17 Jan Small Business Planning in 2018
The new GOP tax bill brought about sweeping changes to just about every sector of the U.S. economy. As with any major legislative change, small business owners everywhere are wondering how the new law will affect their bottom line. For those just starting out in 2018, it might be a good time to set up a meeting with aSouth Carolina small business attorney. Here are a few quick legal considerations for small business planning in 2018.
Take Advantage Of Bonus Depreciation
Normally, a business owner has to depreciate the value of assets over a long period of time. For real estate, it’s 27.5 years. This applies to property used for business purposes or asrental properties. Bonus depreciation allows a business owner to take a larger immediate deduction for business purposes, in some cases as much as 50 or 100 percent. For more detailed information, check out theIRS rules. In short, however, this option was scheduled to end. Under the new tax law, bonus depreciation will be around at least until 2027. So, if you are starting a new business, you should talk to a tax adviser about the possible benefits of making larger upfront purchases and capturing the tax benefits through bonus depreciation.
Choose The Right Type Of Business Entity
According toTaxFoundation.org, the vast majority of businesses are sole proprietorships, with nearly 23 million of them estimated to be doing business in the U.S. each year. For most small businesses just starting out, this is probably a good plan. Easy accounting, pass-through taxation, and no complicated corporate returns make a sole proprietorship appealing. But if the business has a high risk of liability, you may want to consider incorporating or establishing a limited liability company.
Under the new tax law, many business owners may be able to deduct up to 20 percent of their business income. This could be a huge boost to small sole-member LLC’s and mom and pop shops around the country. But also remember that the new tax law reduces the corporate tax from 35 percent (for income over $10 million) to just 21 percent.
Liability and Taxes are not the only considerations when choosing a business structure. A small business attorney can help you choose the correct business type for your new business.
Commit to Resolve Differences Through Alternative Dispute Resolution
Every year, businesses spend millions litigating disputes that could probably be much better resolved through mediation. In South Carolina,alternative dispute resolution is a process by which partnership conflicts, disputes with vendors, and contract disputes can be resolved in a more private and cost-effective forum. If you use contracts on a regular basis, consider asking your clients and vendors to agree to a dispute resolution method that avoids court and helps resolve disputes quickly and efficiently.
Hiring A Mount Pleasant Business Lawyer
Whether you’re just starting out or you’ve been in business for decades, consider teaming up with an experienced small business attorney who can help guide you through some of your toughest decisions. From moving your business to a C Corporation to resolving contract disputes with vendors, Klok Law Firm LLC can help protect your business.
Contact us to make an appointment today.