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Hillary Clinton and her campaign to assist small
businesses by reducing their business taxes with
"Checkbook Accounting."
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With the upcoming presidential election quickly approaching, there have been many unanswered questions from the Clinton campaign. Recently Hillary Clinton and her campaign has given us the specifics on her small business proposals if she was elected president for the next presidential election term.
Taxes as easy as 1,2,3....
When it comes to filing taxes for small business owners, one proposal this election is to offer a standard deductible, very similar to a personal standard deductible when filing. At this time, an amount for the standard deduction has not been mentioned, but being able to file standard will separate a small business company from a much larger business owner financially.
Currently, for any business that has a revenue of over $10 million who makes, buys, or sells their product must be accountable for the accrual method when filing. The accrual method accounting requires any business owner to include not only what is sold, but must also include the unsold inventory that is left by the end of the year. This is much more complicated especially in the following years when the product finally is sold. For businesses who accrue over $25 million in sales, they file by a much simpler process known as cash accounting process. By being able to claim the cash accounting process, the income and sales are then recognized when cash is being exchanged. Another plan going into this election year is that the campaign proposes a less aggressive financial tax reduction for businesses who make less than $1 million in revenue. The plan recognizes this proposal as " Checkbook Accounting".
Checkbook accounting is a much simpler way for small businesses to file their taxes. For smaller businesses under the Clinton proposal, instead of claiming the accrual method or the cash accounting process, a small business owner will be able to claim inventory bought earlier in the year, in which it has not been sold yet. Unsold inventory will be considered as a write off for a future year when it is sold. Per the campaign the "Checkbook Accounting" process is so easy, that a small business owner would not need to keep records, receipts, or inventory list. It is still unclear how this will change any required business tax purpose forms, but according to John Rainey, regional director of the Massachusetts Small Business Development Center at Clark University, small businesses need to keep financial statements. By not keeping any sort of financial statements and fully relying on your tax deductions, a small business owner would not have the slightest clue as to how their business or growing. Rainey suggest that as a small business owner, they should be able to use their financial statements by ends year as a small business owners inventory should be slim to none.
Checkbook accounting is a much simpler way for small businesses to file their taxes. For smaller businesses under the Clinton proposal, instead of claiming the accrual method or the cash accounting process, a small business owner will be able to claim inventory bought earlier in the year, in which it has not been sold yet. Unsold inventory will be considered as a write off for a future year when it is sold. Per the campaign the "Checkbook Accounting" process is so easy, that a small business owner would not need to keep records, receipts, or inventory list. It is still unclear how this will change any required business tax purpose forms, but according to John Rainey, regional director of the Massachusetts Small Business Development Center at Clark University, small businesses need to keep financial statements. By not keeping any sort of financial statements and fully relying on your tax deductions, a small business owner would not have the slightest clue as to how their business or growing. Rainey suggest that as a small business owner, they should be able to use their financial statements by ends year as a small business owners inventory should be slim to none.
Bigger Deductions for Small Businesses
Currently small businesses have a $5,000 deduction for start up expenses. Another proposal that was made was that there will be an increase in the deduction to $20,000. The business start up expense would start to top out at or around $50,000-$55,000. A plan to eliminate taxes on small business investments and its capital gains would also be included with the revised tax reform for small businesses. There would also be a cap on Section 179 of the tax code to a $1 million limit. Due to the recession 8 years ago, per Forbes.com, the maximum deduction was set at $100,000 which is not a huge deduction.
Military Moves Made Easy
One of the main factors that she sees is our military men and woman and their families. When relocating comes about, it is quite hard for spouses and dependent individuals to re-gain a new state license after transferring. A new plan is being made to focus on easing up the licensing requirements from state to state so we have a continuous work flow for the American families.
Clinton's Affordable Care Act
While she notices that very few are enrolled in the Affordable Care Act due to the number of employees and average wages, she would make a few adjustments to benefit all small businesses. The plan is to increase the eligibility to 50 employees and would allow more small businesses to offer retirement plans.
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With GBC Services income tax preparation services, you can rest assured that your taxes will be done right and on time every time.
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With GBC Services income tax preparation services, you can rest assured that your taxes will be done right and on time every time.
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