Business Tax Considerations Checklist

Whether recovering from losses due to the pandemic and working to grow sales, business owners need to plan. Here's a checklist of practical considerations.

• Revisit how much you saved for estimated taxes.


• Understand that state and local tax jurisdictions may not recognize all federal tax law changes.


• Owners of most business structures, including freelancers, need to understand the term “qualified business income (QBI).” You may qualify for a “pass-through” tax benefit on a portion of income, which may lower your personal federal income tax rate.


• Be aware of new depreciation formulas, which may let you deduct 100% of the cost of eligible property in the year it is placed in service, through 2022.


• Section 179 expensing also sees some changes, with an expanded definition of real property. Find out if this applies to your business.


• You may switch from an accrual accounting method to a cash method of accounting if your average annual gross receipts were $26 million or less in the three previous tax years.


• You may deduct up to 80% of net operating losses and carry forward these losses indefinitely, so keep your documentation until you use up this tax benefit.


• Revisit your payroll and bookkeeping records to see if you need to hire employees or contractors to handle them.


• Check with your tax professional about filing amended payroll tax returns to claim the COVID-19 pandemic related Employee Retention Tax credits.


• Talk to your tax professional for a complete list of documents you’ll need to bring to your next tax-planning meeting.