2018 is one of the largest tax reforms in American history. Majority of filers, going forward, will pay a lower marginal tax rate on their highest dollars of income. The only people who won’t benefit from these new brackets are low earners, whose tax rate will continue to hold steady at 10%.
The IRS allows you to deduct $5,000 in business startup costs and $5,000 in organizational costs, but only if your total startup costs are $50,000 or less.
The standard deduction is jumping from $6,350 to $12,000 for single tax filers and from $12,700 to $24,000 for joint filers. In either scenario, that’s more than enough to make up for the loss of the personal exemption.
Pass Through Entity
The 20% deduction is the star of the show for small business. If you own a pass-through entity such as S Corp, LLC, LLP or Sole Proprietor you can deduct 20% of your gross income straight off the top.
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