Whether you’re already running your own business or just thinking about starting one, this is good news for you! How do these tax changes help you? Read on!
The new bill is doing away with the marginal tax rate system for corporations. Before this bill, you paid taxes depending on the tax bracket you fell into. So, if you made more money, you paid more taxes—and vice versa. Now, corporate taxes will include a flat 21% tax on all profits. So, it’s good-bye tax brackets and hello flat rates! The bill is also taking the U.S. corporate tax system from worldwide to territorial. That just means corporations will no longer pay U.S. taxes on profits earned outside the country.
You may be working a side gig and wondering when you should make your business official. Or, you might have an LLC but question if you could save money by switching to another business structure. You have plenty of options for how to structure your business, but there’s a lot of tax information to take into consideration."