4Thought Blog

Remote work has become more common in recent years, and the COVID-19 pandemic has resulted in employers realizing that many jobs can be done from home.

Some remote workers even work in a different state than where their employers are based. These employees may have opted to move to states with lower or no income taxes, but they — and other remote employees now working across state lines — may find themselves shouldering unexpected state income tax liabilities.

Over the last year, consumer prices rose 7.9%, according to the latest data from the U.S. Bureau of Labor Statistics. The Consumer Price Index covers the prices of food, clothing, shelter, fuels, transportation, doctors' and dentists' services, drugs, and other goods and services that people buy for day-to-day living. This is the highest 12-month increase since 1982.

Increases in the price of consumer goods will affect most businesses, sooner or later. For example, if you operate a restaurant, spikes in food prices directly affect you. If you operate a fleet of delivery vehicles, you're already feeling the effect of rising gas prices. And manufacturers have been hit with higher energy, commodity and shipping costs.

First-year bonus depreciation typically creates a powerful tax incentive for eligible manufacturers to purchase qualified property needed for business reasons. These tax write-offs can benefit a manufacturer's cash flow, but claiming them isn't always the best decision.

In some cases, there are advantages to following the regular depreciation rules. However, if your manufacturing company wants to take full advantage of the bonus depreciation, this is the year to do so.

Running a successful construction company calls for more than just winning bids and doing great work.

To get ahead and make money, you need to carefully track your costs and accurately calculate how much to charge to turn a profit. To this end, there are three numbers that every construction business owner should know, review and update.

If you own a small or medium-sized business, it may be eligible for some significant tax breaks that aren't available for larger entities.

Here are three examples to consider as you file your tax return for 2021 and plan for 2022.

The National Restaurant Association is urging the IRS to release crucial Employee Retention Credits to the pandemic-stricken industry.

Many restaurants that applied for ERC have not received the federal funds. A recent poll found 83 percent of operators who applied for the tax credit over six months ago still have not received any funds.

“The ERC has been a critical recovery tool for hundreds of thousands of restaurants, but far too many are still waiting for their refund from the federal government,” said Sean Kennedy, executive vice president for Public Affairs at the National Restaurant Association.

Suppose the founder or long-time executive director of your nonprofit organization is scaling back on her workload and making plans to retire. What will her departure mean for your organization?

If your nonprofit has a well-crafted succession plan, it's likely to survive any leadership transition. But if you don't have a plan, your organization could endure a rocky period, and possibly close.

Even if your top leader intends to remain in the job for years, illness or another unanticipated event could disrupt plans. For these reasons, every nonprofit needs a formal succession plan.

There are new tax filing requirements for many pass-through businesses for this tax season.

For tax years beginning in 2021, S corporations and partnerships must file Schedule K-2 and Schedule K-3 if the business has relevant international tax items.

The new schedules are intended to provide more transparency and clarity for the owners of pass-through businesses regarding how to calculate their U.S. income tax liability from relevant international items. The IRS designed these specific schedules to replace the current Schedule K-1 reporting for these items so that the information provided to owners is delivered in a standard format with an additional level of detail.

In the fourth quarter of 2021, CEO resignations were up 16% over the prior year, according to executive outplacement firm Challenger, Gray & Christmas. Recent and announced high profile departures include Twitter's Jack Dorsey, Amazon's Jeff Bezos and American Airlines' Doug Parker.

This trend is expected to continue into 2022 as executives swap high-stress positions for more family time. Would your business survive if its CEO or founder suddenly jumped ship?

Large public companies often have deep management structures and succession plans in place. So, they can usually recover from the loss of a C-level executive over time, except in rare instances.

It's more common for smaller businesses to depend heavily on a key person — and the actual, or even the potential, loss of that individual is likely to have a major impact on value. Key person discounts are applied to reflect the reduction in a company's value resulting from such a loss.

While all signs point to the fact that, given the current makeup of the House and Senate, the Build Back Better bill on the table last fall is essentially lifeless, some of the policies contained in the bill may be back in play in 2022.

A possible alternative path for some of the policies contained in the BBB bill is inclusion in smaller, more targeted pieces of legislation. (For prior coverage, see BDO’s alert “The Build Back Better Act in a Legislative Lull”). Whether or not some or all of the tax policies in the BBB bill are revived this year, Congress will nonetheless need to address what has become an almost annual ritual – passing tax extenders legislation.