Cathy Robinson, CPA
Principal
Beginning in 2015, Ohio has increased the benefit to
taxpayers for the Ohio Business Deduction. A business will receive up to 75% deduction on
their first $250,000 of business income. This means up to $187,500 of business
income will go untaxed by the state of Ohio no matter where it was earned. The calculation removes the apportionment
calculation that was part of the original deduction. The remainder of the business greater than
$250,000 will be taxed at the graduated rate of up to 3%. The new deduction applies to both pass - through
entities and proprietors alike. The
taxpayer should be careful though and take a closer look at what exactly
constitutes business income. Business
income includes monies received in the ordinary course of a trade or business
operation.
The deduction gets even better in 2016 when individuals
can deduct 100% of their business income from their personal Ohio income tax.
Please remember to consider this tax deduction when
preparing your return, and as always when in doubt, consult your advisor.
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