Big U.S. Corporate Tax Cuts Coming: How to Prepare Now

A Big Change in Business Taxes Could Be Coming

There is a new bill in Congress that could lower taxes for many businesses. Right now, most companies pay a 21% corporate income tax. This new plan would cut that number.

If your company makes goods in the United States, your tax rate might drop to 15%. Other companies could see their rate drop to 20%.

That means your business could keep more of the money it earns.

But to save money, you need to make sure your business is set up the right way. In this post, we’ll explain what’s going on, who could benefit, and how you can get ready.

What Is the Corporate Income Tax?

The corporate income tax is a tax on the money a business makes. Right now, the federal corporate tax rate is 21%. This means if your business earns $100,000 in profits, it may pay $21,000 in taxes.

This tax only applies to corporations, not small businesses like sole proprietors or partnerships. Still, it affects millions of companies across the country.

What’s Changing?

Lawmakers are talking about changing the corporate tax rate. The new plan includes:

• A lower tax rate of 15% for U.S. manufacturers
• A lower rate of 20% for other corporations

The goal is to help businesses grow, hire more workers, and bring more jobs to the U.S.

What Is a Qualified Manufacturer?

The 15% tax rate is for companies that make goods in the U.S. This could include:

• Car makers
• Food factories
• Clothing producers
• Electronics companies

If your business builds or makes things, you might qualify. But there may be special rules you need to follow. It’s not clear yet who will qualify. That’s why it’s smart to talk to a tax advisor now.

How Much Can You Save?

Let’s look at an example. Say your business earns $500,000 in profits each year.

• At a 21% tax rate, you pay $105,000 in taxes.
• At a 20% rate, you pay $100,000.
• At a 15% rate, you pay $75,000.

That’s a $30,000 savings compared to the current rate!

For big companies, the savings could be in the millions. But even small and mid-sized businesses can benefit.

How Can You Prepare Now?

You don’t need to wait for the bill to pass. Here are some things you can do now to get ready:

1. Check Your Business Structure

Only certain types of businesses pay the corporate tax. These include C corporations. If your business is a sole proprietorship, partnership, or S corporation, this change may not affect you directly.

A tax expert can review your business setup and help you decide if switching to a C corporation makes sense.

2. Review Your Manufacturing Activities

Do you make or assemble goods in the U.S.? If so, you might be able to get the 15% rate. But you may need to prove it with good records. Now is a good time to organize your paperwork and document your processes.

3. Plan Ahead for Cash Flow

Lower taxes mean more money stays in your business. You can use those savings to grow, hire more workers, or invest in better tools. A tax advisor can help you plan how to use your extra cash wisely.

4. Stay Up to Date on the Law

The tax bill hasn’t passed yet. Things can change before it becomes law. That’s why it’s important to keep up with the news or work with a firm that tracks these changes for you.

Why Work with a Tax Firm?

Tax laws are complicated. If you try to do everything yourself, you could miss out on savings—or worse, make a costly mistake.

A tax firm can:

• Help you understand if you qualify for the new rates
• Review your business setup and make changes if needed
• Prepare your tax returns correctly
• Keep you updated on new rules

The sooner you prepare, the more likely you are to benefit when the new law takes effect.

When Will This Happen?

Right now, the bill is still being reviewed. If it passes, the new tax rates could start in 2026. That means you have time to prepare—but not too much time.

If you wait too long, you might miss your chance to make changes or qualify for the lowest rate.

Who Benefits Most?

This new tax plan could help:

• U.S.-based manufacturers
• Businesses that earn steady profits
• Companies looking to expand

It’s also good news for people who want to start a business. Lower taxes mean more reward for the risk of running your own company.

What Should You Do Next?

If you own a business, now is the time to take action. Here’s a quick checklist:

• Talk to a tax advisor
• Find out if your business qualifies for the lower tax rate
• Make changes now so you’re ready when the law changes
• Plan how you’ll use your tax savings