Bookkeeping services for tax changes in Santa Rosa - Bookkeeping services will be more important than ever before in 2015, because lawmakers are considering major changes to the tax code.
Small business owners need to pay close attention to changes in the federal tax code. There are a number of possible tax changes on the horizon, so many businesses may need to utilize professional bookkeeping services or hire a tax organizer.
There are a number of major changes in Washington that will likely impact the tax code in the coming year. The Republican Party recently took control of the Senate and increased its control in the House of Representatives, which could also impact the tax code in the coming months. President Obama has also proposed making some changes, such as closing some of loopholes for large businesses.
Here are some possible changes that small business may need to prepare for. Consider using a bookkeeping services company if you need assistance.
The Affordable Care Act
The Affordable Care Act is one of the biggest changes that small businesses must prepare for. Any business with over 100 employees will legally be required to pay a tax if it doesn’t pay for employees’ healthcare.
Businesses with between 50 and 100 employees will need to pay this tax in 2016, but the IRS will begin tracking their activity this year. Any business that will eventually be obligated to pay this fine will need to speak with a CPA or bookkeeper to prepare for these changes.
Closing Tax Loopholes
Since his election in 2008, President Obama has pledged to close a variety of corporate tax loopholes. He has procrastinated introducing these changes, but has become more aggressive about pushing for them over the last year. Last March, he proposed cutting the carried interest loophole that allows hedge funds and private equity firms to receive a lower tax bracket.
Obama has proposed a variety of other changes to close tax loopholes as well, such as barring companies from renouncing their citizenship and relocating to jurisdictions with lower taxes. Large corporations such as Walgreens and Burger King have exploited this loophole, but smaller companies have considered it as well.
If many loopholes are closed, businesses will need to be prepared to pay higher taxes or be more diligent about pursuing existing exemptions. These businesses should consider speaking with their CPA and bookkeeping services company to make these preparations.
New Macroscoring System Will Impact Taxes
The Republican Party has proposed taxing a new macroscoring approach to introducing new taxes. Under the new system, it would be difficult to introduce new taxes that would cause revenue or spending to change by 0.25% the size of the economy.
People on both sides of the argument have raised good arguments about the impact of new economic scoring system, but it will clearly impact businesses in some way. It could lead to a growing number of small taxes to offset lost revenue or lead to lower effective tax rates at the expense of the deficit.
Lower Corporate Tax Rates
The upcoming tax reforms may include lower effective tax rates for corporations. These changes won’t apply to Limited Liability Companies (LLC). It is already possible for owners of corporations to pay lower effective taxes than those that operate LLCs, even after factoring for double taxation.
Some LLCs may consider restricting to C corporations if the corporate tax rate is reduced. You should use a local bookkeeping services firm to see if it is worth making the shift. The Small Business Administration offers some insights on changing entities.
From our experience, it seems clear that small businesses will need bookkeeping services for tax changes in 2015. The new changes can be very confusing, so you may need to work with a professional to prepare for them. Please don’t hesitate to contact us if you need our bookkeeping services to prepare for these changes. We look forward to working with you!
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