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2023 Tax Changes - Don’t Get Caught!

As a business owner, keeping up with tax changes can be overwhelming, but it’s crucial to stay informed to avoid unnecessary penalties. With the new year approaching, it’s important to know what you can expect in terms of tax changes that might affect your business.

Let’s discuss the upcoming 2023 tax changes that every business owner needs to know about and how you can prepare for them.

Changes to Corporate Tax Rates

One major change in 2023 will be the reduction of the corporate tax rate from 21% to 20%. This small change might not seem significant but will make a difference for larger corporations. Additionally, small business owners who file as C corporations will benefit from this tax break, allowing them to put extra money back into their businesses.

Increase in Social Security Wage Cap

In 2023, the Social Security wage base is expected to increase from $142,200 to $147,000. This means that any income above this limit will not be subject to social security tax, resulting in higher take-home pay for employees. However, as a business owner, it’s important to remember that you will also need to pay the corresponding employer portion of social security tax on any income paid to your employees above the new wage base limit.

Changes to Depreciation Rules

Depreciation rules for businesses will also be changing in 2023. The new regulations will simplify and streamline the process of claiming expenses for business assets. Businesses will have the option to use an accelerated or straight-line method of depreciation depending on the type of property purchased. These changes will help simplify the depreciation process, making it easier for small business owners to understand and claim expenses related to their assets.

Changes to Foreign Income Tax

For businesses that operate internationally or have foreign subsidiaries, the new tax changes will make calculating foreign income taxes easier. In 2023, businesses can now elect to calculate foreign income taxes on a consolidated basis, making the process simpler and reducing the need for detailed calculations for each foreign subsidiary.

Changes to Tax Forms

Finally, in 2023, businesses can expect a revision to tax forms. These changes are designed to be more user-friendly and simplify the tax filing process. Although it might take some time to get used to the new forms, they will ultimately make tax filing easier and faster.

These are just a few of the tax changes that business owners can expect to see in 2023. It’s essential to stay informed and take the necessary steps to prepare for any changes that will affect your business.

By doing so, you can ensure that you’re not caught off guard and are doing everything possible to optimize your business’s tax position.

Ready for the new changes this tax year?

Want expert advice to cut the confusion and help your business add more zeros to the end of your bottom line?

Then schedule your one-on-one call today with Orange Crush Business Consulting!

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