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.
When signed into law on December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was the most significant change to the U.S. tax code in more than 30 years. The goal was to simplify the tax code while making the United States corporate tax rate more competitive globally.
For months before the Presidential election, Congress debated another round of Coronavirus aid to help individuals, businesses, and government agencies affected by the pandemic.
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.
