How To Save On Your Tax Bill
Do you own a small business If you do, are you exasperated of paying what you believe are unreasonable taxes
? Well, you might have some relief in sight if you can understand or seek to find out more about tax relief for small businesses. The government has reduced by a few percentage points the payable taxes on several tax brackets, so that the final tax payable by you, if you are eligible, is reduced by so much.
Small businesses are deemed a very important sector in the economy, as they play a vital role of goods distribution, providing jobs and services, thus generally fueling trade. By reducing even just the payable tax, the state and federal governments are encouraging the small business entrepreneurs to stay with their businesses as well as urge new entrepreneurs to open their own enterprises. Reduced taxes on income, property, capital gains and dividends for sole proprietorship's and limited partnerships also tremendously lessen the burdens of these businesses.
Several tax measures that have been implemented to lower the tax burden of small entrepreneurs include the shaving off 2% or more from the 27, 30 and 35 percent tax brackets. This means 35% is now the highest tax that may be imposed on a small business, lower than the previous 38.5%. In addition, many items have been moved from the higher to the lower tax brackets of 10% and 15%, so that fewer items are taxable in the upper brackets. The death tax has also been eliminated until Year 2011: that infamous tax levied on the enterprise when the owner dies and ownership transfers to his heir.
By slicing some percentage off the tax on dividends and capital gains, the effect of double taxation on the entrepreneurial and individual levels have been eased also. Double taxation occurs when the business income is taxed, and again through the individual income tax when the same income is distributed to the owners or investors. Even if the owners or investors charge their take-out incomes from the business as personnel services expenses, the incomes are still taxable. This aberration hits the small mom-and-pop versions mostly.
The essential role small business plays is to facilitate the transfer of goods from the large manufacturers to the consumer. That role may form several layers from wholesale distributors to retail sales depending on the particular product being distributed, but that bridge is so vital to the economy that without it almost nobody can buy anything in retail. In fact, distributors often net more profits than the manufacturer investments wise that it can be lucrative when in scale. The Chinese have discovered this long ago when they concentrated by and large on the distribution aspect of business and economics, becoming very good at it through the years.
So, is your business eligible for reduced tax? It will mean much to you in the form of larger net profits and less expenses, of even bigger take-home pay from the business. Why don't you try to find out?
by: Hunter Crowell
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