What Tax Reform Means for Small Business

by Marianne Cederlind

What keeps business owners awake at night? According to the National Federation of Independent Businesses’ (NFIB) “Small Business Problems & Priorities Report,” five of the Top 10 issues directly relate to taxes. To give context, concerns regarding cash flow ranked a lowly 25 on the list, with business financing trailing at 69 and 70. The entire report can be viewed online at www.NFIB.

It is no surprise that articles and arguments abound about how the newest Tax Reform rules will affect businesses. From the smallest Mom & Pop shops to the Walmarts of the world, no business entity has been left out of the mix in this major tax overhaul. Whether a sole proprietorship, partnership, LLC, C Corp or S Corp, change is coming. In fact, in some cases it has already arrived.

As an example, financial accounting standards require deferred tax assets and liabilities to be remeasured when income tax rates change. Accordingly, the new legislation passed in Dec. 2017 had an immediate and direct impact of lowering Mission Valley Bancorp’s 2017 net earnings by $310,000. This is just one example; consider the impact of all the businesses affected.

From the perspective of a community banker, it appears that the road to preparation and survival of the new tax laws may be a little bumpy for small to mid-sized businesses and the time to prepare is now.

At Mission Valley Bank, your success is our mission. As part of our ongoing efforts to be a Trusted Advisor to clients, we are hosting our first quarter 2018 Business Education Series on Thursday, March 1, 2018. Eric Sato and Ho Yang with Edwards, Sato & Yang, CPAs, will present “Tax Reform – What it Means for Your Business,” a business tax law update.

It was Francis Bacon who said, “Knowledge is power.” So, before you endure another sleepless night worrying about tax complexities and government action uncertainties, plan to join Mission Valley Bank and attend this no-cost breakfast seminar at Angeles National Golf Club in Sunland/Tujunga. You’ll leave with a better understanding of what recent tax changes mean for your business. Reservations are required, and seating is limited. For details and to reserve a seat, call Anton Krotov at 818.394.2362.