2020 Small Business Tax Provisions
2020 has hit small businesses the hardest, across the US. To mend these hardships, the COVID-19 relief legislation has offered some enticing tax provisions that small businesses should be taking advantage of.
“There are several new tax rules related to COVID-19 and other rules set to expire this year.”
-Barbara Weltman, Small Business Tax Specialist.
The CARES Act has allowed the following provisions:
50% of Social Security tax on net earning can be deferred (over the next 2 tax years)
Five-year carry back of net operating losses
100% deductibility on real property purchases (Bonus Depreciation)
If your business, like many others, has had net operating losses in 2020, you can carry those losses back for up to five-years. This will help to reduce this year’s taxable income for small businesses and may even end in a tax refund.
If you are planning to purchase capital equipment, now is the time to do so. Section 179 coupled with bonus depreciation has made equipment purchases very attractive. The CARES Act makes it possible for bonus depreciation to be taken on any interior improvements to commercial buildings. This makes it possible for 100% of the “Qualified improvement property” to be deducted. Check out our Section 179 Calculator to help determine what year-end decisions to make for your business.
Other tax provisions you may be interested in:
If you did not apply for PPP, you are eligible to offset $5,000 per retained employee on your federal payroll tax
Increased estate tax exemption from 5 million to 11.38 million dollars.
Energy Efficient Commercial Buildings Tax Deduction ($1.80/sq. ft)
R&D Tax Credit
Work Opportunity Tax Credit ($2,400)
Due to the tax benefits involved with purchasing a new piece of equipment or machinery, now is the time to make those purchases. Take your business to the next level and get approved for a low rate loan from US Capital Solutions before the end of 2020 to take advantage of a multitude of tax benefits. US Capital Solutions is here to help you grow your business, no matter what you do. Apply online today or get a free consultation from one of our Account Executives!
