If you don’t believe small businesses are benefiting from tax reform, ask the accountant!

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Tax reform is still working and small businesses are really enjoying the benefits! Don’t believe us? Ask accountant Kalena Bruce! Bruce breaks down the benefits that small businesses gain from tax reform and what it all means for those who don’t quite understand the technicalities.

The Daily Signal has the commentary:

The new tax structure lowers tax rates and expands the income thresholds for anyone who pays individual income tax, including small businesses that are structured as pass-throughs. These include sole proprietorships, partnerships, LLCs, and S-Corps.

Under the new tax structure, rates fall to 10, 12, 22, 24, 32, 35, and 37 percent from 10, 15, 25, 28, 33, 35, and 40 percent. Income thresholds under these new rates are also expanded. For instance, the 15 percent tax bracket, which used to kick in at just $18,650 ($9,326 for single filers), has been eliminated in favor of a new 12 percent bracket that extends all the way to $77,400/$38,700.

The income threshold for the zero-tax bracket, also known as the standard deduction, has also been doubled to $24,000/$12,000.

The tax legislation also introduced a new 20 percent tax deduction for small business pass-throughs, allowing these to shield one-fifth of their earnings from taxation. However, this provision is complex, with rules based on business type, size, and income. Tax accountants have requested guidance on this provision from the IRS.

All small business pass-throughs, no matter the type, that earn less than $315,000 ($157,500 for single filers), are now allowed to write off 20 percent of their earnings. According to IRS data, roughly 95 percent of small businesses earn less than $315,000, meaning the tax relief is directed at the small businesses that need it most.

Above this income threshold, the deduction phases out based on business type and size. For professional services businesses—any business whose model relies on reputation or knowledge—the deduction begins to phase out at $315,000/$157,500 of earnings. That means law, consulting, PR, accounting, financial advisory, health care, and other “white collar” businesses can only get the full 20 percent deduction if they earn less than this income threshold.

Americans had spent years recovering from a recession caused by former administrations making bad policies and bad decisions. Critics will denounce President Trump’s tax reform but it shows that they are overlooking the facts that it’s boosting job growth and providing relief for small businesses. Tax reform is working — and that’s a fact!