New law doubles business meal deductions and makes favorable PPP loan changes
The COVID-19 relief bill, signed into law on December 27, 2020, contains numerous favorable tax breaks for businesses. For example, the new law includes a provision that removes the 50% limit on deducting business meals provided by restaurants and makes those meals 100% deductible. This rule applies to expenses paid or incurred in calendar years 2021 and 2022. The law also authorizes more money towards the Paycheck Protection Program (PPP) and extends it to March 31, 2021. In addition, it provides for the deductibility of PPP expenses paid with the loan proceeds. These are just a couple of the business-related provisions in the new law. Contact us if you have questions about your situation.
Your taxpayer filing status: You may be eligible to use more than one
For tax purposes, Dec. 31 is more than just New Year’s Eve. It will affect the filing status box that will be checked on your tax return. When filing a return, you do so with one of 5 tax filing statuses. The box checked on your return generally depends in part on whether you’re unmarried or married on Dec. 31. Here are the statuses: Single, married filing jointly, married filing separately, head of household and qualifying widow(er) with a dependent child. Head of household status can be more favorable than filing as a single person, but special rules apply. You must generally be unmarried, have a qualifying child (or dependent) and meet certain rules involving “maintaining a household.”
The right entity choice: Should you convert from a C to an S corporation?
The best choice of entity can affect your business in several ways, including the amount of your tax bill. Although S corporations can provide substantial tax advantages over C corporations in some cases, there are potential tax problems to assess before deciding to convert from C to S status. One issue to consider is last-in, first-out (LIFO) inventory. A C corporation that uses LIFO inventory must pay tax on the benefits it derived by using LIFO if it converts to an S corporation. Other issues to consider are the built-in gains tax, passive income tax and unused net operating losses. Contact us if you’re interested in an entity change. We’ll explain your options and the tax implications.
Prevent and detect insider cyberattacks
Dishonest workers can initiate a cyberattack by stealing valuable information from your company’s computer network and using it for personal gain. They could be working for a competitor, seeking revenge for perceived wrongs or they may need money to pay gambling debts. You can prevent insider cybercrime by monitoring IT use, removing network access as soon as an employee is terminated and always treating workers fairly. And don’t neglect to protect physical assets such as paper records and computer hardware. Restricting your office’s Wi-Fi to those with special passwords is also a good idea. Contact us with questions.
The President’s action to defer payroll taxes: What does it mean for your business?
President Trump has signed a Presidential Memorandum to defer the employee portion of Social Security taxes for some people. The action only defers the taxes, which means they must be paid in the future. However, the action directs the U.S. Treasury Secretary to explore ways to eliminate the obligation to pay the taxes deferred. Employers have questions and concerns. For example, will employers have to withhold more taxes from employees’ paychecks in the future to pay the taxes back? Without a law to forgive the taxes, will employers be liable to pay them? What if employers can’t change their software by the Sept. 1 start of the deferral? Is the deferral required? Contact us with questions.
New COVID – 19 Relief Bill Now Signed into Law by the President
Includes New PPP Funding for Previous PPP Recipients that Qualify New Simplified PPP Forgiveness Application for up to $150K Loans After much discussion regarding various elements of the bill (including the dollar amount of stimulus payments and various funding initiatives mainly in the omnibus spending portion of the bill) President Trump did eventually sign the […]
Manufacturing faces talent problem heading into a crucial 2021
As manufacturing continues to lead both in statewide and nationwide economic recovery, the sector will still need to address a chronic issue that has only worsened throughout the COVID-19 pandemic. Talent shortages continue to dog manufacturers across Michigan as many companies have not been subtle about their desperate need for more workers. “We have employers […]
Post-pandemic supply chain shifts could boost state’s industrial economy
Michigan’s economy could stand to benefit in the years ahead as manufacturers move to reshore work to the U.S. after dealing with severe disruptions in their foreign supply chains when the coronavirus first surfaced in China. Reshoring industrial supply chains from overseas marks one opportunity that West Michigan has in 2021 and the years ahead, […]
How COVID-19 Will Alter the Evolution of Student Housing
The economic impact of the COVID-19 pandemic continues to unfold globally, shifting the way we conduct business and go about our day-to-day lives. Across all sectors of commercial real estate, we’ve seen a lot of change, from sanitation measures to limited in-person interactions and occupancy.
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