The House Ways and Means Committee last week approved a revised bill that would lower taxes for many small business owners, and Senate Republicans are also proposing changes in the tax laws.
The House bill provides for a 25 percent tax rate for many sole proprietors, partners and shareholders in what are known as S corporations. These owners have what are called pass-through companies because their business income is not taxed at the company level, but passes to their 1040 returns. The bill also creates a 9 percent rate for the first $75,000 in earnings by some smaller pass-throughs.
The Senate bill would let business owners deduct some earnings and then pay at their individual rates on the rest.