For small businesses, the biggest tax fight in decades isn’t over
Last year, the federal tax proposals were on everyone’s mind. Announced in the middle of the summer, the changes hit the small business community like a ton of bricks. They were the most drastic reforms to small business taxation in decades, leading to months of sustained outrage.
As a result of the intense pushback from entrepreneurs from coast to coast, the landscape shifted. In a package of government concessions during Small Business Week in October, some of the proposals were watered down and one of them – changes to capital gains – shelved indefinitely. Business owners were particularly pleased to see the government reinstate its promise to lower the small business tax rate.
Unfortunately, the signs government was listening took an about-face in December, when it announced that it would move forward with its plan to restrict the way owners share business income with family members. What was particularly galling was that this announcement was made only a few weeks before these significant changes took effect on Jan. 1, 2018. I doubt there is a single business owner in the country that understands what they are to do, and many will discover they are offside under the new rules if they are unlucky enough to be audited a year or two down the road.