business owners ?

Answer 1

Though change is tax law is somewhat unclear and confusing but it is not crazy. And it will certainly affect small business owners. It has both positive and negative impact on business which are listed as follows:

1. Tax rate reduced to 21% from 35%: though it will benefit most of firms but those which are very small in size and its business is upto $50000 who were paying 15% earlier now have to pay 21%.

2. there are cost associated with restructuring which is going to impact smaller firms more.

3.  In order to get the 20 percent reduction, the company must have wages. There are other limits relating to wages. Additionally, some small businesses like law firms, accounting firms and other professional service companies aren’t entitled to this 20 percent deduction at all or have other limitations on its availability.

4. This tax rate will force smaller business to add more accounts which add more jobs and eventually good for economy.

5. All businesses should be aware that the new law basically eliminated entertainment as a deduction. This will affect the bottom line, but when you look at percentage of meals and entertainment in relation to the total expenses of a business, it’s not going to make a huge impact.

Though the new tax law is confusing and complex but at the same time providing huge opportunites to the businesses.