Either Donald Trump, the Republican Presidential candidate or Hillary Clinton, the Democratic Presidential candidate, would be the next President of the United States. Each of them has presented diametrically opposite tax plans. Both plans will affect entrepreneurs in different ways.
It is to be kept in mind that tax plans made by candidates during the electoral season is not set in stone. It must be remembered that whoever gets the presidency must tackle a large list of economic realities. A debt of $19.5 trillion is being carried by the United States Government. Taxpayers bleed $680 million every day to simply pay off this debt. What’s more, the debt gets higher every passing minute.
Empirically speaking, the tax scheme made by Trump calls for a simplified tax code held together by three brackets of 12 percent, 25 percent and 33 percent. Everyone would enjoy a tax cut as per the Republican’s proposal. Clinton’s plan is a little more complex. The Democratic plan will leave present income tax rates almost unchanged for those earning below $250,000. Maximum taxes, however, will be imposed on the creamy layer.
Managing an uncertain future
When it comes to small business owners, they will lose the most if they do not undertake a few actions to protect their businesses from increasing taxes. This is even understood by the government. The US House of Representatives have set up Small Business Committee to look into the matter and the group has provided a dismal answer. The business winners will be the ones who will take seriously all towering debts, rising taxes and other factors and then prepare to tackle them much in advance. They will not wait for any financial apocalypse if it hits them.
To manage such catastrophes, small businesses must shore up their cash flow. They must also have more liquidity. These two will assist to prepare them for unexpected economic happenings or the incidence of higher taxes. There are a number of ways to achieve this, the most obvious solution is to hire the services of an experienced tax professional or CPA who can assist the business growth and also be a part of the financial team. The business must meet the CPA a minimum of two times every year and one of them must be outside the hectic months so that tax reduction strategies can be developed. Second opinions on tax returns must also be taken every three years.