How Our Proactive Tax Planning Process Works
At Accounting Buds, we help you better understand what your tax situation may look like in the future and how the decisions you make can affect your taxes. Your tax expert will provide a complete picture of how 280e and other tax rules will impact your company.
THIS COMPLETE PICTURE IS ONGOING THROUGHOUT THE YEAR:
At the start of the year, our tax specialists will take your prior year’s return and calculate what you can expect to pay for the current tax year.
Through discussions with your management team, we can help anticipate how the strategy you plan to implement for your business will affect your taxes. Understanding your holistic financial picture allows us to better assess potential tax benefits and tax deductions.
Your business makes adjustments to its strategic plan throughout the year, your tax plan should change along with it. Because we are intimately familiar with your current financials we will discuss and adapt tax strategies as your business’ strategic plan changes.
As you enter the last few months of the year, we will review your income/losses and discuss cash and tax management strategies based on your company’s results up to that point in the calendar year.
We will prepare and file your tax returns.
THE EMPLOYEE RETENTION TAX CREDIT
The Employee Retention Tax Credit (ERTC) was enacted as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to support small business owners through the government-imposed shutdowns. By claiming the ERTC for 2020 and 2021, employers can receive up to $26,000 per employee in the form of a direct payment from the IRS.
Full or partial shutdown
Reduction in operating hours
Distribution interruptions
Supply chain disruptions
Inability to work onsite
2020 ERTC CLAIMS
The ERTC outlined in the CARES act is more restrictive, and is based solely on the quarterly comparison of gross receipts from 2020 to 2019
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Gross receipts in each 2020 quarter must be 50% less than the same quarter in 2019.
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By meeting the above requirement, you’re entitled to a refundable tax credit equal to 50% of qualified wages and health care costs paid.
$5,000
2021 ERTC CLAIMS
Congress passed additional legislation in 2021 that provided another way a business could qualify for the ERTC, and that is forced closure. A business must satisfy only one of the following two conditions to claim the ERTC in 2021
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Your business was fully or partially suspended or had to reduce business hours due to a government order; or
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A drop of at least 20% in quarterly gross receipts as compared to the same quarter in 2019.
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By meeting one of the above conditions, you’re entitled to a refundable tax credit equal to 70% of wages and health care costs paid
