GOP tax overhaul includes some big changes for business tax filers

If you haven’t met your maker by April 15, Uncle Sam will be expecting his annual tax settlement.

But small business owners throughout Arizona may appreciate some of the changes to the federal tax code, which was ratified by Congress in December 2017.

The federal Tax Cuts and Jobs Act aimed to simplify individual filings, slash the federal corporate tax rate and offer temporary tax deductions for comparatively small proprietors.

By 2027, the federal tax overhaul will also add more than $1.4 trillion to the national deficit, according to the Congressional Budget Office.

While local tax preparers are waiting to see if Arizona will conform to the new federal law, here’s what some professionals had to say about the changes.

Small businesses eligible for 20 percent deduction

Under the new federal tax law, pass-through entities—which include sole proprietorships, partnerships, LLCs and S corporations—will be eligible for a 20 percent tax deduction on qualified income.

Even though owners of pass-through entities may get a significant savings from the new 199A deduction, it’s a more complex and time-consuming calculation, said Marshele Scherrer, marketing manager at R&A CPAs.

Read the entire Inside Tucson Business article here. Originally published Jan. 18, 2019.

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