Small Business Tax Tips for COVID-19 Response
It just seems like the hits keep on coming in 2020, and as if there wasn’t enough for us to deal with already, we still have to think about taxes.
As your business gears up to deal with this annual chore, we wanted to mention a few new tax-related developments that might be able to give you a little more breathing room this year. These are just suggestions of course, but we recommend that you talk them over with your accountant or tax preparer to see if they work for you.
Delayed filing deadlines
By now you’re no doubt aware that the federal and state tax deadlines have been extended. The federal deadline for filing of tax returns has been pushed back to July 15, 2020. The state deadlines vary, so we recommend that you check your state for the most accurate info.
Delayed payroll tax dates
It’s not just the filing deadline for tax returns that has been extended. The CARES Act allows small businesses to put off paying their share of Social Security tax contributions during 2020 – half of that payment is due by December 31, 2021, and the remaining half is now due one year later on December 31, 2022. For any business with employees, this can put some cash back into your business for at least a year if not two.
Sick leave tax credits
Under the Families First Coronavirus Response Act (FFCRA) employers are required to provide sick leave benefits to their employees who are ill or who are caring for sick family members or children. However, under this act, as an employer, you may be able to receive a refundable sick leave tax credit based on how much sick leave you paid out to your staff.
If you have fewer than 50 employees and you’re worried about how you’re going to be able to offer sick leave to your staff, we recommend that you look into the details as they’re explained by the IRS.
Track all income and expenses and be sure to look forward
You’re running a tight ship and you most likely have a good handle on your organizational performance and financial situation. Solid financial practices are even more essential now, especially if you’ve experienced a downturn in your business. If you’ve had a net operating loss during 2020, there is a possibility that you can claim this year’s loss as a carryback to a more profitable year when you file your taxes.
Be sure to track your income and expenses accurately this year, no matter how scary it might be. You might be in line for some tax breaks down the road.
Talk to your tax professional
We’ve written a couple different COVID-related blog posts, and the one point that comes up time and again is the importance of communication. Today, we’re going to urge you to make sure that you have an open channel of communication with your tax preparer or accountant. The IRS is creating new programs and changing guidelines all the time and you should always be looking to a professional for the best and most current advice.
It’s also important that you tell them honestly what’s going on in your business. You aren’t the only one having a tough time, so don’t be embarrassed. There are a multitude of programs out there designed to help, and your accountant can’t assist you in finding help if they don’t know that you need it.
Finally - take care of yourself
If you’re the heart of your company, you must stick around for the long haul, so you need to work on a bit of self-care during a rough patch like this. If that means that you force yourself to take a day (or even a half-day) off every week, then that’s a strategy that’s going to pay off in the long run. We don’t want to sound like your mother, but make sure you’re eating right, get a bit of exercise, and be sure that you’re getting enough sleep. People are counting on you, and we’re not entirely joking when we say that your colleagues might just be counting on you to read a book, take a long drive through the country, or just watch a bunch of episodes of The Office on your couch.
When it comes to getting through tough times, nobody knows how to do it like Core Group US. If you’re interested in seeing what our Core Tax Process™ can do for you, give us a call and let’s talk! We’re passionate about helping, and we’d love to know what we can do to help you succeed.