Tax season tends to bring out a sense of dread. Whether you’re a business owner gathering a year’s worth of receipts in a file box for your accountant or a family scratching out formulas at the kitchen table, the paperwork and the ever-nagging fear that you’ve forgotten something makes mid-April our least favorite time of year.
It was with taxpayers and small businesses in mind that President Trump signed the Tax Cuts and Jobs Act into law. The final law cuts the corporate tax rate from 35% to 21% for 2018 and lowers the income tax at nearly all levels. Tax cuts for working families allow you to keep more of your hard earned money and provide the means for everyone to achieve the American dream.
These tax cuts apply nearly across the board, but the emphasis is on business and on stimulating economic growth to benefit the country as a whole. Business owners are using the savings from these tax cuts to reinvest in themselves, and their communities. With lower taxes, more of our own money goes to growing and creating jobs, and to creating newer products and services. When we take home more of our salaries, we become customers who spend this “newfound” money on products and services. We all benefit.
Cutting taxes on American businesses allows us to grow our own economy and compete globally against other businesses anywhere in the world. The lower tax rates open the door to new opportunities. Businesses are able to reward their employees with higher wages, bonuses and better benefits. There is reinvestment in existing businesses by hiring new workers and building new facilities.
As you fill out your business’ taxes this year, think ahead to how this tax relief law affects you and how it affects your community. Explore the new tax rules with your family, your accountant if you use one, or speak to one of the thousands of SBA-sponsored SCORE mentors, Small Business Development Center coaches, and Women Business Center representative who can advise you on the next steps for your small business. Take advantage of the extra money in your pocket and reinvest in yourselves and your country.
Christian is the Mid-Atlantic regional administrator for the Small Business Administration.