Most
small businesses are
classified as S corporations, LLCs or Sole Proprietors are required to file a
federal corporate income tax return with the IRS every
year. Unlike C Corporations that have to file
Quarterly, S Corporations, LLCs & Sole Proprietors are only
required to file annually.
Another
difference is that S Corporations, LLCs & Sole Proprietors file
their taxes at the personal income tax rates rather than at
the corporate tax rate. The personal income tax rate is lower
than the corporate tax rate. This is a big advantage for small
businesses.
Pass Through entities (S corporation, Partnerships,
or Sole Proprietor): The 2017 Tax Cut and
Jobs Act establishes a 23 percent deduction of qualified business
income from certain pass-through businesses. Certain service
industries are excluded.Expires 1 January 2026.
Personal tax brackets will range from 10% to 37.5%.
Single Not Married
Tax Rate
Tax
10%
10% if less than $9,525
12%
$952.50 + 12% of excess over $9,525
22%
$4,453.50 + 22% of excess over $38,700
24%
$14,089.50 + 24% of excess over $82,500
32%
$32,089.50 + 32% of excess over $157,500
35%
$45,689.50 + 35% of excess over $200,000
37%
$150,689.50 + 37% of excess over $500,000
Head of Household
Tax Rate
Tax
10%
10% if less than $13,600
12%
$1,360 + 12% of excess over $13,600
22%
$5,944 + 22% of excess over $51,800
24%
$12,698 + 24% of excess over $82,500
32%
$30,698 + 32% of excess over $157,000
35%
$44,298 + 35% of excess over $200,000
37%
$149,298 + 37% of excess over $500,000
Married and Filing Jointly and as
A Surviving Spouses
Tax Rate
Tax
10%
10% if less than $19,050
12%
$1,905 + 12% of excess over $19,050
22%
$8,907 + 22% of excess over $77,400
24%
$28,179 + 24% of excess over $165,000
32%
$64,179 + 32% of excess over $315,000
35%
$91,379 + 35% of excess over $400,000
37%
$161,379 + of excess over $600,000
Married and Filing Separately
Tax Rate
Tax
10%
10%
if less than $9,525
12%
$952.50 + 12% of excess over $9,525
22%
$4,453.50 + 22% of excess over $38,700
24%
$14,089.50 + 24% of excess over $82,500
32%
$32,089.50
+ 32% of excess over $157,500
35%
$45,689.50+ 35% of excess over $200,000
37%
$80,689.50 + 37% of excess over $300,000
Capital Investing
Full expensing is allowed for short-lived capital investment
on equipment and machinery for five years.Increases Section 179 expensing from $500,000 to
$1,000,000.
[Increases the phaseout threshold from $2,000,000 to
$2,500,000.
Reduces asset lives for residential and nonresidential real
property to 25 years.]
Expensing
Temporary 100-percent expensing for property placed in
service after September 27, 2017, and before January 1,
2023.80
percent expensing for property placed in serviceafter December 31, 2022, and before January 1, 2024.
60 Percent for property placed in service after December 31,
2023, and be- fore January 1, 2025.