- Potential profitability of the business
- Potential Liability of the business
- Entity formation and tax type
- Industry specific regulatory/compliance requirements
- Accounting Method and Bookkeeping system
- Professionals to Hire
- Initial capital requirements including equipment purchases
- Hiring employees vs independent contractors
- State filing requirements
- Organization and startup costs
Certainly a lot going on with the Pandemic. Here is a brief update of what’s new.
- Business Loss Limitations – Does not apply for 2018, 2019 and 2020 due to Pandemic.
- Business Interest Expense Limitations – Increase in amount allowed and elect to use 2019 income to calculate 2020 limit due to Pandemic
- Fringe Benefits – Qualified Education Perks now include payment of student loans.
- Meals – Usually qualified meals are 50% deductible, but for 2021 and 2022 they are 100% deductible due to Pandemic.
- Net Operating Losses – Corporations now can temporarily carryback losses due to Pandemic
- Payroll Protection Program – Second Draw PPP Loans now available for those that qualify.
- Payroll Taxes
No longer the good ole days when all long term capital gains were taxed at 15%. There are three rates involved these days applied as follows.
Sometimes you just need a good ole Federal tax bracket schedule to see where you stand. Here’s 2020.
To address nexus issues during the coronavirus pandemic, New Jersey has implemented numerous temporary rules surrounding when a business is deemed to be doing business in NJ. Click on the link below for more info.
The Treasury Department and the Internal Revenue Service issued updated guidance allowing deductions for the payments of eligible expenses when such payments would result (or be expected to result) in the forgiveness of a loan (covered loan) under the Paycheck Protection Program (PPP). Click on the links below for more info.
The Internal Revenue Service urges employers to take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll. Click the links below for more info.
Effective for tax years beginning on or after 1/1/2020, NJ Pass-Through Businesses can elect to pay tax due on the owner’s share of distributive proceeds. Click on the links below for more info.
Eligible businesses may apply for a Second Draw PPP loan starting 1/13/2021. Click on the link below for more info.
A very tricky credit to take so beware! Click on the links below for more info.