Your Small Business May Qualify for Pandemic Tax Breaks
Many small businesses have struggled to stay afloat during the COVID-19 pandemic, and some were even forced to close. For the businesses that continue, life will never be the same.
We have seen unprecedented changes during this pandemic; grocery stores were out of necessities and fresh produce, brick and mortar shops switched to a fully digital platform, and employees were forced to work from home. And even now as strict quarantine restrictions are being lifted the world remains a very different place.
However, through these hardships many companies have persevered and continue to work and run their small business every day. Thankfully the federal government has announced a tax relief plan for those small businesses, which will greatly help thousands around the country.
4 Things You Should Know About the Tax Relief Plan:
- Employee Retention Credit: While some small businesses have been able to keep their small staff on a full-time basis, others have had to let some go. The employee retention credit was designed to help employers keep their employees on payroll; effective between March 12, 2020 and January 1, 2021. For wages that qualify, the CARES Act will give a 50% credit up to $10,000 during the qualifying nine-month period.
- Filing Deadline: Although the date has already passed, it’s still important to mention that the tax deadline in 2020 was pushed to July 15, 2020. This made a huge difference in the lives of small business owners everywhere. Being able to prolong paying quarterly tax bills by two months allowed businesses to save up money to ensure that they could make these payments, and stay in business. Be sure to be prepared for the 2021 tax season.
- Payroll Taxes: Employers can now wait to pay their payroll taxes until 2021, and can also pay in installments, due to the CARES Act. Instead of paying between March and December of 2020, they can choose to pay half by the end of next year, and the other half by the end of 2022.
- Tax Credits from Paid Leave: Thanks to the FFCRA (Families First Coronavirus Response Act), small business employers can offer paid time off to employees who are unable to work due to the coronavirus. An employee can take up to ten paid sick days if they have the coronavirus, are showing symptoms, or have been exposed. This act provides the employer a tax credit for every day the employee was out, up to $511/day.
Small Business Owners
These changes have made, and will continue to make, a world of difference for small business owners across the country. Those who were unsure if they could keep their doors open after the pandemic can hopefully breathe a little easier knowing that certain deadlines have been pushed, and certain credits have been funded.
Are you looking for advice for the 2021 tax season, or clarification on the Tax Relief Plan? Taurus CPA Solutions is here for you. Visit our services page for more info, give us a call at 410-465-4600, or contact us online today.