Articles and News

Philadelphia, PA—A few provisions in the Coronavirus Aid, Relief and Economic Security (CARES) Act could cut federal income taxes for small businesses this year. The program provided payroll and other funding to millions of small business owners impacted by the coronavirus shutdowns, but the act also includes some lesser-known deductions, such as for research and development, coronavirus-related expenses, depreciating assets, and net operating losses, says accountant and business owner Gene Marks.

Writing in the Philadelphia Inquirer, Marks says, “there are new and temporary rules about net operating losses, or NOLs. If your business loses money this year, regardless of whether it was pandemic-related, you may be able to get money back from the government faster than you were able to before.

That’s because, up until this year, and due to the 2017 tax law changes, businesses are allowed to apply NOLs only to future years. But the CARES Act will allow businesses to not only carry forward their losses but to now also carry them back for up to five years.”

It also means that if you made money in the last five years, you could reduce those prior profits with this year’s loss and get money back on taxes already paid.

But the CARES Act legislation expires on December 31, so small business owners are advised to talk to their tax accountant as soon as possible while there’s still some time to take action.

Read the full article here.

Top image: Dreamstime