Overall, Tax Bill a Net Positive
The passage of H.R. 1, the tax reform bill, will benefit owners of small businesses, according to a statement issued by PIA National.
Many PIA members own independent insurance agencies that are organized as sole proprietorships, partnerships, or Subchapter S corporations. Such small businesses do not pay corporate income tax. Instead, their income “passes through” the firm and appears directly on their owners’ individual tax returns, where it is taxed as normal income.
While the bill provides provisions that will result in savings for some pass-through entities, the benefit is limited by an income threshold that will prevent some PIA members from benefitting from the maximum new deduction available to certain pass-throughs. Still, overall this legislation will be a net positive for most PIA members. PIA will work with our members to maximize their benefit from this measure and will remain involved in the forthcoming regulatory process.