Business owners rely on their accountant to file taxes, provide them with reliable financial advice, and guide them on how to grow and operate their business. Working with the right accountant can make a big difference in the economic well-being of your business.
The 2020 Presidential election has come and gone. We will likely have a new president. The coronavirus is still with us and is threatening to shut down significant parts of the country.
2020 has been a year of many unwelcome surprises for businesses throughout New Jersey. The initial forced business closures and stay-at-home orders created near panic requiring many to expand credit lines or seek loans to survive.
The end of the year is quickly approaching, but before we ring in the New Year, it’s important to reexamine our tax strategies. It’s an understatement to say that 2020 has been challenging and the economic and fiscal assumptions we relied upon this time last year have likely changed due to the COVID-19 crisis.
2020 has been a humbling year. More than any other year in recent history, we’ve learned that expectations can change on a dime. At the beginning of the year, the assumptions we held are likely far different from those we hold now, making year-end tax planning for businesses – regardless of size – more crucial than ever. As we head into 2021, ask yourself some of the following questions and see if you took full advantage of the available tax breaks or if your tax strategy needs adjusting.
The number of returns examined in the last ten years has declined due to budget and workforce cuts at the Internal Revenue Service (IRS). For the fiscal year 2019, an individual tax return had a 1 in 220 chance of being selected for audit. Ten years ago, it was a 1 in 90 event. The likelihood of being chosen drops to 1 in 466 if individual returns do not include a business or the earned income tax credit.
In a surprising turn of events this spring, the Financial Accounting Standards Board (FASB) pushed back the implementation deadline for nonpublic entities recognizing revenue under Accounting Standard Codification (ASC) 606. Nonpublic entities – both for-profit and not-for-profit – were initially expected to comply with the new revenue recognition standard on reports for fiscal years beginning after December 15, 2018.
In early August, the news reported attempts between Congress and the White House to deal with additional Coronavirus relief legislation. After several meetings between the two sides, it was clear no agreement would be reached, leaving many without critical unemployment and other financial benefits.
Service is at the center of any nonprofit organization, and to successfully serve their communities, nonprofits must have (1) staff members who have a deep passion for the mission, and (2) a steady stream of support.
The tax landscape has been in a constant state of flux since the onset of the COVID-19 Pandemic. The combination of restrictive stay at home orders and forced business closures have created immense financial stress on individuals and families.