EAKUB A. KHAN CPA P.C.

The rise of self-employment and the side hustle is an exciting trend for the US economy. If this is you, there are important deductions you'll want to make use of to make your venture as profitable as possible. If you file your taxes with us, we're always looking out for these money-savers. Let us know if you have questions.

In the realm of preparing your tax return, I urge you ... do NOT fall prey to the thinking that a software program or talking heads on a floating desk can suffice to enable you to preserve your resources or properly leverage the multiplicity of credits, loopholes and deductions available. Give yourself the gift of financial peace of mind during tax season, and do it with someone who knows how to do it right.

Lowered gas and insurance costs in 2020 led the IRS to reduce the mileage deduction rates for 2021. This is now what you can deduct for driving for business purposes this year: - 56 cents/mile for business (down from 57.5) - 16 cents/mile for medical or moving (down from 17) - 14 cents/mile for charitable purposes... But with gas prices seemingly on the way up again in 2021, we'll probably see mileage rates affected accordingly next year.

Depending on how you handle your 2020 taxes, you'll end up in one of two groups: 1) Sitting on top of a mountain of tax benefits that are available to those who use them effectively, or 2) Crying at the bottom of a pit of missed tax opportunities that could have eased the financial strain of 2020.... We're here to help YOU process tax season. No matter what happened during the donkey that was "2020" ... we're going to ensure that your taxes are as locked tight, cost-efficient and SAVINGS-OPTIMIZED for you as legally and ethically possible.

Partnerships, LLCs and S-Corps: Circle March 15th on your calendar again. This is your business return deadline.

We like to have a little fun laughing at the newest TurboTax commercials that pop up this time of year. Last year, it was "all people are tax people". This year, they're promoting their "live" feature with commercials of a floating desk answering various deduction questions. It's clever, but it glides over what it is and isn't -- relying upon software to do your taxes can be a very expensive mistake. And that's not even mentioning the armies of bored, underpaid "tax experts"... who are "at your disposal", apparently. Now, if you'll pardon the slightly shameless plug... Every year, we unwind the messes of dozens (or more) of tax clients who went this self-prepared, software route -- and who missed out on the kind of personalized attention that we provide here. Yes, they have experts that will "file for you" ... ... but there is MUCH more to a tax strategy than simple "filing". The GOOD news is that we can go back and amend tax returns from the last 3 years, so if this is you, no shame -- we'll fix this stuff for you, and ensure you get back everything you deserve to.

According to a recent report, the IRS is apparently understaffed, overstretched and waaaay behind on collections notices, and other such things. Which is another reason to work directly with a qualified tax pro. We have a specialized line to the IRS and can often contact them on your behalf. We still have to wait on long hold times, but it's far superior to the general public lines. But that gives us time to ensure that everything is properly handled, and every possible deduction is taken.

Just announced... Tax season opens on Friday, Feb. 12, 2021. This is when the IRS will begin accepting paper AND electronic filing of your 2020 tax returns.... As always, we can help.

Business owners: Beginning Jan. 1, 2021 (and through June 30, 2021), the new relief bill expanded the Employee Retention Credit. - The bill increases the payroll tax credit rate from 50 percent to 70 percent of qualified wages.... - Also it expands eligibility for the credit by reducing the required year-over-year gross receipts decline from 50% to 20% and provides a safe harbor allowing employers to use prior quarter gross receipts to determine eligibility. This might not seem significant, but for the right business, this is VERY good news. - The limit on per-employee creditable wages is increased from $10,000 for the year to $10,000 for each quarter. Much more generous. - The 100-employee delineation for determining the relevant qualified wage base increases to employers with 500 or fewer employees. - Employers who receive PPP loans may still qualify for the ERTC with respect to wages that are not paid for with forgiven PPP proceeds. Previously, you had to choose one program or the other ... now, as long as you qualify for both, you can use both.

How about some good news? Here's an inspirational story about serving those we love and reminding us we're never too old to do great things. https://bit.ly/3snnbXr

PPP updates: Deductible PPP Expenses Under the new COVID relief bill (CAA), businesses are now allowed to deduct expenses associated with their forgiven PPP loans -- this is big news. ... New PPP Funds Further, the new law provides $284.45B to reopen and strengthen PPP for first and second time borrowers and reauthorizes the program through March 31, 2021. The requirement in order to receive a second PPP is that the small business has less than 300 employees and can demonstrate a revenue reduction of 25% in any quarter. PPP Forgiveness There are now simplified forgiveness applications for loans under $150K. Every lender will handle slightly differently, but what the bill indicates is that the borrower signs and submits a one-page certification that requires the borrower to list the loan amount, the number of employees retained, and the estimated total amount of the loan spent on payroll costs. That's it! Eligible Expenses The bill also expands the list of eligible expenses to include covered operations (software, cloud computing and other human resources and accounting needs), PPE, covered supplier costs and damage costs due to public disturbances. Related to EIDL The bill repeals the CARES Act provision that requires borrowers to deduct their EIDL Advance from their PPP loan forgiveness amount. ...That's a lot of info, but we wanted to simply summarize the basics of the new PPP provisions for you. (Yes, that was the simplified version.) Let us know what questions you have. We can help.