April is known for sunny spring days and the occasional rain (bringing all our May flowers!), but it’s also known for something a lot less enjoyable: Tax season. No matter whether you’re facing your first time filing as a small business owner or you’re a total pro, changing tax laws and tax reform are important aspects we should know about. We asked two of our members who are financial professionals to weigh in on the current state of things, and some issues they think are important for their entrepreneurial peers. Here’s what they had to say:
IF YOU COULD REFORM ANYTHING ABOUT TAX LAWS FOR SMALL BUSINESS OWNERS, WHAT WOULD IT BE AND WHY?
“Business meals: Currently, business meals are only 50% deductible. Small business owners need to network and build relationships by meeting potential customers. Many times they meet potential customers at coffee or lunch, and those meals are only 50% deductible. Business owners are trying to get their businesses started or continue strengthening them. They are required to incur these type of expenses, but are strained when they can deduct only 50% of the cost. The $20.00 meal may result in a $2,000.00 contract. It is reasonable these meals be 100% deductible rather than 50% deductible.
Office in the home: Continue to allow the simplified method for office in the home. This method is based on square footage used times the federal allowance per square foot. We have heard this deduction may not continue, but for small business owners, it is an excellent way to deduct home office that is not adjustable by depreciation on sale of the home.”
—Jo-Ann Weiner, EA, CFE, NTPI Fellow, Forensic Tax Accountant, J.L. Weiner and Associates, LLC, NAWBO-South New Jersey
“I would reform a no-tax on business under $500k for the first three years of business. This would help to reduce the overhead expenses that can truly help business owners expand quicker and not be burdened with the tax implications they face.
I would also reform the meal and entertainment deduction policy. Most small business owners consider their greatest ROI during the action of breaking bread. With limited resources, business owners need the ability to write off as many costs as they can, particularly in the area of meals and entertainment.”
—Amy. G Ackerman-Collins, Financial Process Maximizer, Founder, President NAWBO-Santa Barbara
IF YOU WERE TO SAVE MONEY FROM TAX REFORM, WHAT WOULD YOU DO WITH IT TO HELP GROW OR IMPACT YOUR BUSINESS?
“If I had additional funds available from tax savings, I would expand my practice by opening and staffing an office in New York and expanding my New Jersey staff, thus growing my business.” —Jo-Ann
“I would immediately implement additional tech solutions to maximize my revenue potential and hire additional staff to manage client relations.” —Amy