As a follow-up to our previous article, 2021 Tax Planning Opportunities for the Construction Industry, additional coronavirus relief-related legislation has been passed in addition to the CARES Act. Because many businesses face unparalleled economic uncertainty due to COVID‐19, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act provided relief for businesses and individuals.
As we approach tax year-end planning, business taxpayers should consider the following provisions:
- Net Operating Losses
- Excess Business Loss Limitations
- Employee Retention Credit
- Delay of Payment of Employer Social Security Taxes
- Qualified Improvement Property
- Business Interest Expense
- Paycheck Protection Program (PPP)
- Families First Coronavirus Response Act (FFCRA)
- Expansions Under the American Rescue Plan Act for COVID Sick and Family Leave
- Section 139: Tax-Free Reimbursements for COVID‐19 Expenses
As we continue to follow this development of increased income and estate tax rates likely to occur for 2022 and beyond, taxpayers should consider deferring deductions to 2022 and accelerating recognition of income into the 2021 tax year. By doing so could potentially create permanent tax savings.
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