If you’ve seriously considered starting a business or owning a franchise, there may be no better time than right now to do it.
According to a new article in Small Business Trends, new tax reform will benefit both franchisors and franchisees by allowing them to invest more capital in equipment and people to grow their businesses. Here are two reasons why.
New Corporate Tax Rate
The new corporate tax rate has been lowered to 21% under the new law, but small businesses – including sole proprietors, S-corporations, LLCs and partnerships also get a blanket reduction of 20% of their business income.
This reduction lets small business, including franchisees, to keep more of the money they make. With this increased capital, they can potentially hire more employees, provide additional employee training, or raise wages to retain good employees.
More Write-Off Potential
The limit on the amount that a business can deduct for equipment and supplies is now higher, giving you more ability to purchase everything you need to get your new franchise business off the ground and keep it running smoothly as it grows.
Business owners can now write off up 100 percent of eligible property up to $1 million under Section 179 of the Internal Revenue Code. This is double the previous amount which was cut off at $520,000. Businesses can claim the total costs of qualifying property in the year of purchase, rather than having to gradually take depreciation deductions in multiple tax years.
The type of property eligible for the deduction has also been expanded to now include improvements to real property such as heating and air systems, fire and smoke alarms, and new roofs. Certain depreciable tangible property used in connection with lodging can also be claimed.
The types of property already which were previously and are still eligible under Section 179 include, but are not limited to, office furniture, machinery and equipment, tangible personal property used in business, business vehicles that are under 6,000 lbs., computers, and software programs.
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If you think you have what it takes to be a franchisee, contact us today. Our franchise model is a great opportunity for anyone interested in entrepreneurship, but is an especially good fit for those who already work in the title industry or in real estate, including real estate brokers and agents.