Returning Value Blog

As the 2021 tax filing season progresses, small businesses and self-employed taxpayers should make certain they are taking advantage of all of the tax deductions and opportunities available to them on their 2021 federal income tax returns. Tax savings increases after-tax cash flow and can mean greater return on investment and more money to fund expansion and the overall growth of the business. The following are 10 top tax breaks for small businesses and business owners to keep in mind when finalizing their tax returns for 2021 and planning for 2022.

The federal government is helping to pick up the tab for certain business meals. Under a provision that’s part of one of the COVID-19 relief laws, the usual deduction for 50% of the cost of business meals is doubled to 100% for food and beverages provided by restaurants in 2022 (and 2021).

Business owners need to make choices on their 2021 taxes regarding the Paycheck Protection Program and the Employee Retention Credit. Both were enacted to help businesses stay in operation during the lockdowns caused by the COVID-19 pandemic. 

Typically, businesses want to delay the recognition of taxable income into future years and accelerate deductions into the current year. But when is it prudent to do the opposite? And why would you want to?

Here are some facts you should know.

In today’s economy, many small businesses are strapped for cash. They may find it beneficial to barter or trade for goods and services instead of paying cash for them. Bartering is the oldest form of trade, and the internet has made it easier to engage with other businesses. But if your business gets involved in bartering, be aware that the fair market value of goods that you receive in bartering is taxable income. And if you exchange services with another business, the transaction results in taxable income for both parties.

As 2022 kicks off and tax legislation continues to be stalled in Congress, the amendment to Internal Revenue Code (IRC) Section 174 was originally introduced by the 2017 tax reform legislation, the Tax Cuts and Jobs Act (TCJA), is now in effect.

The credit for increasing research activities, often referred to as the research and development (R&D) credit, is a valuable tax break available to eligible businesses. Claiming the credit involves complex calculations, which we can take care of for you. But in addition to the credit itself, be aware that the credit also has two features that are especially favorable to small businesses:

If you’re in business for yourself as a sole proprietor or planning to start a business, you need to know about the tax aspects of your venture. Here are eight important issues to consider:

While some businesses have closed since the start of the COVID-19 crisis, many new ventures have launched. Entrepreneurs have cited a number of reasons why they decided to start a business in the midst of a pandemic. For example, they had more time, wanted to take advantage of new opportunities, or they needed money due to being laid off. Whatever the reason, if you’ve recently started a new business or you’re contemplating starting one, be aware of the tax implications.

Do you want to sell commercial or investment real estate that has appreciated significantly? One way to defer a tax bill on the gain is with a Section 1031 “like-kind” exchange where you exchange the property rather than sell it. With real estate prices up in some markets (and higher resulting tax bills), the like-kind exchange strategy may be attractive.