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Business highlights in the new American Rescue Plan Act

2021 – 03/15 President Biden signed the $1.9 trillion American Rescue Plan Act (ARPA) on March 11. While the new law is best known for the provisions providing relief to individuals, there are also several tax breaks and financial benefits for businesses. Here are some of the tax highlights of the ARPA. The Employee Retention…

Contribute to an IRA

2021 – 03/15 There’s still time to reduce your 2020 tax bill if you’re eligible for a deductible traditional IRA. Taxpayers of all ages may be able to claim deductions on their 2020 tax returns for contributions to their IRAs made through April 15, 2021. This is true even if you file your tax return…

Qualified Dependent Care Assistance Program

2021 – 03/15 An employee benefit has been greatly expanded by the American Rescue Plan Act (ARPA), which was signed into law on March 11. Many employers maintain flexible spending cafeteria plans to help employees pay for dependent care while they work. Under a qualified dependent care assistance program (DCAP), certain amounts paid or incurred…

Stimulus 3.0

2021 – 03/12 On March 11, President Biden signed the American Rescue Plan Act into law. It provides an income tax credit that will be paid in advance (in direct deposit or paper checks) to eligible individuals. Individuals will receive $1,400 ($2,800 for eligible joint return filers) plus $1,400 for each eligible dependent. The credit…

Employee Retention Credit Extended

2021 – 03/12 The American Rescue Plan Act (ARPA), which was signed into law on March 11, extends the Employee Retention Credit from June 30 until Dec. 31, 2021. The law continues the rate of the credit at 70% for this extended time period. It also continues to allow for up to $10,000 in qualified…

Deferred Employee Payroll Taxes

2021 – 03/12 The IRS has issued a Tax Tip that provides instructions to employers on how to pay any employee payroll taxes that the employer deferred in 2020 as a result of a 2020 executive action from then-President Trump. The optional deferral applied to employees with less than $4,000 in wages every two weeks,…

Child Tax Credit Expanded

2021 – 03/11 Under the newly passed American Rescue Plan Act (ARPA), the Child Tax Credit (CTC) has expanded for 2021 for eligible taxpayers. Before the ARPA, the CTC was $2,000 per “qualifying child.” A qualifying child was defined as a child under age 17, whom the taxpayer could claim as a dependent. For 2021,…

Economic Injury Disaster Loan

2021 – 03/11 Even though the provisions of the newly passed American Rescue Plan Act (ARPA) lean heavily toward individuals, there are several key provisions for businesses. For example, the ARPA introduces targeted Economic Injury Disaster Loan (EIDL) grants from the Small Business Administration (SBA). The loan grants are available for eligible small businesses, and…

Excluding Unemployment from Gross Income

2021 – 03/11 For tax purposes, unemployment compensation (UC) generally is included in gross income. Under the American Rescue Plan Act (ARPA), for tax years beginning in 2020, taxpayers with adjusted gross income (AGI) under $150,000 may exclude UC of up to $10,200. The $150,000 AGI limit applies for single filers, heads of household and…

5 ways to streamline and energize your sales process

2021 – 03/10 The U.S. economy is still a far cry from where it was before the COVID-19 pandemic hit about a year ago. Nonetheless, as vaccination efforts continue to ramp up, many experts expect stronger jobs growth and more robust economic activity in the months ahead. No matter what your business does, you don’t…

American Rescue Plan

2021 – 03/08 On March 6, the $1.9 trillion American Rescue Plan was passed by the U.S. Senate by a 50-49 party-line vote. The bill now heads back to the U.S. House of Representatives for a final vote and if it passes, it goes to President Biden to sign into law. Among the many provisions…

Launching a small business? Here are some tax considerations

2021 – 03/08 While many businesses have been forced to close due to the COVID-19 pandemic, some entrepreneurs have started new small businesses. Many of these people start out operating as sole proprietors. Here are some tax rules and considerations involved in operating with that entity. The pass-through deduction To the extent your business generates…

PPP adjusted to prioritize very small businesses

2021 – 03/03 When the Small Business Administration (SBA) launched the Paycheck Protection Program (PPP) last year, the program’s stated objective was “to provide a direct incentive for small businesses to keep their workers on the payroll.” However, according to federal officials, the recently issued second round of funding has distributed only a small percentage…

Employee Retention Tax Credit

2021 – 03/03  In Notice 2021-20, the IRS provides guidance on claiming the employee retention tax credit for calendar quarters in 2020. The guidance clarifies details about the credit and describes retroactive changes made under a law enacted recently. Among other things, the guidance explains whether an employer that received a Paycheck Protection Program loan…

Standard vs Itemized Deduction

2021 – 03/02 When filing your tax return, is it better to take the standard deduction or claim itemized deductions? It depends. The standard deduction changes yearly and is based on filing status and age. Itemizing requires more calculations but can save taxes if the total deductions exceed the standard deduction. Those most likely to…

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