Business Tax Services

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How Federal Taxes Will be Affected With a Biden Presidency

President Biden campaigned on a broad agenda, including a pledge to roll back many of President Trump's tax policies. In response to the Tax Cuts and Jobs Act (TCJA), Biden has promised a progressive taxation approach, focused primarily on increasing the burden on businesses and high-income individuals.

Tax eAlert: The Biden Administration Proposes Far-Reaching Tax Overhaul

How Tax Law Changes May Impact Your Entity Selection

Business owners who are trying to decide which legal entity is appropriate for their companies must factor in several tax considerations in light of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the potential for new tax legislation in 2021. More information

What are the Latest Tax Updates from Washington?

  • [May 2021] President Biden recently announced his $1.8 trillion American Families Plan (AFP), the third step in his Build Back Better policy initiative. The announcement followed the previous releases of the proposed $2.3 trillion American Jobs Plan and the Made in America Tax Plan. These plans propose major investments in various domestic initiatives, such as expanded tax credits for families, offset with tax increases on high-income individual taxpayers and corporations. More information on proposed tax changes.
  • [March 2021] The American Rescue Plan Act (ARPA) was enacted on March 11, 2021. This newest legislation aimed at providing economic and other relief from COVID-19 includes $1.9 trillion in funding for individuals, businesses and state and local governments. ARPA extends and expands some of the critical provisions in the CARES Act and the Consolidated Appropriations Act (CAA). It also includes some new provisions that should come as welcome news to many families and businesses. Details on ARPA
  • [December 2020] The COVID-19 Relief Act was signed into law on 12/27/20 to provide additional economic relief for individuals and businesses. Many of the CARES Act’s tax credits, set to expire on 12/31/20, were extended in this newest bill. Details on COVID-19 Relief Act
  • [March 2020] The Coronavirus Aid, Relief, and Economic Security (CARES) Act was a $2 trillion bill with an array of significant tax-saving provisions for both individuals and businesses. The bill, signed into law on 3/27/20, includes provisions for 2020 to create needed cash flow and it could affect prior tax years. Details on CARES Act

What are the 2021 Business Tax Rates and Credits?

  • Corporate Tax Rate: 21%
  • The Estate Tax Exemption for 2021 is $11.7 million for individuals and $23.4 million for married couples.
  • Bonus Depreciation now applies to both new and used items (if the used items are placed in service for the first time in the business). 100% bonus depreciation on qualifying business equipment is through 2022.
  • Employee Retention Credit: The Consolidated Appropriations Act (CAA), signed into law on December 27, 2020, included a credit opportunity that might allow some businesses the ability to claim a per employee credit of up to $14,000 in 2021. Determining the best way to use the Employee Retention Credit is complex. Utilize a tax expert to help you determine how this credit works with your PPP loans to maximize the benefits available to your company. Using our tax planning experts, SVA can help you identify the best way to use this credit and maximizing your tax savings.
  • Family Leave Credits are a refundable credit for required leave provided to employees who are unable to work or telework because they are caring for someone with COVID-19, caring for a child whose school or place of care is closed, or childcare is unavailable due to COVID-10. Employers are entitled to a sick leave credit for up to 80 hours limited to 2/3 of employee’s regular pay or up to $200 per day, but no more than $2,000 per employee in total, plus related health care costs.
  • Net Operating Loss (NOL) Carryback: With the passing of the CARES Act, businesses and individuals can now carryback NOLs from 2018, 2019, and 2020 to the prior five tax years. Note that any losses arising in 2021 must be carried forward to future years. To understand the modified rules, view our Biz Tip on NOLs and AMT.
  • Qualified Business Income (QBI) Deduction: Through 2025, taxpayers can deduct up to 20% of their QBI from a pass-through entity (sole proprietorship, LLC, partnership, or S corporation). Phaseouts begin when taxable income exceeds $164,900 for single taxpayers or $329,800 for married couples (other limitations also apply). More information
  • Research & Development (R&D) Credits are federal tax credits that allow up to 10% of eligible expenses that relate to a new or improved process or product. Credits can be utilized to offset income tax, or if eligible, employer-paid payroll taxes. Additionally any credit can be carried back one year or forwarded up to 20 years. For more information, view our Biz Tip on R&D Tax Credits.
  • The Section 179 Deduction applies to tangible personal property, such as machinery and equipment, purchased for the business. The annual deduction limit is $1.04 million for tax years beginning in 2020, subject to a phaseout rule if the amount is over $2.59 million. This deduction is also available for qualifying tangible personal property such as furniture and appliances, as well as some nonresidential real property such as roofs, ventilation, fire protection, and security systems. Read more on Section 179
  • Work Opportunity Tax Credit: If you hire individuals from a specified disadvantaged targeted group, you could be eligible for a credit worth 25-40% of their wages. Find more information on the tax credit extension.

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Services Offered: How SVA Can Help

Business professionals need easy access to information to make timely decisions. SVA has what you need, when you need it. Choose a topic below or just contact us directly. Our expertise is ready anytime you need it.

The best way to stay current on all the ways your business can save time and money is to enlist an experienced accounting firm. SVA can help you with:

  • Accounting Methods
  • Consolidated Multi-Entity Tax Returns
  • Entity Selection, Formation, and Structure Planning
  • Executive Compensation Models
  • Inventory Method Planning
  • Ownership Planning

Tax planning should occur all year long, not just at year-end. SVA’s tax team is always in the know about the latest legislation and will help you minimize your business tax burden. Along with all the tax credits listed above, SVA can also help you with:

  • Buying vs. Leasing
  • Depreciation Method Planning
  • International Tax and Foreign Reporting
  • IRS and State Audit Assistance
  • Transaction Strategies

The tax-deferred exchange remains the most important tool in planning for non-personal real estate transactions. The 1031 exchange is a swap of one investment property for another, allowing capital gains to be deferred. We work with clients to navigate the many rules and regulations that affect these transactions. We also will act on our clients’ behalf to arrange and act as a liaison between the various other professionals required to complete the transaction according to strict IRS rules.

Everyone is familiar with sales tax and the role it plays as a consumer. However, understanding the complexities and laws involved with sales and use tax as it applies to business is another story. Reduce the impact of sales tax on not only your business but your customers by proactively planning for the tax consequences of your business-related activities.

There are many tax credits currently available, along with new ones available each year based on stimulus legislation and changing presidential leadership. Here are a few SVA can help you with:

  • Energy/Fuel Tax Credits
  • Low-Income Housing Tax Credits
  • New Markets Tax Credits
  • Rehabilitation Tax Credits
  • Research and Development Tax Credits
  • State Tax Credits
  • Wisconsin Manufacturing Tax Credits

Nexus, also known as sufficient physical presence, determines whether an out-of-state business selling products into a state is liable for collecting sales and use tax on sales into the state. Nexus is required before a taxing jurisdiction can impose its taxes on an entity. Congress enacted Public Law 86-272 which protects companies with only minimal state activities from being taxed. Our professionals can assist you in determining your company's multistate tax situation, take steps to insulate your activities from overzealous states, and minimize your overall state tax liability. Biz Tip: What Manufacturers Should Know in the Wake of Wayfair Vs. South Dakota

Paycheck Protection Program (PPP) funds provided billions in economic relief for businesses. The program includes round 1 funding, round 2 funding and loan forgiveness opportunities. Each round has specific guidelines and determining when to apply for funds and forgiveness requires talking with a tax expert. Navigating the other credits like the Employee Retention Credit that work together with the PPP funds can be complex. SVA has a team of experts who consistently monitor the latest news regarding these programs from the SBA and legislative efforts.

Resources

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The Qualified Business Income Deduction eGuide

Are you a small business owner? Learn how you can take full advantage of the Qualified Business Income (QBI) deduction by downloading this eGuide.

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The Business Owner's Guide to R&D Tax Credits

There is a misconception that R&D tax credits are reserved for companies that have a dedicated R&D staff. The truth is any business can qualify as long as they adhere to a few simple guidelines outlined in this eGuide.

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American Rescue Plan Act of 2021 Overview

Learn how the latest COVID-19 economic relief bill affects businesses and individuals with this downloadable PDF!

Awards and Affiliations

Forbes Names SVA as 2021 America's Best Accounting Firms
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Colorado Springs, CO 80962
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