Small Businesses and Taxes
You will be hearing a lot about small businesses and having to give them tax breaks in order to increase the amount of jobs in the U.S. You hear this from both sides of the political aisle.
Recently though, the Treasury Department has redefined its definition of the "small business" and then did some research based upon the new definition. First, the new definition of a "small business" by the Treasury Department is "a firm that has combined income or deduction of at least $10,000 but not more than $10 million and one that operates in a businesslike manner."
Under this new definition, small businesses account for only about 17% of total business income. Further, this new definition would encompass 20 million owners, down from the old definition of 35 million. Of the new 20 million owners, only five million have any employees at all. This is the case with most businesses I set up for clients. Most of them are owner/operators and have no other employees except for a spouse or other co-owners.
Having stated the above, there are other government organizations that define small businesses differently. So when you hear the talk about tax breaks and other benefits for "small businesses" make sure you know what definition they are using.
To learn more about small businesses or starting your own small business, please contact our business and tax attorneys at Wood, Atter & Wolf, P.A. in Jacksonville and Ponte Vedra Beach, Florida.
