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Doubtless, you’ve heard 20 different versions of the new tax law, and your head is spinning over how to separate truth from fiction.
Our CPA firm provides tax guidance to businesses in transportation and manufacturing and we have already been working overtime to sort out the details, as well as the winners and losers. And, rather than bore you to tears with endless numbers and mind-numbing details, we want to give you our take on the major details. So without further ado…
- Regular (C) corporations – Why? The corporate tax rate will drop from 35 percent to 21 percent! Many observers are already predicting this will serve as a significant incentive for business growth via new hiring, increased salaries, and investment in heavy equipment.
- Shareholders of Subchapter-S Corporations – Why? Under the new tax law, owners of Sub-S Corporations can receive the first $20,000 of flow-through net income Tax-Free! (at the new 24 percent rate, that’s an instant tax savings of $4,800.00!)
- Single-owner LLCS – Why? This entity can be inexpensively converted to either of the above entities in order to take advantage of substantial tax savings.
Over the road truck drivers paid on W-2’s (aka company drivers) – Why? Under the new law, company drivers will no longer be able to deduct trucking expenses – including per diem allowance – as itemized deductions. What sounds like a disaster for company drivers may be mitigated in many cases by another change, which is the near-doubling of the standard deductions amount.
The standard deduction for single individuals will increase from $6,350 to $12,000, and the standard deduction for married taxpayers filing jointly will increase from $12,700 to $24,000. (To determine if this would be the tax disaster that it sounds like, we actually took two tax returns for company drivers at random, and re-worked them under the new tax law. We actually found that on one return, the tax bill went DOWN by $1,000 and on the other it went UP by about $600.
Again, for those of you that are professional drivers, this elimination of deducting work/trucking expenses applies ONLY to company drivers, not to owner-operators or other drivers paid on a 1099.
Use the New Tax Law to Your Advantage
In this letter, we have hit you with some of the most relevant high points of the new law, especially for business owners. Part of what we love in working with our friends and clients, is not just giving you information, but rather how to use it to your advantage. How to use the tax law to keep more of your hard-earned money, and grow your business…or realize your hopes and dreams for your family.
If you’d like to receive our continuing updates on how to use the new tax law to your advantage click here. As a thank you for allowing us to give you these totally FREE updates, we will gladly give you a 20 percent discount off of any service that you allow us to provide for you.
At eTruckerTax, we strongly appreciate your sacrifice, and the role you play in keeping our economy growing. Helping you to legally cut your taxes is our way of tangibly expressing our gratitude to you. If you have a current need, please call eTruckerTax at 770-984-8008 to give you and your situation the attention that you deserve.