Economic Hardship Often Spurs Innovation
A great number of amazing companies like Uber, Square, and Instagram were born in the last recession. Hardship often leads to amazing innovation. It will not be surprising if we see many innovative companies coming out on the heels of this pandemic. Think about how many talented people have been furloughed and now have the time to devote their energies elsewhere. Millennials and Gen Z have shown that they are generations that embrace the challenges of being an entrepreneur.
Job Security No Longer Exists.
Many people think that starting a business is just too risky. However, the workforce no longer offers the security it once did. Companies do not take care of employees for a lifetime and then provide them with a large pension for retirement like they did a generation ago. People are often replaced and those who switch employers regularly, actually make more money. There is a sense that there is no longer any loyalty on the part of employers or employees. This type of environment actually makes starting your business not seem so risky.
Remember that every business is different and there is never going to be a one-size-fits-all solution to tax questions and problems. This is why it is vital to have a tax professional on your side all year round to guide you through an often confusing tax code.
The tax professional will protect your business from liability and make sure you comply with all major and minor regulations. They understand as a busy owner of a small to medium-sized business, you already have enough on your plate without also worrying about the mind-numbing minutiae of your business tax scheme. Let a business tax professional help you to greater business success and financial stability.
Caps On Business Loss Deductions Were Halted
The Coronavirus Aid, Relief, and Economic Security (CARES)fast and direct economic assistance for American workers, families, and small businesses, and preserve jobs for our American industries.
The CARES Act has halted the limitation rule on small business losses being capped at $250,000 for individuals and $500,000 for couples. This applies to 2018 to 2020, with business owners who had their losses limited before this year, being able to file the amended returns needed to actually receive refunds.
Corporate Alternative Minimum Tax Credits
The corporate alternative minimum tax is defined as “A variety of exclusions, deductions, and credits are available to corporations, which often allow them to reduce the amount of tax that they are required to pay on the income they earn, sometimes to zero. To ensure that these corporations pay at least some tax on their income, Sec. 55 imposes an alternative minimum tax (AMT), which requires many corporations to add back some of these deductions and credits and pay tax on this reconfigured amount.”
This was repealed in 2017 and the AMT was made available as refundable credits ending in 2021. The federal government is allowing businesses that were going to receive AMT credits at the end of 2021 to claim a refund now due to the pandemic.
How Do I Know If My Business Needs To Collect Sales Tax?
Forty-five out of the fifty states require businesses to collect sales tax. This does not even include that many cities and localities that also have sales tax regulations. You must understand the rules of the places that you do business. Does your state or local area require some sort of license or sales permit? Be sure that you are charging the correct rate for both the point of sale and the types of products your business sells.
How Do I Know If I Need To Pay Sales Tax In A Given State?
To establish whether or not a state can impose a sales tax upon your business there first needs to be nexus. Nexus relating to state sales tax is established by a connection between the state and your business. How this connection is defined has been subject to fairly recent changes that reflect changes in the way business is conducted in modern times.
Traditionally, the nexus has been established by the business having a physical presence in the state. However, due to the explosion of e-commerce, physical presence within a state is no longer a requirement for sales tax nexus. In the case of South Dakota v. Wayfair, the courts eliminated physical presence as the major requirement for creating nexus. It still should be noted that physical presence is considered an important requirement to allow a state to collect sales tax and is still one of the first considerations for sales tax.
Take Hold Of Your Destiny
Some people are scared of the stress that often comes along with managing a business. They think that they will not be able to handle keeping up with the ever-changing marketplace. What they often do not take into account is that day-to-day jobs can be just as stressful. Often, employees have to live up to the unrealistic expectations of several managers. Being an entrepreneur gives you more control over your own destiny, rather than have your fate be in the hands of other people. This way you can shape your life according to your needs.
Getting A Tax Resale Certification Is One Of The Best Things You Can Do As An Entrepreneur
If you decide to start a business, a tax resale certificate can really save you money on taxes.
In short, a tax retail certificate allows you not to pay sales tax on items that you plan to resell. This can also apply to supplies that are going to be used in products that you will resell, such as wood for a cabinet.
However, the process can be difficult and the rules are different for each state. That is why TaxResaleCertificate should do all the hard work for you. We can make sure that you get all the advantages of a tax resale certificate without having to deal with the hassle of government red tape. Let us handle the hard stuff so you can proceed to run your business with confidence. Make sure you check out our second blog in this series so you can learn even more valuable information about tax resale certificates.