4Thought Blog

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The New Guidance on the Changed Employee Retention Credit Rules

Posted by Concannon Miller on Thu, Jan 20, 2022

Sometimes, Uncle Sam seems to give with one hand and take with the other. Take the employee retention credit (ERC), for example.

Congress created this tax break in 2020 to help businesses continue to pay their workers following the onset of the COVID-19 pandemic. Then legislators extended the credit, with enhancements, through 2021. However, the new infrastructure act repeals the ERC for the final quarter of 2021.

Fortunately, the IRS has released new guidance to help employers make sense of the repeal. Specifically, Notice 2021-65 explains how the retroactive tax law change applies to employers that have based their deposits on the old law.

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Topics: Business tax planning, COVID-19

Federal Government Warns of Tax Return, Refund Delays for 2022

Posted by Concannon Miller on Tue, Jan 18, 2022

U.S. Treasury officials last week warned of expected significant delays in processing tax returns and refunds for the 2022 season.

The IRS is still dealing with backups in processing returns from the past two filing seasons and the continuing pandemic is causing staff shortages, officials said. Normally at the start of tax season the IRS has about 1 million items in its backlog but the current backlog totals more than 6 million items, officials said.

The IRS is urging taxpayers to file electronically and request direct deposit – instead of a mailed check – for quicker turnaround.

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Topics: Business tax planning, Individual tax planning

4 Big Charitable Tax Breaks for Businesses, Individuals to use in 2021

Posted by Concannon Miller on Tue, Nov 23, 2021

Are you feeling generous? Qualified charitable contributions can be rewarded with sizeable tax breaks during the second calendar year of the COVID-19 pandemic.

Recent legislation includes the following four temporary tax law changes that are designed to help individuals and businesses that donate to charities through the end of 2021.

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Topics: Business tax planning, Individual tax planning

New Law Cuts off Beneficial Employee Retention Credit

Posted by Concannon Miller on Tue, Nov 16, 2021

A new law has retroactively ended the Employee Retention Credit to apply only through September 30, 2021 (rather than through December 31, 2021) — unless the employer is a recovery startup business.

The Infrastructure Investment and Jobs Act, signed into law Nov. 15, only has a handful of tax provisions but this one is significant for some businesses.

As a result of the retroactive termination of the ERC, some employers may need to review their payroll tax compliance (including tax deposits) to make sure that it conforms with the changes.

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Topics: Business tax planning, COVID-19

How Fast Can You Write off a Business Vehicle? Learn the Rules

Posted by Concannon Miller on Thu, Nov 11, 2021

The federal income tax rules for depreciating vehicles used for business are complicated. And different rules apply to different categories of vehicles.

Special limitations apply to vehicles that are classified as passenger autos, including many pickups and SUVs. As a result of these limitations, depreciating an expensive vehicle may take longer than you'd expect.

Here's what you need to know about depreciation write-offs for vehicles used for business purposes.

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Topics: Business tax planning

5 Year-End Tax Planning Tips for Businesses for 2021

Posted by Concannon Miller on Tue, Oct 26, 2021

You still have time to significantly reduce this year's business federal income tax bill even with all the uncertainty about proposed tax law changes. Here are five possible moves to consider — but stay tuned for developments.

Congress is currently considering some major tax changes. If approved, it's unclear when they will all take effect.

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Topics: Business tax planning

Separating Real Estate Assets from Your Business: Learn the Tax Benefits

Posted by Concannon Miller on Tue, Oct 19, 2021

Many companies choose not to combine real estate and other assets into a single entity.

Perhaps the business fears liability for injuries suffered on the property. Or legal liabilities encountered by the company could affect property ownership.

But there are valid and potentially beneficial tax reasons for holding real estate in a separate entity as well.

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Topics: Business tax planning

Offering New Benefits to Attract Employees? Watch for Tax Consequences

Posted by Concannon Miller on Thu, Oct 14, 2021

Although some companies that sent workers home during the pandemic have returned them to the office, many businesses continue to rely on remote workers. At the same time, companies in a range of industries are struggling to find and keep employees.

This unusual business environment has spawned some innovative fringe benefits — or expanded traditional offerings — from counseling to pizza deliveries to birthday gifts. What are the tax consequences of offering them? It depends.

"Fringe benefit" typically is used to describe services, property or some other item of value an employer provides its employees. Normally, a fringe benefit constitutes taxable income to the recipient unless a statutory exclusion applies. For some employees, the special tax-exempt perks are the real fringe benefits.

The list of statutory exclusions in the tax code includes common benefits, such as health insurance and retirement plan matching contributions. But other less-known benefits may fit your company's current needs. Here are eight to consider — and their potential tax treatment:

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Topics: Business tax planning, Business consulting

Biden To Seek Tax Changes on High Earners, Capital Gains, Some Businesses

Posted by Tony Deutsch on Thu, Jun 24, 2021

The Biden Administration recently released detailed tax proposals through the so-called Green Book. If approved, there would be big changes for high-income earners, on capital gains and for some business taxes.

While these proposals would all have to go through the legislative process and therefore may not pass or may be changed, it’s possible some of these may become law and therefore warrant tax planning considerations.

Even if Biden’s proposals don’t become law, there are some automatic taxes changes coming down the road as tax changes in President Trump’s Tax Cuts and Jobs Act only run through 2026. While five years feels like a long time, it’s not when it comes to tax planning.

Here’s what the Biden administration has proposed:

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Topics: Business tax planning, Individual tax planning

C Corp, S Corp or Partnership? Which Entity is Right for Your Business?

Posted by Randy Schwartzman on Thu, May 27, 2021

The choice of entity is among the most important decisions facing taxpayers when starting a business or investment activity.

The choice of tax entity generally includes a C corporation, S corporation or partnership, each having its own advantages and disadvantages that must be evaluated in terms of how the entity’s tax and legal characteristics align with the goals of the business and its investors.

Existing businesses should also evaluate their choice of entity—especially now, in light of President Biden’s proposals to increase the tax burden on corporations and high-wealth individuals. Depending on the circumstances, it may make sense to consider converting an existing entity to a different type of tax entity or structure in order for businesses and their owners to better manage their overall tax obligations.

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Topics: Business tax planning

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