Corporate tax rate down 14%
Donald Trump is approaching his 2-year anniversary as our nation’s 45th president. Love him or hate him, he has promoted and signed a tax law with several benefits. I am talking about
the corporate tax rate here, with information from https://smartasset.com/taxes/heres-how-the-trump-tax-plan-could-affect-you.
Corporate taxes fell from 35% to 21% for tax year 2018. If your business showed a profit of $100,000 this year, you will be subject to $21,000 in federal taxes. Without this legislation, you would
have had a $35,000 federal tax bill. Ouch! The individual tax rates have been reduced and the alternative minimum tax has been eliminated for most of the taxpayers.
What to do with the savings
Since we’re talking about your corporate taxes, the savings should remain within your corporation. Here are a few ways to put that tax savings to good use.
- Computers. Your office computers have an expected lifespan of 5 years. Look around your office and identify the ones that seem most troublesome. You know…the ones that need the most maintenance
and seem the least stable. Allocate $1,100 to replace each and another $300 for a computer guy to transfer apps and data and get the new machine up and running. Budget $1,400 for hardware, software
- Vehicles. Look at your fleet of both cars and trucks. Which ones seem most troublesome and generate calls from your employees that start with “Hey boss, the truck broke down again. Can you pick
me up at …” Funny? I have a client who tried using a 17-year-old Chevy Suburban as a work vehicle. His newest (lowest on the totem pole) employees had to drive the old Chevy Suburban to job sites.
That is, of course, until the vehicle broke down and the estimated repair costs were too high for the CEO to justify. The bonus depreciation has been added at a substantial savings to you for old
- Office furniture. Comfortable desk arrangements help people feel more comfortable and work more efficiently. The opposite is also true. While sitting at your desk, your joints should be at a
90-degree unnecessary strain and compromising efficiency. Get fully adjustable chairs that grant you, or whomever sits in them, the ability to meet this 90-degree rule. You’ll have to spend serious
money…I’m not talking about cheap plastic folding chairs here.
Tax savings to your benefit
Yes. I just told you how to spend your tax savings. You can use the tax savings to provide your staff with better computers, vehicles and office furniture. To enjoy this tax savings and find more
tax savings you probably did not know about, call Dave Fechter, CPA at (916) 984-2081 today.