Could tax reform help small business owners

Could tax reform help small business owners

BIRMINGHAM, AL (WBRC) - Bud Cason has owned Bud's Best Cookies for 25 years and here lately he said things have been tough for small business owners.

He's hoping the new tax reform will bring them some relief.

"If we do have savings then it will offset some of our increased cost we've had recently. For example, we paid 100 percent all of our employees' insurance for Blue Cross that went up $175,000 in one year," said Cason.

Financial experts like Michael Wagner with The Welch Group said this provision to the tax reform will help S-Corporations like Bud's Best, LLC's, and sole Proprietorships, also known as pass-through entities.

This provision allows owners of certain pass-through's a 20 percent deduction on taxable income.

"These passed through entities depending on how much income they make they will actually get a lower tax rate, so they will actually be able to have more money to expand their business is to hire more workers and give current workers they have pay raises I think you'll be an increase or boom for our small businesses."

For example, if your annual business income is $100,000, the IRS would only tax you on $80,000 of it. The goal is to provide small businesses with relief so they can re-invest back into their company.

Cason said if it works out as it should, it could help.

"Maybe we can set up with a loan from the bank and increase our manufacturing facility and hiring more people than we have right now."

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