Carlsbad-Bookkeeper-Tax Changes 2018

3 Important Tax Changes Affecting Your Business In 2018

Lots of Tax Changes Impacting Your Business In 2018

With all the withholdings, 1099s, & minimum wage changes, how can local businesses keep track of all these tax changes impacting your payroll management, sales tax, & worker’s compensation?

Running a business is difficult, we know.

Unless you have an HR department who’s on point, a qualified bookkeeper who settles everything down to the penny – not to mention a well-versed tax attorney & patient CPA – it’s very difficult to keep track of all the important tax changes affecting your business from year to year.

The financial and tax changes are the ones most business owners struggle with.

3 Changes Affecting Your Business Taxes This Year

Tax Reform & Your Business In 2018

The tax law was enacted following the passing of the tax reform legislation before the end of last year – the Tax Cuts and Jobs Act (TCJA).

Three of the most popular points concern themselves with – from an employee & tax perspective – are the changes in employer withholdings, tax rate reductions for business owners, and wage base limits.

We’ll tackle the broad strokes of the most frequently asked tax changes affecting your business in 2018.

Tax Change #1: Withholding Tables for Employers

According to what everyone’s hearing, employees should be seeing less money withheld each period beginning as early as February.

According to the IRSemployers are to begin using the 2018 withholding tables as soon as possible but no later than Feb. 15, 2018.

Employers should continue to use the 2017 withholding tables until they implement the 2018 withholding tables.

The 2018 withholding tables reflect changes due to the tax reform legislation passed before the end of 2017.

Tax Change #2: Deductions for “Pass Through” Business Income

Starting in 2018, businesses that are C corporations will see a top tax rate of 21%.

Before the TCJA passed back on December 22nd 2017, C corps paid a graduated federal income-tax rate of either 15%, 25%, 34%, or 35% – according to Market Watch.

Owners of pass-through entities—sole proprietorships, partnerships, limited liability companies, and S corporations—will be able to claim a 20% deduction of their pass-through business income, but various limitations apply.

Some service businesses may not be able to enjoy this deduction once income exceeds a threshold amount. The change only lasts until after 2025.

Tax Change #3: Wage Base Limits

Wage base limits have also increased slightly as a result of the tax reform, of course this only impacts your business if you have employees, not 1099s or independent contractors.

There are a number of important HR laws that have changed as well this year, but minimum wage is certainly one of the big ones.

How has minimum wage changed in 2018?

  • Employers with 25 or fewer employees – $10.50/hour
  • Employers with 26 or more employees – $11.00/hour
  • City of San Diego minimum wage stays at the same $11.50/hour


White collar exemptions
Inside sales exemption – $16.50/hour

Carlsbad Bookkeeping Services that Prepare Your Business for Tax Time

Bottom Line Management will save you time and money by reviewing and compiling your year-end financials so everything is in black and white, every detail is taken care of, making it much simpler for your CPA or E.A. to prepare the return with ease.

All you have to do is show up to the appointment.

Our clients stay in their comfort zone by taking their piles of receipts and records off of their hands. We make sure everything balances to the penny every month.

Stress less — let Bottom Line Management take care of the details. Your CPA will thank you!

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