Small Businesses To See Smaller Share Of Tax Cuts

The U.S. Senate might vote on tax reform later this week, but the U.S. House of Representative’s tax plan that recently passed might not mean as much for small businesses as compared to larger corporations. Yet, the House plan has the support of trade organization American Trucking Associations, which recently praised approval of the plan.

The tax reform plan is expected to reduce the corporate tax rate to 20%, from 35%; however, most small businesses don’t pay the corporate tax rate, said Travis Crabtree, president of Swyft Filings and attorney for Gray Reed & McGraw in Houston. Swyft Filings helps people to establish businesses, including 259 filings in Arkansas.

The benefit to small businesses regards pass-through income, which refers to being taxed at the individual level instead of at both the corporate and individual levels, and 75% of small businesses pay taxes with the pass-through income method, according to Crabtree.    MORE

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