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PPP Loans Have Reopened: Let’s Review the Tax Consequences
The Small Business Administration (SBA) announced that the Paycheck Protection Program (PPP) reopened the week of January 11. If you’re fortunate to get a PPP loan to help during the COVID-19 crisis (or you received one last year), you may wonder about the tax consequences. Background on the loans In March of 2020, the CARES Act…
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The Importance of S Corporation Basis and Distribution Elections
S corporations can provide tax advantages over C corporations in the right circumstances. This is true if you expect that the business will incur losses in its early years because shareholders in a C corporation generally get no tax benefit from such losses. Conversely, as an S corporation shareholder, you can deduct your percentage share…
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New Business? It’s a Good Time to Start a Retirement Plan
If you recently launched a business, you may want to set up a tax-favored retirement plan for yourself and your employees. There are several types of qualified plans that are eligible for these tax advantages: A current deduction from income to the employer for contributions to the plan, Tax-free buildup of the value of plan…
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Tax Responsibilities if Your Business is Closing Amid the Pandemic
Unfortunately, the COVID-19 pandemic has forced many businesses to shut down. If this is your situation, we’re here to assist you in any way we can, including taking care of the various tax obligations that must be met. Of course, a business must file a final income tax return and some other related forms for…
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CARES Act Made Changes to Excess Business Losses
The Coronavirus Aid, Relief and Economic Security (CARES) Act made changes to excess business losses. This includes some changes that are retroactive and there may be opportunities for some businesses to file amended tax returns. If you hold an interest in a business, or may do so in the future, here is more information about…
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File Cash Transaction Reports for Your Business — on Paper or Electronically
Does your business receive large amounts of cash or cash equivalents? You may be required to submit forms to the IRS to report these transactions. Filing requirements Each person engaged in a trade or business who, in the course of operating, receives more than $10,000 in cash in one transaction, or in two or more…
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The Possible Tax Consequences of PPP Loans
If your business was fortunate enough to get a Paycheck Protection Program (PPP) loan taken out in connection with the COVID-19 crisis, you should be aware of the potential tax implications. PPP basics The Coronavirus Aid, Relief and Economic Security (CARES) Act, which was enacted on March 27, 2020, is designed to provide financial assistance…
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Business Charitable Contribution Rules Have Changed Under the CARES Act
In light of the novel coronavirus (COVID-19) pandemic, many businesses are interested in donating to charity. In order to incentivize charitable giving, the Coronavirus Aid, Relief and Economic Security (CARES) Act made some liberalizations to the rules governing charitable deductions. Here are two changes that affect businesses: The limit on charitable deductions for corporations has…
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Fortunate Enough to Get a PPP loan? Forgiven Expenses Aren’t Deductible
The IRS has issued guidance clarifying that certain deductions aren’t allowed if a business has received a Paycheck Protection Program (PPP) loan. Specifically, an expense isn’t deductible if both: The payment of the expense results in forgiveness of a loan made under the PPP, and The income associated with the forgiveness is excluded from gross…
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IRS Releases 2021 Amounts for Health Savings Accounts
The IRS recently released the 2021 inflation-adjusted amounts for Health Savings Accounts (HSAs). HSA basics An HSA is a trust created or organized exclusively for the purpose of paying the “qualified medical expenses” of an “account beneficiary.” An HSA can only be established for the benefit of an “eligible individual” who is covered under a…
