by: Devin Cunningham
Great news for the Ohio small business owners is in store for 2016! Currently, Ohio small business owners are able to deduct 75% of the first $250,000 of Ohio net business income. This Ohio Small Business Deduction is limited to $187,500 for married couples filing jointly and $93,750 for single filers and is taken on the Ohio individual income tax return. In 2016, the percentage deduction will increase to 100% of the first $250,000 of net business income. And, the 100% deduction will be permanent for the foreseeable future!
This deduction results in significant tax savings for Ohio small business owners, specifically for those investing in pass-through entities. Small business owners owning at least 20% of a Partnership, Subchapter S Corporation (S-Corp), Limited Liability Company (LLC) or a Schedule C can now retain a greater percentage of income from their Ohio business investments.
The only entity type not eligible to receive the Ohio Small Business Deduction are Subchapter C Corporations (C-corps). In some cases, it may be beneficial for these entities to convert to S-Corps in order to capture these tax savings.
Are you taking advantage of this deduction?
If you have questions or want to talk about planning for next year, give us a call at 216.524.8900.