With the economy in a downward trend, there is no better time than now to start a small business. A small business allows the owner to capitalize on opportunities available in a downward economy. It also allows an opportunity to create jobs, which benefits workers too. The current tax system is stacked against small business owners, and in order to the get economy going again, Tax Reform is desperately needed.
Tax reform changes small businesses need
With the election of a new president, there are new promises to help Small Businesses. One of the best ways to do this is to enact real tax reform.
Entrepreneur reported that there are six tax reform changes that would help small businesses grow if they were enacted since small business is the backbone of the economy with 28 million active businesses. One of the biggest problems though is that there aren't enough small businesses at the table to voice much-needed concerns as Congress and the new president tackle tax reform.
One of the most important concerns is that small businesses actually benefit from lower tax rates. Often corporate tax reform is discussed, but the changes made don't always help small business. Careful planning of reform is necessary to ensure that small businesses are included in necessary reforms. Lower taxes for all businesses means that consumers will receive lower prices since businesses pass the taxes onto their customers.
President Trump recognized this much needed reform in his latest proposal.
Other changes that are necessary to create meaningful tax reform include looking at pensions as well as revising the 1099 form definition. Pension reform means allowing small business owners to continue saving money for retirement while still creating incentives to create jobs.
Reform on the 1099 needs to be performed because many small businesses often take advantage of using freelancers and independent contractors to fill the gap performing work that may also be performed by employees. Currently, the IRS instructions aren't always clear on the difference between an employee versus independent contractors and freelancers.
Because of it, small business owners have an additional paperwork burden.
The impact of small business on the economy
USA Today reported that there isn't a better time to start a business. Columnist Steve Strauss said that there is a lot of optimism now in the marketplace, and this is the golden age of starting a business. The impact of small businesses is enormous since there are 28 million small businesses, and they employ half of the workers who work in the private sector. Ninety-eight percent of all exporting firms now are small businesses, and they have an enormous impact on the global economy. Currently, 17,000 small business firms employ over 500 or more workers. Approximately 82 percent of small business owners say they have achieved work-life balance.
Owning a small business allows the owner to achieve financial freedom thanks to many of the technological advances that have been achieved to streamline the business process. These tools include many online business tools for promotion, like Facebook Ads and Google Search.
