Small Business Tax Briefs Archives - Page 26 of 37

In IRS Tax Tip 2020-80, the IRS explained new Form 1099-NEC, Nonemployee Compensation for business taxpayers who pay or receive nonemployee compensation. Starting in tax year 2020, payers must complete this form to report any payment of $600 or more to a payee. Generally, payers must file Form 1099-NEC by January 31. For 2020 tax returns, the due date is February 1, 2021. There is no automatic 30-day extension to file Form 1099-NEC. However, an extension to file may be available under certain hardship conditions. Nonemployee compensation may be subject to backup withholding if a payee has not provided a taxpayer identification number to the payer or the IRS notifies the payer that the TIN provided was incorrect PDF. A TIN can be one of the following numbers: Social Security Employer identification Individual...

12 Jan 2021

SBA Releases Top Line Overview of First and Second Draw PPP Loans

SBA Releases Top Line Overview of First and Second Draw PPP Loans

In a Treasury Department Press Release dated 1/8/2021, the Treasury Department and Small Business Administration (SBA) have announced that the Paycheck Protection Program (PPP) will reopen the week of January 11. To promote access to capital: initially, only community financial institutions will be able to make First Draw PPP Loans on 1/11/2021, and Second Draw PPP Loans on 1/13/2021. All participating lenders will be able to participate in the PPP shortly thereafter. Interim Final Rules The SBA and Treasury Department recently released Interim Final Rules and other guidance. See the following related posts: SBA Releases Guidance on PPP Extension and Expansion SBA Releases Interim Final Rules Regarding PPP Second Draw Loans Additional Guidance: Top-Line Overviews The SBA also released a Top-line Overview of First Draw PPP and a Top-line Overview of Second Draw PPP. The Top-line Overview...

11 Jan 2021

SBA Releases Interim Final Rules Regarding PPP Second Draw Loans

SBA Releases Interim Final Rules Regarding PPP Second Draws Loans

The Treasury Department and Small Business Administration (SBA) have released Interim Final Rules (IFR) regarding the permission of "second draw loans" under the Paycheck Protection Program (PPP) recently authorized by the Consolidated Appropriations Act, 2021 (CAA 2021). BACKGROUND CARES Act The CARES Act provided the original legislation authorizing the Small Business Administration (SBA) to make loans to qualified businesses under certain circumstances. The provision established the Payroll Protection Program (PPP), which provides up to 24 weeks of cash-flow assistance through 100% federally guaranteed loans to eligible recipients for the purpose of maintaining payroll during the coronavirus (COVID-19) pandemic and to cover certain other expenses. Paycheck Protection Program Flexibility (PPPF) Act The Paycheck Protection Program Flexibility (PPPF) Act made significant modifications to the PPP, including: reducing the percentage of loan proceeds...

10 Jan 2021

SBA Releases Guidance on PPP Extension and Expansion

SBA Releases Guidance on PPP Extension and Expansion

The Treasury Department and Small Business Administration (SBA) have released Interim Final Rules (IFR) regarding the recent extension and expansion of the Paycheck Protection Program (PPP) as authorized by the Consolidated Appropriations Act, 2021 (CAA 2021). BACKGROUND CARES Act The CARES Act provided the original legislation authorizing the Small Business Administration (SBA) to make loans to qualified businesses under certain circumstances. The provision established the Payroll Protection Program (PPP), which provides up to 24 weeks of cash-flow assistance through 100% federally guaranteed loans to eligible recipients for the purpose of maintaining payroll during the coronavirus (COVID-19) pandemic and to cover certain other expenses. Paycheck Protection Program Flexibility (PPPF) Act The Paycheck Protection Program Flexibility (PPPF) Act made significant modifications to the PPP, including: reducing the percentage of loan proceeds require...

09 Jan 2021

Temporary Relief for Employers Using Automobile Lease Valuation Rule

Temporary Relief for Employers Using Automobile Lease Valuation Rule

In response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic, IRS Notice 2021-07 provides temporary relief for employers and employees using the automobile lease valuation rule to determine the value of an employee’s personal use of an employer provided automobile for purposes of income inclusion, employment tax, and reporting. Due solely to the COVID-19 pandemic, if certain requirements are satisfied, employers and employees that are using the automobile lease valuation rule may instead use the vehicle cents-per-mile valuation rule to determine the value of an employee’s personal use of an employer-provided automobile beginning as of March 13, 2020. For 2021, employers and employees may revert to the automobile lease valuation rule or continue using the vehicle cents-per-mile valuation rule provided certain requirements are met. GRANT OF RELIEF Due to...

06 Jan 2021

CAA Doubles Meal Deductions and Makes Favorable PPP Loan Changes

CAA Doubles Meal Deductions and Makes Favorable PPP Loan Changes

The COVID-19 relief bill, signed into law on December 27, 2020, provides a further response from the federal government to the pandemic. It also contains numerous tax breaks for businesses. Here are some highlights of the Consolidated Appropriations Act of 2021 (CAA), which also includes other laws within it. Business meal deduction increased The new law includes a provision that removes the 50% limit on deducting business meals provided by restaurants and makes those meals fully deductible. As background, ordinary and necessary food and beverage expenses that are incurred while operating your business are generally deductible. However, for 2020 and earlier years, the deduction is limited to 50% of the allowable expenses. The new legislation adds an exception to the 50% limit for expenses of food or beverages provided by...

31 Dec 2020

Business Meals Provided by Restaurants Deductible in 2021-2022

Business Meals Provided by Restaurants Deductible in 2021-2022

The recent stimulus legislation, the Consolidated Appropriations Act of 2021, (CAA 2021) included a provision that removes the 50% limit on deducting business meals provided by restaurants in 2021 and 2022 and makes those meals fully deductible. Here are the details. In general, the ordinary and necessary food and beverage expenses of operating your business are deductible. However, the deduction is limited to 50% of the otherwise allowable expense. The new legislation adds an exception to the 50% limit for expenses for food or beverages provided by a restaurant. This rule applies to expenses paid or incurred in calendar years 2021 and 2022. The use of the word "by" (rather than "in") a restaurant makes it clear that the new rule isn't limited to meals eaten on the...

28 Dec 2020

Cash in on Depreciation Tax Savers

As we approach the end of the year, it’s a good time to think about whether your business needs to buy business equipment and other depreciable property. If so, you can cash in on depreciation tax savers such as §179 for business property. The election provides a tax windfall to businesses, enabling them to claim immediate deductions for qualified assets, instead of taking depreciation deductions over time. Even better, the §179 deduction isn’t the only avenue for immediate tax write-offs for qualified assets. Under the 100% bonus depreciation tax break, the entire cost of eligible assets placed in service in 2020 can be written off this year. But to benefit for this tax year, you need to buy and place qualifying assets in service by December 31. What qualifies? The §179...

28 Dec 2020

Tax Breaks When Buying a Heavy SUV for Business