CPA Trucking Industry Specialist

Blockchain has existed for more than a decade, yet it still beckons businesses with promises of efficient, secure transactional technology. Blockchain is a distributed, shared digital ledger that’s continuously copied and synchronized. The ledger isn’t housed on a central server or controlled by one party. Rather, transactions are added to the ledger only when verified through established consensus protocols. Third-party verification makes blockchain highly resistant to errors, tampering or fraud. Blockchain is already proving useful to businesses in various ways, including generating smart contracts and demonstrating service of process in legal proceedings. Contact us for more info.

COVID-19 has caused widespread furloughs and layoffs. Fortunately, employers that keep workers on their payrolls are eligible for a refundable Employee Retention Tax Credit, which was extended and enhanced in the latest law. Under the CARES Act, the credit only covered wages paid between March 13, 2020, and Dec. 31, 2020. The new law extends the covered wage period to include the first two calendar quarters of 2021. In addition, for the first two quarters of 2021 ending on June 30, the new law increases the overall covered wage ceiling to 70% of qualified wages paid during the applicable quarter (versus 50% under the CARES Act). These are just some of the changes. Contact us with questions.

If you or your child attends (or plans to attend) college, you may be eligible for tax breaks to help foot the bill. The new Consolidated Appropriations Act made some changes. The law repeals the Tuition and Fees Deduction for 2021 and later years. In addition, for 2021 and beyond, the new law aligns the income phase-out rule for the Lifetime Learning Credit (LLC) with the more favorable phase-out rule for the American Opportunity Tax Credit (AOTC). The LLC can be worth up to $2,000 per tax return annually while the AOTC can be worth up to $2,500 per student each year. Talk with us about which tax credit is the most beneficial in your situation. Each has its own requirements.

One item of interest for small business owners in the Consolidated Appropriations Act (CAA) is the availability of a second loan from the Paycheck Protection Program (PPP). The recently enacted CAA permits some small businesses who received a PPP loan to take out a PPP Second Draw Loan of up to $2 million. To qualify, you must employ no more than 300 employees per physical location, have used or will use the full amount of your first PPP loan, and demonstrate at least a 25% reduction in gross receipts during any quarter of 2020 (as compared with the same quarter in 2019). Additional rules apply. Contact us with any questions you might have about PPP loans.

Sales staffs have been under unprecedented pressure this year. The COVID-19 pandemic triggered economic changes that made many buyers cut back on spending. With the economy slowly recovering, here are four steps your salespeople can follow to improve their odds of success: 1) Qualify prospects methodically so sales staffers focus most or all their time on those most likely to buy, 2) Ask the right questions, based on research, to identify a prospect’s specific needs, 3) Proactively identify and address objections during sales calls to eliminate unpleasant surprises at closing, and 4) Above all, present a solution that fixes a problem or helps achieve a goal. Contact us for more info.

Do you buy or lease computer software to use in your business? Do you develop software for use in your business, or for sale or lease to others? You should be aware there are complex rules that may apply to determine the tax treatment of the expenses. The rules depend on whether the software is purchased, leased or developed by your business. For example, you must deduct amounts you pay to rent leased software in the tax year they’re paid, if you’re a cash-method taxpayer, or the tax year for which the rentals are accrued, if you’re an accrual-method taxpayer. We can assist you in applying the tax rules for treating computer software costs in the way that is most advantageous for you.

If you file a joint tax return with your spouse, you should be aware of your individual liability. And if you’re getting divorced, you should know that there may be relief available if the IRS comes after you for certain past-due taxes. When a married couple files jointly, each spouse is liable for the tax on their combined income. That means the IRS can come after either spouse to collect the entire tax, penalties and interest, not just the part that’s attributed to that spouse. In some cases, spouses are eligible for innocent spouse relief. Generally, they were unaware of a tax understatement that was attributable to the other spouse. Contact us if you want to try and obtain relief.

Mobile devices have become the constant companions of today’s employees, a relationship only further cemented by the COVID-19 pandemic. But convenience brings risk. In the current economy, thieves may be trying harder to snatch technological assets. And a stolen or hacked device means hackers could gain possession of sensitive, confidential data about your company, customers and employees. To better protect your mobile tech, consider standardizing product types and operating systems. Also, enforce strict policies that include power-on passwords and regular password changes. Set data storage limits, limit personal use and keep security software updated as well. Contact us for more info.

The business use of websites is widespread. But determining the proper tax treatment for the costs involved in developing a website can be difficult. The IRS hasn’t yet released formal guidance on when website costs can be deducted, so you must apply existing guidance that’s available on other costs to the issue of website development costs. The exact treatment of website design costs depends on whether they’re software or hardware and whether they’re part of a start-up business. If you hire third parties to set up and run your website, payments are currently deductible as ordinary and necessary business expenses. Contact us if you have questions or want to plan for website costs.

The current federal estate tax exemption ($11.58 million in 2020) means that many people aren’t concerned with estate tax. But they should still plan to save income taxes. For example, be careful making lifetime transfers of appreciated assets. It’s true that the assets and future appreciation generated by them are removed from your estate. But the gift carries a potential income tax cost because the recipient receives your basis upon transfer. He or she could face capital gains tax on the sale of the gifted property in the future. If the appreciated property is held until death, under current law, the heir will get a step-up in basis that will reduce or wipe out the capital gains tax.

The IRS recently announced special per diem rates that can be used to substantiate business expenses incurred for travel away from home on or after October 1, 2020. Employers using these rates to set per diem allowances can treat the amount of certain categories of travel expenses as substantiated without requiring employees to prove the actual amount spent. For travel within the continental United States, employers can use the optional high-low method for substantiating lodging, meals and incidental expenses, or for substantiating meal and incidental expenses only. The per diem rules can greatly simplify the process of substantiating business travel expenses. Contact us for more info.

Here are a few key tax-related deadlines for businesses and other employers during Quarter 4 of 2020. OCT. 15: If you’re the owner or operator of a calendar-year C corp. which filed an extension, file a 2019 income tax return. NOV. 2: Report income tax withholding and FICA taxes for Q3 2020 (unless you’re eligible for a Nov. 10 deadline because you deposited on time (and in full) all of the associated taxes due). DEC. 15: If a calendar-year C corp., pay the fourth installment of 2020 estimated income taxes. Contact us for more about the filing requirements and to ensure you’re meeting all applicable deadlines.

In some cases, investors have related expenses, such as the cost of subscriptions to financial periodicals and clerical expenses. Are they tax deductible? Currently, they’re only deductible if you can show that your investment activities rise to the level of carrying on a trade or business. In that case, you may be considered a trader, rather than an investor. A trader is entitled to deduct investment-related expenses as business expenses. A trader is also entitled to deduct home-office expenses if the home office is used exclusively on a regular basis as the trader’s principal place of business. However, be aware that trader status is difficult to achieve. Contact us with questions.

The economic impact of the COVID-19 pandemic has hurt many companies but also opened opportunities for others to expand or pivot into more profitable areas. If your business needs working capital to grow, rather than simply survive, consider a mezzanine loan. These work by layering a junior loan on top of a senior (or primary) loan, combining aspects of senior secured debt from a bank and equity-based financing from direct investors. The advantages: a relatively quick approval process and access to working capital that you may be unable to obtain elsewhere. Drawbacks include high interest rates and potential loss of ownership share if delinquency or default occurs. Contact us for more info.

The IRS has issued guidance to employers about the presidential action to allow employers to defer certain payroll taxes. Notice 2020-65 was issued to implement President Trump’s executive memo signed Aug. 8. The deferral involves wages or compensation paid to an employee beginning Sept. 1, 2020, and ending Dec. 31, 2020, but only if the amount paid for a biweekly pay period is less than $4,000, or an equivalent amount in other pay periods. The guidance postpones the withholding and remittance of the employee share of Social Security tax until the period beginning Jan. 1, 2021, and ending April 30, 2021. Penalties, interest and additions to tax will begin to accrue on May 1, 2021.

COVID-19 has resulted in many changes in our lives, and some of them have tax implications. For example, many employers have required employees to work from home. Unfortunately, employee business expense deductions (including expenses to maintain a home office) are disallowed from 2018 through 2025. However, if you’re self-employed and work from a home office, you can be eligible to claim home office deductions for your related expenses if you satisfy the strict rules. Another tax-related situation involves people who are laid off and collecting unemployment benefits. Be aware that these benefits are taxable and must be reported on federal income tax returns for the tax year received.

As companies adjust to the COVID-19 crisis and resulting economic fallout, prioritizing customer service is more important than ever. Success starts at the top. Encourage your management team and fellow business owners (if any) to regularly interact with customers. Moving down the organizational chart, cultivate customer-service heroes by celebrating achievements and empowering employees. Leverage the latest technology to deploy a system of immediate or at least timely customer feedback. Continually reassess your approach to customer service to suit the changing circumstances of not only the pandemic, but also your industry and local economy. Contact us for help.