This is How Small Business Owners Can Take Full Advantage of the Tax Cuts and Jobs Act

Tax time is no one"s favorite time of year. But for small business owners, this year"s filing deadline at least comes with the promise of better rates ahead: Many of the changes included in the Tax Cuts and Jobs Act, passed by Congress in December, are going into effect.

As entrepreneurs, we should expect to benefit--at least, temporarily--from the new tax plan. My company, Manta, conducted a poll in January and found that 83 percent of business owners anticipate their companies will be positively impacted by the changes. Nearly as many, 80 percent, said they support the Tax Cuts and Jobs Act.

Some are already feeling the benefits of having more money in their pockets, according to another poll we conducted last month. 34 percent of small business owners said their business income had increased as a result of the tax reform, just three months into the year. 42 percent have already changed their budgeting or financial planning because of the new tax law.

It"s time to start preparing for the changes--if you haven"t already.

For the most part, the provisions of the Tax Cuts and Jobs Act that benefit small businesses go into effect this tax year -- meaning they won"t impact the returns that are due this month. 

The 58 percent of small business owners who have not yet adjusted their budgets should get started, however. While that big refund check may be a year away, it"s not too early to plan accordingly and make sure you take full advantage of the potential savings. 

The first step is to review your company"s legal structure and determine how it will affect your taxes. One of the most important changes in the new tax law allows pass-through entities (such as S corporations and LLCs) to deduct up to 20 percent of their business income.

However, this doesn"t apply to certain professional services firms. Review your situation with a tax professional or attorney--you might be able to adjust your business structure to take advantage of this deduction. 

Make the most of your company"s tax savings.

The Tax Cuts and Jobs Acts allows businesses to immediately write off the full cost of new equipment and other property, instead of depreciating the expense over five or more years. The new law also protects these write-offs from being rescinded in the future. 

This is great news for business owners who want to invest in their growth. According to our polls, 28 percent of small business owners plan to use their tax savings to invest in new technology and 21 percent plan to open a new location or expand. The immediate write-off should make these investments (and your cash flow) much more manageable in the short term.

Just check with your tax advisor before making a major purchase--you could run into unforeseen obstacles. For example, the depreciation rules for "heavy" SUVs--those with a gross vehicle weight above 6,000 pounds--are different than for light trucks and vans. You want to be prepared for the potential impact on your taxes.

Streamline your expense tracking and tax prep.

Make sure you accurately track and document all business expenses. Our polls found that 21 percent of small business owners still use paper receipts to track expenses.

Think about that for a second. It"s messy and inefficient, and you risk losing receipts or miscategorizing expenses.

Hiring a pro is probably the best way to ensure that you take full advantage of the new deductions and stay on the right side of the law. The U.S. tax code is confounding to even the most experienced business owners--20 percent of poll respondents told us they didn"t understand all the deductions available to them. Whatever else Congress accomplished with the Tax Cuts and Jobs Act, they definitely didn"t simplify things.

Use a mobile application or accounting software to scan and save digital copies of your receipts and categorize the expenses. Then, when tax time rolls around, you can output a well-organized report or import the data directly into your tax prep software. And if you use an outside accountant or tax preparer, they"ll greatly appreciate you providing a digitized expense report instead of handing over shoeboxes full of paper receipts.

Tech

20 Years Ago, Steve Jobs Revealed the Single Word That Led to Apple's Great Success

The power of focus.

Without it, you"re doomed to a life of distraction. A life in which others" priorities dictate on what you spend your time. As you move from one shiny object to another, you may get lots of things done--but few things ever get done well.

Or, you may find your life is ruled by procrastination, where doing great work is derailed by social media and YouTube videos.

But how can you learn to achieve focus, in a world that is built to distract?

20 years ago, Steve Jobs answered that question.

In 1997, Steve Jobs had just returned to Apple, the company he had been ousted from over a decade before. He was answering questions from developers at Apple"s Worldwide Developers Conference when someone raised the topic of "OpenDoc," a software engineering framework that Jobs decided to kill upon his return.  

In addressing the question about OpenDoc, Jobs took opportunity to drop some major wisdom.

"I know some of you spent a lot of time working on stuff that we put a bullet in the head of," begins Jobs. "I apologize. I feel your pain." The audience laughed appreciatively.

He continued:

"But Apple suffered for several years from lousy engineering management. And there were people that were going off in 18 different directions--doing arguably interesting things in each one of them. Good engineers. Lousy management.

And what happened was, you look at the farm that"s been created, with all these different animals going in different directions, and it doesn"t add up. The total is less than the sum of the parts. And so we had to decide: What are the fundamental directions we"re going in? And what makes sense and what doesn"t? And there were a bunch of things that didn"t. And microcosmically they might have made sense; macrocosmically they made no sense.

...When you think about focusing, you think, well, focusing is about saying yes. No. 

Focusing is about saying no."

Boom drops the dynamite.

Focusing is about saying no.

This ability to say no was arguably Jobs"s greatest skill. When Apple brought Jobs back, his first order of business was to shrink the product line--and make sure whatever Apple made, it made extremely well.

"Steve was the most remarkably focused person I"ve ever met in my life," said Jony Ive, Apple"s design chief and the man Steve Jobs once described as his "spiritual partner." Ive went on to explain why achieving focus isn"t as easy as it appears on the surface.

Jobs would regularly ask him: "How many things have you said no to today?" Ive says he would have "sacrificial" things he turned down. "Well, I said no to this. And no to that," he would tell his boss. "But he knew that I wasn"t vaguely interested in doing those things anyway."

"What focus means is saying no to something that you [think]--with every bone in your body--is a phenomenal idea," he continues. "And you wake up thinking about it. But you say no to it because you"re focusing on something else."

Putting It Into Practice

Whatever your role or position, you"re faced with choices about your work on a daily basis. Should I join this meeting? Do I really want to take on this client or project? Should I focus on this task at the expense of that one?

For many, it"s not easy to say no. You may try to rationalize: "I don"t want to hurt anyone"s feelings. They won"t understand. I"ll find a way to get it all done."

No, you won"t.

Learning to say no begins by sharpening your emotional intelligence--the ability to make emotions work for you, instead of against you. By refusing to let temporary emotions lead to permanent decisions, you"ll realize that lack of focus easily leads to regret.

Then, instead of trying to do it all...

You can simply do it right.

So, choose wisely.

Because every time you say yes to something you don"t really want, you"re actually saying no to the things you do.

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