President Obama Simplifies Taxes for Small Businesses
After six years of business owners not knowing whether or not President Obama was trying to make their lives easier or more difficult, the Obama Administration proposed a budget that will allow businesses to write off $1 million in investment-spending annually. This will affect businesses with gross receipts of less than $25 million annually, which means more than 99% of all businesses.
Today’s tax compliance rules are so complicated and convoluted that at least 75% of compliance hours for small businesses are spent dealing with taxes. About 60% of the costs of tax compliance are caused by the complexity of the rules on measuring income.
The Obama Administration’s plan is to dispense with most of these rules and allow businesses to use cash accounting, instead of the more complicated accrual accounting, which will significantly simplify how small businesses file their taxes. This simplified method, when combined with the $1 million investment-spending write off, will enable businesses to pay their taxes “on an amount much closer to their bank statement.”
Also in the works… “To eliminate capital gains taxation on investments in small business stock, increase the tax deduction for start-up expenses, and expand and simplify the Affordable Care Act Small Business Credit.”
At IRSALLSTAR, we’re always on the business owner’s side. See how we help businesses take care of their taxes and much more, at http://www.irsallstar.com/about-us.