Robert J. Fedor, Esq., L.L.C.

Ohio business owners could see decrease in tax debt

Area business owners who are filing taxes this year may see a bit of a break on their tax liability. Ohio small business owners who are filing 1040 tax forms could be granted deductions that could result in a decrease in tax debt owed. The deductions start from the 2013 tax filing year and continue thereafter. How will this new rule impact business owners and other individuals filing taxes?

Starting with the 2013 tax year, small business owners may be entitled to deductions up to $250,000 of their business income. According to reports, a portion of business income may be reduced in deductions, which could mean fewer taxes owed. Business owners can use Schedule A on a 1040 to file for deductions.

As far as calculating the deductions on net business income, Schedules C,E and F are the forms to be used. Often, business owners and other tax payers opt to e-file their taxes and, if so, line 41 is the area to input the deduction amount. For those who are filing by paper, the form IT SBD is required to be included in their documents.

Tax debt can have a dramatic impact on someone's finances, especially if the debt is unmanageable. With the new income deductions for Ohio small business owners, the amount of tax liability may be reduced, resulting in a possible higher tax refund. It's important for business owners and tax payers to become well-informed about taxes and applicable state laws. Doing so may reduce their tax exposure and risk for audits.

Source: columbusceo.com, New income deduction for Ohio small businesses, Betty Lin-fisher, Feb. 17, 2014

No Comments

Leave a comment
Comment Information