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.
The COVID-19 pandemic has created challenging circumstances for many Princeton, Trenton, and New Jersey businesses. The combination of government orders, fear of virus transmission, and reopening guidelines have businesses looking for new paths to profitability under unexpected conditions. According to the New Jersey Economic Forecast, published by Rutgers Economic Advisory Service, 16.7% of the state’s total jobs were lost between February and May 2020.
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 COVID-19 pandemic has created several new challenges for Trenton and Princeton-area business and individual taxpayers. Over the past seven months, various state and local government orders have impacted how and when businesses can operate, including wearing facemasks and various other requirements for customers and employees.
On October 26, 2020, the IRS announced changes coming to various retirement plans for the tax year 2021. The cost-of-living adjustments will affect income limits for pension plans and other retirement accounts.
The COVID-19 pandemic has had numerous impacts on businesses, including decreased revenue, interruptions in supply chains, and having employees work from home. The pandemic has led business owners to pivot and change how they are operating. One item that may be of concern to some business owners, and often overlooked, is whether or not employees that live in a different state from where the business is located and working from home during the pandemic will cause nexus in different states.
The good news is that several updates and changes have been announced since the beginning of October. It started with the announcement that the Small Business Administration (SBA) has started approving forgiveness application and forwarding payments to banks. It was followed up by the issuance of a new “simpler” loan forgiveness application for borrowers with loans less than $50,000.
Today, we’re able to offer an update on that post: on September 17, 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-07, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. The finalized standard confirms the information we previously provided.
The PPP was created to encourage small businesses to keep their workforce employed during the government-declared emergency. The SBA began accepting PPP loan applications in early April, but the initial $349B of relief funds was claimed in less than two weeks.
An advance healthcare directive is a document that states a person’s choices about medical treatment and/or names someone who can make decisions about medical treatment for them if they are unable to make the decision themselves. The document is a healthcare power of attorney, living will, or some combination of the two.
