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What to know about filing a 2021 tax return if you own a business

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Samuel Corum/Bloomberg via Getty Images

Rules around small business taxes have changed significantly in the last two years. This year is no exception as many of the various pandemic-era deductions and deferrals come to an end. 

The good news is that even though these benefits are ending, the impact on the overall tax rate for most small business owners won’t be significant. Accountants and tax planners say the bigger impact would have come from the Build Back Better infrastructure bill, which includes proposals to increase capital gains tax, limit the 20% deduction for qualified business income under section 199A, and other factors that would increase taxes, but those have not come to pass. Yet. 

“A lot of ways, the tax bill’s been about the dog that didn’t bark. They didn’t do anything on capital gains, they didn’t do anything on state tax. There’s a lot of good news about things that didn’t happen,” said Dean Zerbe, national managing director at Alliantgroup, a tax consultancy. 

Meanwhile, business owners can still apply retroactively for certain pandemic-related benefits. Here are some of the biggest changes that small business owners need to know about this tax season. 

It’s not too late to claim Employee Retention Credit 

Tax treatment of operating losses is less generous 

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What to know about filing a 2021 tax return if you own a business