![]() Jacob Dayan, CEO of Community Tax, notes that "Any business interest expense not able to be applied for this year can be carried into the next year. The previous limit of 30% adjusted taxable income (ATI) has been increased significantly, to 50% for 20. While the depreciation life used to be set at 39 years, it was decreased to 15 years to reduce the time it takes for a small business owner to recoup their investment. New, temporary accelerated depreciation rules allow bonus deductions for renovations of property and health and safety upgrades to encourage businesses to make those changes for their staff and the public's safety. The scope of federal deductions small businesses can make on depreciating assets has also been expanded. Accelerated depreciation rules for qualified improvement property ![]() This means that if your business loses money this year due to COVID or any other reason, you should be able to receive money back sooner than you would have pre-pandemic. This limitation has now been removed," notes John Johansen, CPA at TaxFirst, Inc. "In addition to that, those losses could only offset 80% of the taxable income in the year they were used. "Before the CARES Act, NOLs had to be carried forward, which meant businesses couldn't receive a tax benefit for the NOL until they filed future returns," says Tim Yoder, Tax and Accounting Analyst at FitSmallBusiness. ![]() ![]() The CARES Act modified the treatment of Net Operating Losses (NOLs) incurred in 2018, 2019, and 2020 to offset taxable income from the five previous years. Here are a few tax-saving issues you should explore. While you're probably aware of the small business loans and payroll tax credits that flooded the news cycle in the early days of the pandemic-they aren't the only financial relief available to small business owners. ![]()
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