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Should smaller businesses start making plans in wake of tax cuts?

On Behalf of | Jan 30, 2018 | Business Formation & Planning |

Principals of small and medium-sized businesses in Connecticut and across the country have pined for years for reduced tax levies on their companies. They routinely note that tax law changes salutary to businesses will enable them to buy more equipment, expand operations and hire additional workers.

Should they act now on their inclination to do so, in the wake of recent federal tax cuts announced by the Trump administration?

A recent business article discussing the lower business tax and related benefits for business owners stresses that many of them are already moving forward to take advantage of new regulatory provisions that can improve their companies’ bottom lines.

And some are not, waiting for a bit of further clarification from the IRS before they make decisions that could materially impact their enterprises.

That latter approach is preferable, say some tax pros and other advisers.

“There’s confusion out there, and confusion is never good for those kinds of decisions,” stresses one commentator.

The expectations of company owners nationally that the new tax adjustments will yield starkly positive results for profitability are unquestionably high. Clearly, legions of small companies will save many dollars by now being able to make up-front deductions on purchased equipment in an amount that approximately doubles previous deduction limits. And many businesses will now be able to fully deduct certain equipment buys all at once, rather than over a several-year period.

It’s still early, though, which means that the proverbial smoke surrounding revised tax-law provisions hasn’t entirely cleared. “The wording of the law is complex,” notes the aforementioned article, and careful company owners might want to tread carefully until they can see new benefits in crystal-clear fashion.