Small business owners in Michigan can now apply for the State’s Covid-19 Safety Grant Program. Totaling $2M, these grants will provide Michigan businesses with less than 250 employees, including eligible childcare centers, matchings funds of up to $10,000 to decrease the risk of Covid-19 spread through safety and health-related equipment purchased and training. Applications are Read More »
The IRS recently released guidance providing the 2022 inflation-adjusted amounts for Health Savings Accounts (HSAs). Fundamentals of HSAs An HSA is a trust created or organized exclusively for the purpose of paying the “qualified medical expenses” of an “account beneficiary.” An HSA can only be established for the benefit of an “eligible individual” who is Read More »
The Michigan Department of Treasury reminds current and former military members of various individual income tax and property tax benefits they may be entitled to receive from the state. (News release, Mich. Dept. Treas., 05/20/2021.) Benefits available. Current and former military members may be eligible to receive the following benefits: Military pay tax exemption. Military pay is Read More »
Many businesses use independent contractors to help keep their costs down. If you’re among them, make sure that these workers are properly classified for federal tax purposes. If the IRS reclassifies them as employees, it can be a costly error. It can be complex to determine whether a worker is an independent contractor or an Read More »
The credit is intended primarily for business users of alternative energy (other energy tax breaks apply if you use alternative energy in your home or produce energy for sale). Eligible property The business energy credit equals 30% of the basis of the following: Equipment, the construction of which begins before 2024, that uses solar energy Read More »
Owners of incorporated businesses know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Thus, if funds are paid as dividends, they’re taxed twice, once to the Read More »
DOWNLOAD PDF: Q1 2021 Michiana Benchmark Business Index by Kruggel Lawton The first quarter 2021 Michiana Benchmark Business Index, compiled by the certified public accounting and consulting firm of Kruggel Lawton CPAs, surged in the first quarter of the year to the second-highest score in the more than ten years since the survey began. The Read More »
Are you thinking about setting up a retirement plan for yourself and your employees, but you’re worried about the financial commitment and administrative burdens involved in providing a traditional pension plan? Two options to consider are a “simplified employee pension” (SEP) or a “savings incentive match plan for employees” (SIMPLE). SEPs are intended as an Read More »
As a business owner, you should be aware that you can save family income and payroll taxes by putting your child on the payroll. Here are some considerations. Shifting business earnings You can turn some of your high-taxed income into tax-free or low-taxed income by shifting some business earnings to a child as wages for Read More »
Are you considering buying or replacing a vehicle that you’ll use in your business? If you choose a sport utility vehicle (SUV), you may be able to benefit from lucrative tax rules for those vehicles. Bonus depreciation Under current law, 100% first-year bonus depreciation is available for qualified new and used property that’s acquired and Read More »
The IRS has announced that the federal income tax filing deadline for individuals for the 2020 tax year is extended from April 15, 2021, until Monday, May 17, 2021. However, as of March 22, there remain meaningful reasons why individual taxpayers should still work to complete and file their returns by April 15, 2021. This Read More »
No one needs to tell nonprofit organizations how tough the past year has been. According to the John Hopkins Center for Civil Society Studies, 7.7% of not-for-profit workers — nearly one million people — lost their jobs between February 2020 and January 2021. An even higher percentage of arts and education organizations lost jobs last Read More »
President Biden signed the $1.9 trillion American Rescue Plan Act (ARPA) on March 11. While the new law is best known for the provisions providing relief to individuals, there are also several tax breaks and financial benefits for businesses. Here are some of the tax highlights of the ARPA. The Employee Retention Credit (ERC). This Read More »
During the COVID-19 pandemic, many people are working from home. If you’re self-employed and run your business from your home or perform certain functions there, you might be able to claim deductions for home office expenses against your business income. There are two methods for claiming this tax break: the actual expenses method and the Read More »
Merger and acquisition activity in many industries slowed during 2020 due to COVID-19. But analysts expect it to improve in 2021 as the country comes out of the pandemic. If you are considering buying or selling another business, it’s important to understand the tax implications. Under current tax law, a transaction can basically be structured Read More »
Many organizations get stuck in procedural ruts because it’s easier in the short term to continue doing things the way they’ve always been done. But it generally pays to regularly review your not-for-profit’s accounting function for inefficiencies and oversight gaps. You might plan to conduct a review once a year or perform an assessment whenever Read More »
A number of tax-related limits that affect businesses are annually indexed for inflation, and many have increased for 2021. Some stayed the same due to low inflation. And the deduction for business meals has doubled for this year after a new law was enacted at the end of 2020. Here’s a rundown of those that Read More »
Are you considering replacing a car that you’re using in your business? There are several tax implications to keep in mind. A cap on deductions Cars are subject to more restrictive tax depreciation rules than those that apply to other depreciable assets. Under so-called “luxury auto” rules, depreciation deductions are artificially “capped.” So is the Read More »
Holiday-inspired generosity and the desire to reduce tax liability makes the end of the year a busy time for charitable giving. According to Network for Good and other sources, approximately 30% of charitable gifts are made in December alone. For nonprofits, an important part of processing these donations is sending thank-you letters that acknowledge Read More »
Does anyone actually read footnotes? If they’re financial statement footnotes, the answer is usually “yes.” Footnotes can provide donors, governmental supporters and other stakeholders with critical information about your not-for-profit. So it’s important to work with your CPA to make sure your footnotes are accurate and thorough. Operations and accounting policy snapshot One important Read More »
First and foremost, we want you to know that the staff and leadership of Kruggel Lawton offer our most sincere condolences to you and your family following the death of your loved one. Death is an emotional and troubling reality, and navigating the complicated and often overwhelming landscape of tax requirements after someone dies can Read More »
If your small business is planning for payroll next year, be aware that the “Social Security Wage Base” is increasing. The Social Security Administration recently announced that the maximum earnings subject to Social Security tax will increase from $137,700 in 2020 to $142,800 in 2021. For 2021, the FICA tax rate for both employers Read More »
Michiana Benchmark Business Index (BBI), is produced by the certified public accounting and consulting firm of Kruggel Lawton CPAs using data independently collected from CFOs and senior-level financial officers of major businesses and corporations in Indiana and Michigan. The third quarter 2020 Michiana Benchmark Business Index (BBI) improved after dropping to historically low levels in Read More »
Are you wondering if the passive activity loss rules affect business ventures you’re engaged in — or might engage in? If the ventures are passive activities, the passive activity loss rules prevent you from deducting expenses that are generated by them in excess of their income. You can’t deduct the excess expenses (losses) against Read More »
DOWNLOAD GUIDE CPA from a Forbes “America’s Best Tax Firms” answers your top questions about PPP Loan Forgiveness. In spring 2020, no one could have estimated the effect COVID19 would have on our economy and our communities. It quickly became apparent that Congress would have to act fast to provide some Read More »
Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2020. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. Read More »
This information was provided directly by The Indiana Department of Revenue as an Agency Announcement. DOR urges Hoosiers to take immediate action to avoid additional penalties and interest. The Indiana Department of Revenue (DOR) is starting to send tax bills that were delayed earlier this year due to tax filing and payment extensions related to Read More »
For a high-net-worth individual or a closely-held business owner or entrepreneur, the desire to fly privately rather than via commercial airline has its advantages. The ability to travel on short notice and to remote destinations that are not serviced by major airports, while at the same time mitigating security concerns and experiencing unparalleled privacy, Read More »
The CARES Act, an economic stimulus bill passed in March in response to the impacts of COVID-19, includes $175 billion in relief funds for hospitals and healthcare providers that have been financially affected by the coronavirus outbreak. Eligible recipients include dental providers with a valid Taxpayer Identification Number (TIN), and all interested dental providers Read More »
The Coronavirus Aid, Relief and Economic Security (CARES) Act made changes to excess business losses. This includes some changes that are retroactive and there may be opportunities for some businesses to file amended tax returns. If you hold an interest in a business, or may do so in the future, here is more information Read More »
Due to a COVID19-related backlog at the IRS, some taxpayers’ checks may still be unopened. You may find that the IRS has not given you credit for payments made on time, even well before the deadline. Do not be alarmed. The IRS will post these checks on the date received rather than the date the Read More »
If your business was fortunate enough to get a Paycheck Protection Program (PPP) loan taken out in connection with the COVID-19 crisis, you should be aware of the potential tax implications. PPP basics The Coronavirus Aid, Relief and Economic Security (CARES) Act, which was enacted on March 27, 2020, is designed to provide financial Read More »
If you’re a partner in a business, you may have come across a situation that gave you pause. In a given year, you may be taxed on more partnership income than was distributed to you from the partnership in which you’re a partner. Why is this? The answer lies in the way partnerships and Read More »
Michiana Benchmark Business Index (BBI), is produced by the certified public accounting and consulting firm of Kruggel Lawton CPAs using data independently collected from CFOs and senior-level financial officers of major businesses and corporations in Indiana and Michigan. In the second quarter of 2020, the overall BBI recovered slightly after a precipitous drop in the Read More »
Last week, the Federal Reserve announced that not-for-profit organizations now may apply for loans under the $600 billion Main Street Lending Program. Previously open only to for-profit businesses with more than 100 employees, the program offers low-interest loans with relatively relaxed repayment terms. If your organization needs funding to keep operating during this difficult period, Read More »
There’s a new IRS form for business taxpayers that pay or receive nonemployee compensation. Beginning with tax year 2020, payers must complete Form 1099-NEC, Nonemployee Compensation, to report any payment of $600 or more to a payee. Why the new form? Prior to 2020, Form 1099-MISC was filed to report payments totaling at least $600 Read More »
On Friday, June 5, 2020, President Trump signed the Paycheck Protection Program Flexibility Act into law. The bill makes the following changes to the Paycheck Protection Program (PPP): Extends the PPP loan “covered period” from 8 weeks after loan origination to the earlier of 24 weeks after loan origination or December 31, 2020 (and borrowers Read More »
Summary The FASB issued ASU 2020-051(“ASU”) to provide a one-year deferral of the effective dates of: ASC 842, Leases, for all private companies and certain not-for-profit entities ASC 606, Revenue from Contracts with Customers, for all privately-held entities that have not yet issued financial statements or made financial statements available. Background The FASB has received Read More »
On April 30, the IRS issued Notice 2020-32 providing guidance regarding the deductibility for federal income tax purposes of certain otherwise deductible expenses incurred in a taxpayer’s trade or business when the taxpayer receives a loan (covered loan) pursuant to the Paycheck Protection Program (PPP). The PPP was established by Section 1102 of the Coronavirus Read More »
The IRS has issued frequently asked questions (FAQs) on the payroll tax deferral opportunity provided by the Coronavirus, Aid, Relief, and Economic Security (CARES) Act (Public Law 116-136). Under that provision, employers of all sizes (including tax exempt/non-profit employers) can defer the deposit and payment of the employer’s share of Social Security taxes. Self-employed individuals Read More »
The first quarter 2020 Michiana Benchmark Business Index (BBI), compiled by the certified public accounting and consulting firm of Kruggel Lawton CPAs, declined sharply, falling to its lowest level since the survey began ten years ago. The overall first quarter BBI was 40.94 out of a maximum possible score of 100. Kruggel Lawton conducts this Read More »
Much has been written about how the CARES Act and Families First Coronavirus Response Act (FFCRA) will help businesses. Nonprofit organizations are included in those relief efforts. We’ve shared some high level insights into how nonprofits can benefit. CARES Act Delay of payroll tax remittance Employee retention credit Paycheck Protection Program (PPP) Economic Injury Disaster Read More »
The recently passed CARES Act creates a specific loan program through the Small Business Administration to help small businesses retain employees and pay critical expenses in this challenging time. Under the Paycheck Protection Program (PPP), the SBA’s current 7(a) loan guaranty program is expanded and modified to provide up to $349 billion of federally guaranteed Read More »
As of 12:00 p.m. 3/30/2020 The Internal Revenue Service (IRS) has extended the federal income tax payment AND filing deadline to July 15, 2020, as part of a growing effort to stem the financial pain from the coronavirus pandemic. All taxpayers and businesses will have this additional time to file and make payments without interest Read More »
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act, which provides relief to taxpayers affected by the novel coronavirus (COVID-19). The CARES Act is the third round of federal government aid related to COVID-19. We have summarized the top provisions in the new legislation below, with Read More »
The Families First Coronavirus Response Act (FFCRA) became law on March 18, 2020. Among other things, the Act requires employers with “fewer than 500 employees” to provide two new benefits: (1) federal emergency paid sick leave and (2) federal emergency paid family and medical leave (FMLA). Here we will address some of the major requirements Read More »
Businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick and childcare leave through December 31, 2020, under the Families First Coronavirus Response Act (FFCRA), can claim a refundable federal tax credit to recover 100% of those payments. The IRS also said that the cost of providing such Read More »
On March 20, 2020, the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This Read More »
The U.S. Small Business Administration (SBA) is offering low-interest federal disaster loans for working capital (up to $2 million) to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Economic Injury Disaster Loans (EIDL) are available statewide in Indiana, Michigan, and Tennessee to small businesses and private, non-profit organizations to help Read More »
Employers are scrambling to find ways to help their employees who are impacted by the novel coronavirus (COVID-19). Help is available. Now that the COVID-19 has been declared a national emergency,[1] Internal Revenue Code Section 139 can be used to allow employers to make tax-free payments or reimbursements to employees as “qualified disaster payments.” Below are Read More »
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