As the Senate and House move to reconcile a tax bill, retirement industry advocates are cautioning that lower tax rates on so-called pass-through businesses could lead some business owners to reconsider offering 401(k) savings plans.
In the House version of the Tax Cuts and Jobs Act, 30 percent of owners’ profits from pass-through businesses—sole proprietorships, partnerships, limited liability companies, and subchapter S-corporations—would be taxed at 25 percent. Under current law, business profits are taxed at the individual rates of business owners.
The Senate version of the TCJA would allow businesses to deduct 23 percent of the first 50 percent of owners’ income.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
