Small businesses get boost from tax changes
Posted December 20, 2017 7:27 p.m. EST
Updated July 13, 2018 1:40 p.m. EDT
Durham, N.C. — Although the core of the tax reform that cleared Congress on Wednesday benefits corporations – the higher the income, the bigger the savings – small-business owners also found reason to celebrate.
S-Corps, which file on personal income returns, will be allowed to deduct 20 percent of their business income on their taxes and write off equipment investments in one year instead of spreading them over several years.
"I think it's a win-win for small business," said Joe Lee, who owns with his wife Custom Sheetmetal Services Inc. in Durham and the decades-old family business, Lee Air Conditioners Inc. "We're job creators. We hire people. We pay people. We pay them a good salary, (and) they buy goods and products, which helps the economy."
Cutting the corporate tax from 35 to 21 percent and allowing more deductions for the 17-worker sheet metal business will trickle down, Lee said.
"Taxes have been a burden," he said, adding that the changes will allow "more investment into this company, being able to provide raises when needed to these people."
North Carolina State University economist Mike Walden predicts modest growth from the tax cuts, along with a deepening national deficit.
"It all depends on what kind of growth boost we get from this tax bill, if any," Walden said.
Many small businesses that don't file as corporations almost missed out on the breaks until Congress tweaked the tax bill to allow the 20 percent deduction and the faster depreciation of equipment, he said.
Lee said he expects to buy new equipment and pay down debt in the coming years because of the tax breaks.