Republicans including Gov. John Kasich have promoted tax deduction as a way to help small businesses expand. Owners could take a 50 percent tax deduction on up to $250,000 of income for 2013. But according to The Columbus Dispatch, just 379,000 business filers took the tax deduction as of Oct. 19. That’s roughly half of the 717,000 filers the state’s Department of Taxation anticipated when the Republican-dominated Legislature passed the tax break in June 2013.
The newspaper reports that those business filers saved $287 million in income tax. That’s below the $533 million in projected savings. It appears however that it’s too early to say why the numbers didn’t match the expectation.
The average filer – those entities whose profit and income are one in the same – saved about $760. Most claimed the deduction on less than $40,000 worth of business income, providing average tax savings of less than $150. A fraction had incomes topping $180,000, with an average savings of nearly $6,000.
“But I also know this is typical, whether it’s workers’ comp rebate checks or tax refunds,” Roger Geiger, executive director of the National Federation of Independent Businesses/Ohio, said. “It’s an education process with small employers.”
Gary Gudmundson, spokesman for the state’s tax department, said it’s too early to tell why the numbers fell short of the expectation. He said it could require updated federal data two years from now to get a more complete picture.
Gudmundson said people might not have been aware the tax break was available, although the agency talked to accountants and state Tax Commissioner Joe Testa has discussed it around the state. “You do the best you can,” Gudmundson said. “It’s right there on the form.”
It therefore appears that Ohio small businesses paid hundreds of millions of dollars in income taxes they didn’t have to. Last year, Ohio business owners could receive a 50 percent tax deduction on up to $250,000 of income. About 379,000 tax filers took the credit out of the 717,000 filers the state’s tax department thought could do so. It basically means that those businesses saved $287 million of the $533 million the state believed could be saved.
Lawmakers have temporarily boosted the deduction from 50 percent to 75 percent for 2014.
Latest posts by Richard Carlisle (see all)
- Research Points Out The Risks Of Getting A Tattoo Related To Ink - Sep 14, 2017
- The Venom Of Fire Ants To Be Used In Skin Treatments? - Sep 12, 2017
- Sleeping With Your Dog Might Help Ensure A Good Night’s Rest - Sep 11, 2017