What can you do to reduce your corporate taxes?Legal Law
President Donald Trump signed a tax overhaul bill, which delivered a major tax cut to American corporations along with a package of temporary cuts for other businesses and most people.
The bill slashes the corporate tax rate to 21 percent from 35 percent and cuts individual tax rates across the board. So if your corporation has net profits, your tax percentage as a proportion of net profit will be less than it was years before. Trump believes this will make US corporations more competitive in the global marketplace. You have felt that because if the high percentage of taxes that American corporations have to pay, it reduces the competitive ability of these American corporations. Trump said the bill will bring abandoned factories back to life. He said Bob Kraft, owner of the New England Patriots, called him to say he’s buying a new paper mill in North Carolina because of the tax law. Of course, this is just one event. This will have to be developed in the coming months to see if that is the case. President Reagan preached the “trickle down effect” in the 1980s, let’s see if this idea works in the real world.
In this case, a 21% tax rate is significantly lower than the 35% tax rate. For high-income individuals with LLCs who are not considered entities, a move to establish a C Corporation can, if properly formed, lower your taxes by thousands of dollars. Also, if your health insurance costs are high, this tax planning strategy can help you spend your health insurance within the corporate structure.
Overall, the bill is projected to decrease federal revenue by nearly $ 1.5 trillion over the next decade. Trump and Republican leaders have said they hope the business tax cuts will spur enough economic growth to make up for lost revenue. In other words, the federal government is willing to have a temporary decrease in revenue for the economy to stimulate economic growth, which will overcompensate for the loss of tax revenue. Therefore, this income tax reform bill is intended for business owners to save money on their income taxes so that they can spend the savings wisely and inject capital into the economy to add more jobs. and more business profit activity. At the end of the day, companies that maximize income tax incentives will be the ones to benefit from this new 2017 income tax legislation,