Here is what we face with the tax cuts expiring:
Couples earning 375,700 or more will have a 4.6% increase
Families earning between 232,950 and 375700 will pay 3% more
210,400 to 232,950 will pay 5% more -- this is the hardest hit class
percentage-wise
In total, 36 million people reported small business income in 2009. This is
24% of all tax filers. We aren't talking small numbers here.
Since many business owners report their income as personal income, many
actual businesses will be affected. Many CPA's are recommending that
businesses defer their income for next year and try to take it this year if
possible, including offering an incentive for those owing the business money
to pay up this year.
The hardest hit businesses will be small to middle market companies.
The biggest issue for small business owners is uncertainty. 5% is a lot for
these businesses, and it may mean the difference between paying an extra
employee, laying someone off or having to not expand as they planned.
Reasonable opportunity that they will slow hiring if they'd planned to do
so.
Also, some business owners are being encouraged to delay end of year 2010
bonuses to 2011 so they can take the deduction next year. This could affect
holiday spending.
30% of the nation makes their living from a small business that will be
affected by these increases.
