Things small business owners should know or do in 2018
NEW YORK — Small business owners have entered 2018 with many questions about how big their tax bills will be, but they’re also optimistic about profiting from a strong economy. And aside from financial matters, owners with employees must stay mindful about one of the troubling issues of 2017 — sexual harassment.
Here are things small business owners need to know about or do in 2018.
Taxes
The new tax law changes rates for many small business owners, whether they are sole proprietorships, partnerships or corporations. But the benefits aren’t across the board: Some owners will lose out on savings because they’ll end 2018 with income above thresholds set out in the law, or they work in fields like accounting, law or consulting.
Many business owners aren’t sure yet how the law will affect them. Although accountants and other tax professionals may have given owners some general ideas about the impact, the IRS must still write regulations that will spell out what taxpayers can do under the law and how they must comply.
Some things are known. The Section 179 deduction that small businesses can use to get an immediate break on purchases of equipment ranging from computers to vehicles to manufacturing equipment doubles this year to $1 million.
And separate from the tax bill, the IRS has set the standard mileage rate for business use for a car at 54.5 cents per mile, up 1 cent from 2017. The rate is one of two methods for accounting for how much an owner spent on using a car for business; the second is to deduct the actual expenses for the car. Under the actual expense method an owner must calculate the percentage of miles the car is driven for business, and apply that percentage to expenses like lease payments, fuel, maintenance, repairs, insurance and depreciation.
The economy
If the economy maintains the robust expansion it showed in 2017, owners’ profits and their optimism should grow as well. But that may not translate into more jobs.
In multiple surveys last year, owners indicated they’re generally sticking to their conservative hiring patterns. Job creation plans ticked higher in a fourth-quarter survey by researchers at Pepperdine University’s Graziadio School of Business and Management and Dun & Bradstreet Corp., with 42 percent of small business owners saying they’d add one to two staffers in the next six months, up from 38 percent in the third quarter.
Owners have said a significant revenue increase might persuade them to hire. For many, that could depend on whether consumer spending remains strong. The government’s figures on retail sales and consumer spending show Americans were feeling fine about spending as 2017 ended, a sign that business will be good in the new year. Retail sales rose 0.8 percent in November after a 0.5 percent gain in October, according to the Commerce Department. Overall consumer spending rose 0.6 percent in November after rising 0.2 percent in October.
Many small businesses are dependent on consumers, among them restaurants, retailers and service providers like hair salons. Consumers may feel like spending if the stock market extends its big 2017 advance; the Dow Jones industrial average rose 25 percent, giving many people with 401(k)s and other accounts a stronger sense of financial well-being.
Health care
Most companies’ health care plans are set for 2018, but there will be some changes when it comes time to choose policies that begin later this year or in 2019.
Owners who want to sign up for group insurance through the government’s Small Business Health Options Program, or SHOP, now must do so through a health insurance agent or broker or directly through an insurance company. They’re no longer able to sign up through the government website, www. healthcare.gov. However, they can visit the site to get information.
The new tax law has ended the requirement that individuals buy health insurance starting in 2019. Some very small business owners had stopped offering health plans when the Affordable Care Act was enacted because their staffers were able to get coverage through health insurance exchanges.
We really like the restaurants being oriented along Robinson facing out to the park. There is another restaurant facing out to the boulevard and the area with entertainment and bar. We think the most important corner is at Robinson and the boulevard, and they’ve really taken advantage of that.” Cathy O’Connor
President of The Alliance for Economic Development of Oklahoma City,