Based in Brookfield, Wisconsin, Rhona Vogel guides a financial advisory firm offering wealth management solutions that meet the needs of clients nationwide. Among Rhona Vogel’s areas of focus are tax and retirement strategies, and she has extensive knowledge of the impact of tax law revisions passed by Congress in late 2017.
For small business owners, a major change involves a significant increase in the deduction given to corporate and pass-through entities. Pass-throughs are structured as LLCs, S-corporations, partnerships, or sole proprietorships and represent the vast majority of US businesses. The new tax law offers a 20 percent tax deduction for these enterprises. The only exceptions are accounting firms, legal firms, and other service-based businesses that exceed $157,500 in earnings annually (single filing) or $315,000 per year (joint filing).
C-corporations also receive major tax benefits through the decrease in the corporate tax rate from 35 percent to 21 percent. In addition, the deduction for first-year bonus depreciation has increased from 50 percent to 100 percent. This means that businesses acquiring eligible property and equipment are able to deduct the entire amount of the purchase. This contrasts with the previous rules, through which a portion of the asset costs were written off each year.
