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    Proposed Ohio Business Income Deduction Changes Will Increase Taxes For Business Owners

    Posted by Angela Wurtenberger on May 23, 2019 12:04:31 PM

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    The Ohio House is pursuing a significant change to Ohio’s Business Income Deduction currently benefiting owners of Ohio pass-through entities. The current Business Income Deduction provides great tax benefits for business owners; however, it is costing the state approximately $1 Billion in revenue.  Proposed House changes would:

    • Reduce the current $250,000 tax-free threshold for qualified income to $100,000 (This change would impact 14% of business owners)
    • Eliminate the current 3% flat rate for business income beyond $250,000 in qualified income
    • Make these changes retroactive to Jan. 1, 2019 (Impacts 100% of business owners now using the Business Income Deduction)

    The intent is to use at least some of the funds to pay for across-the-board income tax reductions, including eliminating the lowest two tax brackets so that those earning up to $22,250 will not owe state income tax and reducing the top rate to around 4.6%.

    The bill has been forwarded to the Ohio Senate and is awaiting revisions. Governor Mike DeWine has until June 30th to sign the two-year budget.

     


    I If you would like to speak to one of our tax specialists for more information, please call: 1 (866) 760-0940 or send a note to Miranda.Hawk@brixeyandmeyer.com to setup a time to speak.  

    Topics: brixey and meyer, ohio, Tax, Tax Team, Business Owners, Deductions

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