I'm just going to say it - taxes are boring. And confusing. While taxes and tax policy are extremely important to understand for entrepreneurs and small business owners, and for the American economy as a whole, no matter how you slice it, words like "deductions", "itemized", "exemption" - put most of us to sleep.

Not only is talking about taxes boring, but it is also hard to get a good grasp of what this reform actually entails because most of the information available is so incredibly biased. Getting tax reform done will be a major victory for Republicans in simply being able to say "we did what we said we were going to do" in the same way that Obama Democrats did for the ACA. So be careful what you read as both sides are making sure that their one-sided views are being echoed.

Yet even with both sides fighting, the bill now only needs to clear the Senate, and truly represents a major shift in tax policy. So while most of us are asleep and confused by what's going on, we need to wake up. This is particularly important for entrepreneurs and small business owners, who must be woke when it comes to issues of money especially in early stage ventures.

Here, I want to break down the important parts for entrepreneurs and small business owners and provide some simple advice from all this confusing headache.

The four major changes from the final tax bill affecting small companies and entrepreneurs are: 1) the decreases in the individual tax rate 2) the addition of a deduction for "pass throughs", 3) the easing of capital investments expensing, and 4) the decreases in corporate tax rates.

As part of the reform, almost all seven income tax brackets will see a tax rate decrease in the short term, as well as change in the bracket range which will lead some with higher incomes to lower rate brackets. The decrease in individual tax rates affects entrepreneurs and small businesses because almost all are "pass-throughs", in which business income is taxed only on the tax returns of owners and not as separate business entities. If you are one of these companies, business taxes and individual taxes are essentially one in the same such that a decrease in the individual tax rate is effectively also a decrease in the business tax rate.

In addition, pass-throughs are receiving somewhere around a 20% deduction, making taxable income lower, and decreasing the tax bill. However, beware that there are still many complicated caveats limiting the maximum amount a pass-through owner can deduct (some of which surprisingly have to do with limiting how business owners benefit from using investment income like capital gains as a tax shield, which no one seems to be mentioning).

If you are a business owner you will now also be able to expense capital expenditures immediately, without having to wait. In addition, the reform increases the maximum amount that can be expensed and streamlines the process, as it creates one uniform treatment of capital expense rather than using a schedule that varies from industry to industry.    

Finally, entrepreneurs and small business owners cannot ignore analyzing the effects that the large decrease in corporate tax will have on their businesses. As large corporations will move from a 35% to 21% corporate tax rate, not only will this lead to a direct cash windfall, it will also open up even more funds for large corporations as they have less incentive to hire massive teams of accountants to find creative ways to hide money. Whether this will spill over to your small or new business depends on whether large corporations represent either potential suppliers, buyers, or competition to you, and what large corporations will do with this cash windfall (invest, purchase more inventory, nothing, etc.).

All in all, small and early stage companies (which are more likely to rely on bootstrapping to grow) will benefit from the reform, particularly those that are capital intensive. It is unclear, however, whether the additional tax benefits will actually move the needle for early stage and small companies.

My advice for entrepreneurs and small business owners is simple:

1. Get it while the getting's good. Small and new business owners particularly those in early stages and those competing with larger corporations should immediately reinvest the increased tax returns. In early stages when money is oxygen, the returns represent a much lower risk form of capital than credit, for instance, so entrepreneurs should reinvest. Similarly, smaller more agile companies will be able to take advantage of these gains faster than large corporations that need a larger scale of accounting support to figure out their taxes. Also, small businesses that have put off capital intensive investments that can significantly enhance productivity such as process improvements in the supply chain, should pursue these options right away. 

2. For new and small businesses, don't fire your tax accountant just yet. While there are some simplifications to the code, the new tax code is unfortunately still a beast. Until it shakes out, hang on to that accountant. 

3. For larger corporations, be careful on your bonuses to C-level executives. Democrats will be looking to publicize outrageous bonuses in the wake of this bill. Public attention for the foreseeable future will highlight large businesses that do not use cash windfalls for investment and hiring, but rather for financial gain.  

In my view, the legislation is a missed opportunity for supporting entrepreneurs in a more direct way. Legislation truly aimed at supporting new business could have directly addressed startups by minimizing income taxes for entrepreneurs within a five year period of company inception, for instance. Not only would this helped to make our markets more competitive, but it would and helped us recover from the entrepreneurship nosedive we have yet to claw back from following the Great Recession.

One thing is for sure: be ready to hear the sound bite that this is the "most massive tax overhaul in 30 years" for the next 2-4 years (at least). Just like the previous administrations reliance on "the largest recession since the Great Depression" was used to dramatize the recession so that slow economic improvement was not condemned, so too will "the most massive tax overhaul in 30 years" buoy countless Republican campaigns in the coming years regardless of the outcome.