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There are many reasons you can choose to file an extension for your income taxes. Most likely, you simply need more time to gather all of your information or meet with your accountant. But is there a downside to filing an extension?
Tax deductions are great, but tax credits are even better! So what's the difference? Glad you asked!
You are forgiven for not being able to keep up with all of the changes in small business taxes. It has been a chore to digest everything even for professionals. Here is a recap of recent small business expense changes.
Accountants are weird. They use funny words and use lots of spreadsheets. One common word is Capital Improvements. Similar words that they use to describe the same things: Capital Assets, Fixed Assets, Property, Real Estate, FF&E (Furniture, Fixtures, & Equipment). In the accounting tax world, all of these terms describe something with an economic benefit beyond one year.
During lean times, people find opportunities to turn their hobby into a few extra bucks. Sometimes those opportunities explode into more possibilities than expected. It doesn’t take long before you ask yourself a reality-check question.
Lots of the old tax rules have changed in the last few years. If you haven't reviewed and adapted, you are likely paying your rich Uncle Sam too much. The Tax Cut and Jobs Act (TCJA) combined the amounts for standard deductions and exemptions into one number. The Act also eliminated deductions entirely. This effectively removed itemized deductions for many tax payers since the standard deduction/exemption for 2020 is $24,800 (married filing jointly).
To answer your question, no Congress is not done. In the wee hours of December 21st, they passed the Consolidated Appropriations Act 2021 and included an extension of the popular Paycheck Protection Program (PPP) for 2021. The Small Business Administration has 10 days to issue regulations, and as in the CARES Act, expect the SBA to have several revisions.
Previously, I have written about the new round of PPP Loans and the grants for shuttered venue operators that were in the Consolidated Appropriations Act. The Act also extended and expanded the Employee Retention Credit.
