The debt ceiling crisis was averted in the nick of time, but another deadline will be approaching in November. Part of the deal to resolve the current crisis was the development of a bipartisan joint committee of Congress that has the assignment of creating legislation that will reduce future debt by 1.5 trillion dollars by Thanksgiving Day.
One of the issues that it is assumed will be looked at closely is corporate taxes. It would be easy for many small business owners to look at that statement and say, ‘That doesn’t apply to me, because I’m not a corporation’. However, that isn’t necessarily true. In reality, changes related to corporation taxes can affect non-corporate entities as well. This is why:
All businesses follow similar rules about what is considered a business expense, whether they are structured as a corporation, LLC, partnership or sole proprietorship. If changes are made in that list of deductible business expenses, it could possibly affect all types businesses, not just corporations. In an August 5th Fiscal Times article, Karen Hube brought out some concerns about how changes in business tax codes could affect small business.
One concern was the fact that corporations could push for changes in deductible expenses and credits in exchange for a lower tax rate. Small businesses would be affected in a lopsided fashion if this were to happen, since they wouldn’t get the tax benefit to go along with the changes.
Small business lobbyist would obviously fight such a proposal. But any changes in the business tax laws can affect small business owners. Just keeping up on what the changes are can be a difficult enough task as it is. Those business owners who have been able to file their own taxes may find themselves hiring a tax professional to sort through these last minute changes; another cost they don’t need at year end.
So, what should a small business owner do? Pay attention to what’s happening in Congress. Support the professional organizations that have lobbyists working on your behalf. And, last but not least, don’t hesitate to voice your opinion to your congressmen. Letters, phone calls and emails from individual businessmen carry a lot of weight.