New Jersey Budget and Business Taxes
An increase in individual income taxes passed by the state Legislature last month will also affect many New Jersey businesses, since many business owners pay personal income taxes on their business profits. The state increased the income tax from 6.37 percent to 8 percent for income between $400,000 and $500,000; from 8.97 percent to 10.25 percent for income between $500,000 and $1 million; and from 8.97 percent to 10.75 percent for income exceeding $1 million. The increases are set to expire after one year. The state increased taxes on upper-income earners as part of its effort to close a budget gap worsened by the recession. Nationally, nearly one-third of all business taxes are paid through the individual income tax, because many companies are organized as “S corporations” – limited liability companies or partnerships whose business profits are taxed as the personal income of the company’s owners.
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New Jersey Budget and Business Taxes
An increase in individual income taxes passed by the state Legislature last month will also affect many New Jersey businesses, since many business owners pay personal income taxes on their business profits. The state increased the income tax from 6.37 percent to 8 percent for income between $400,000 and $500,000; from 8.97 percent to 10.25 percent for income between $500,000 and $1 million; and from 8.97 percent to 10.75 percent for income exceeding $1 million. The increases are set to expire after one year. The state increased taxes on upper-income earners as part of its effort to close a budget gap worsened by the recession. Nationally, nearly one-third of all business taxes are paid through the individual income tax, because many companies are organized as “S corporations” – limited liability companies or partnerships whose business profits are taxed as the personal income of the company’s owners.