Thursday, July 30, 2015

Ohio Tax Budget - The Impact on Your Wallet

Cathy A. Robinson, CPA
Senior Manager
Chances are you pay income taxes to the state that you reside in. For individual taxpayers and businesses in the state of Ohio, there's good news. 

On June 30th, 2015, Governor John Kasich signed into law, the Biennial Budget Bill. So how exactly does this bill affect you?

If you are just an individual taxpayer, the bill reduces the personal income tax rates 6.3 percent for all tax brackets. This means the new top marginal bracket for individuals is 4.997 percent.

Attention shoppers: if you're a fan of shopping, you will be happy to know the state sales tax rate was not increased. It still remains at the current rate of 5.75 percent.

If you own an S Corporation, partnership, limited liability or a sole proprietorship in Ohio, there's even better news for you.  For fiscal year 2015, you will be able to deduct 75 percent of your Ohio apportioned business income up to $250,000. Also beginning in 2015, the excess business income will be subject to a three percent flat tax. The tax will be effective for 2015 and going forward. 

As a business owner, you should also be aware there are two tax credits that may now be able to save your company taxes since the law has changed the calculation. These credits are the Jobs Creation Tax Credit and the Jobs Retention Tax Credit.

For those who file the CAT tax, there's good news for you as well since the CAT tax rate was not increased due to the law.

If you have any questions in regards to the bill and how it will affect you, contact your accounting professional.