What can business owners do to reduce their taxes? Some need to make themselves aware of the various breaks available. Some of the benefits available to businesses for 2020 are the result of the 2017 Tax Cuts and Jobs Act (TCJA) and some were created by the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). In addition, although the chance of any further tax or Covid-19 legislation seems slim, further changes may come.
One effect of the Covid-19 pandemic is that many businesses are struggling with cash flow. This translates to an accounts receivable problem for the companies they owe money to. Knowing what your business can do lies in having good strategies in place to follow up with clients who are not paying their bills.
What will 2021 bring us? After a year of turmoil and surprises, no one has a clear crystal ball. But there are some certainties, and one is that the federal government is changing a variety of number affecting the finances of businesses and individuals.
First, any individual or business that received government funds this year should keep that in mind and have records on hand. This includes unemployment benefits and Paycheck Protection Program funds. The taxable situation for these can be complicated, so be sure to discuss them with a financial professional before the end of the year.
Even if you're doing a little freelance work from a home office, you're technically running a business and have some new tax responsibilities that you didn't have working entirely for wages. One of those requirements is filing Schedule C, which is used to report income or loss from a business you operated as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging is for income or profit and you're involved with continuity and regularity.
The COVID-19 pandemic made 2020 a rough year for everyone, and entertainers are among the hardest-hit groups. The shutdown of entertainment venues and production facilities across the country cut off a primary source of entertainers' incomes. But it did not cut off their creativity, as they moved online to showcase their talent.
Many businesses are facing the financial effects of the Covid-19 pandemic. The loss of clients and decreased cash flow have forced businesses to make some hard choices that involve restructuring debt either in- or outside of bankruptcy or simply closing the doors.
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