The new tax code law has maintained most of the self-employment deductions and now has included some new deductions to help offer some relief. Some of the tax deductible benefits the self-employed can look to claim this year is: receiving a deduction on 50 percent of the Social Security and Medicare taxes your pay as both employer and employee; you will still be able to deduct 50 percent on food and beverages having to do with business, though certain entertainment expenses have been eliminated. Small businesses now have a new deduction, the Qualified Business Income Deduction (QBI), in which they can deduct up to 20 percent of their QBI.Read More
Senator Ana Quezada of Rhode Island is proposing that the state enact a 1 percent tax on the sales of hookah and vaping products. The senator plans to use the money from the acquired sales tax on the products to send back to cities and towns to go toward educating the youth on the dangers of smoking e-cigarettes. A spokesman for the Consumer Advocates for Smoke-Free Alternatives Association argued that the state has plenty of money to already educate the youth with the nearly $200 million they collected in 2018 from tobacco revenue. He also went on to say the tax would be a punishment to those looking to get away from smoking tobacco products.Read More
This year has seen the biggest tax overhaul in years from the Tax Cuts and Jobs Act. Many residents in Massachusetts and Rhode Island are frustrated over seeing a smaller tax return, though they did not pay more in federal. With the new withholding changes, many Americans were taking home more home in their paychecks, which resulted in less being withheld and having a lower tax return. Unfortunately, the new cap on SALT tax deductions hurt many residents as the automobile taxes, high real estate taxes, and high state taxes for both Massachusetts and Rhode Island caused many to go over the $10,000 threshold.Read More
Changes in the new tax code under the Tax Cuts and Jobs Act has raised the amount of factors that would cause the IRS to take a further look into your income tax return. It is no longer just recording higher income that could bring the IRS to dig deeper and possibly audit your 1040 return, now the events of recording large charitable donation deductions compared to your reported income can raise a red flag. Certain rental activities may also catch the attention of the IRS to look in further, with repeated losses and renting out rooms of your house.
If you have a day job but invest some of your income on the die, than you may be qualified as a casual investor and that means it will have an impact on your tax bill. Your investments affect on your taxes will be determined by a multitude of factors such as activities over the past year, the size of your portfolio, and whether you decide to take the standard deduction on your taxes or choose to itemize. The tax rates for any capital gains sold, such as stocks, will depend on a number of factors including: your income tax bracket and if the capital gain was short (1 year or less) or long-term (more than 1 year).
Governor Gina Raimondo has stated her desire for the state to eventually have a $15 minimum wage, with the current minimum wage rising to $11.10 from $10.50 made effective on January 1st, 2019. According to an article by the Providence Journal, the National Federation of Independent Business had released a statement against the Governor's want of continuing to raise the state minimum wage. The group argues that each time the minimum wage is raised it continually hurts small business and the group, who describe themselves as "the nation's largest advocacy organization representing small and independent businesses", is pushing back against the wage hikes.
According to a recently released global study on cash flow behaviors, attitudes, and status by Inuit (QuickBooks),"The State of Small Business Cash Flow", had found that 61 percent of small business owners around the world struggle with cash flow. The study had also found that 32 percent of small business owners have admitted to not being able to pay their vendors, pay back pending loans, or pay their employees or themselves. In the United States, 52 percent of small businesses have lost $10,000 or more passing on projects or sales due to insufficient cash flow with U.S small businesses losing on average $43,394 per year for the same reasons.
Both Representative Bill Pascrell and Senator Bob Mendez are looking to introduce a bill that would cancel out the $10,000 SALT limitations brought on by the Tax Cuts and Jobs Act. The lawmakers from New Jersey argue that the limit on the state and local taxes is unfair to those who pay higher state taxes, especially property taxes, and that their constituents were hurting from the lack of deductions. The average household in Pacrell's district is paying an estimated $18,000 annually in property taxes and 63 percent of CPA's in the New Jersey Society of CPA's have stated that those making under $200,000 will be seeing their federal tax bills going up due to the SALT cap.Learn More
Democratic Leaders of Rhode Island held a meeting with local business owners on a variety of proposed tax changes in Governor Gina Raimondo's budget for the upcoming fiscal year. The leaders spoke to the Greater Providence Chamber of Commerce about the proposed tax on companies who have employees enrolled in Medicaid, as well as the change to lowering the car tax phaseout for this year. House Speaker Nicholas Mattiello voiced his concerns over cutting the car tax phaseout and extending the state funded "free" college tuition, stating the state already has "large deficits as far as the eye can see." Senate Majority Leader, Michael McCaffrey, also voiced his disapproval for the Raimondo's idea of legalizing marijuana.
Many would be entrepreneurs hold off on starting their businesses due to the belief that they need a large amount of capital to fund the startup. However, according to a poll by Kabbage Financial Services, over 58 percent of the small business owners polled stated that they were able to start their businesses with $25,000 in capital. The poll found that 46 percent of small business owners claimed that they were able to start their businesses with less than $25,000. The costs of launching businesses varied with those in industries such as: restaurants, medical offices, and manufacturing claimed to have used more than $100,000 to open their businesses; owners in other industries such as accounting, online retail, and construction & landscaping said their businesses needed less than $5,000 to start.Learn More