In the last two years, the rules governing small business taxes have altered dramatically. This year is no exception, with the expiration of many of the pandemic-era discounts and deferrals. The tax bill has been about the dog that didn’t bark in a number of ways. They did nothing about capital gains, and they did nothing about state taxes. There’s a lot of positive news concerning events that didn’t take place.

The good news is that, even though these incentives are expiring, the impact on most small business owners’ overall tax rate will be minimal. Meanwhile, company owners can still qualify for pandemic-related benefits retrospectively. Taxopia’s company tax returns are some of the most important changes that small business owners should be aware of.

Employee Retention Credit can still be claimed

Many business owners were unaware of the program or did not apply for it because it underwent three major revisions in the last two years. Those who took out a PPP loan were first barred from participating. When the second iteration arrived, everything changed. Rules limiting how much a business might get based on how much it was affected by the virus were also relaxed. It’s not too late to file retrospectively for small firms that missed the program.

Operating losses have a less favorable tax treatment

In the last few years, there has been a significant shift in how business owners can carry back or forward net operating losses. The laws governing the usage of company financing expenses and net operating loss have now been restored to their pre-pandemic state. Limitations on net operating losses may result in increased income tax obligations. For example, if a business owner experienced a net operating loss in 2018 and taxable income in 2019, the net operating loss might be used to reduce 2019 taxable income. In 2020 taxes, net operating losses were prevalent, and business owners also updated earlier tax filings with net operating losses carried back.

Deferred Social Security payments are due

The first half was scheduled for 2021, while the second half is due by the end of this year. Because the payments have already been deferred, the IRS has cautioned that any taxpayers who miss the December 31 deadline would face penalties. According to tax advisers, this move is less likely to bring hardship to business owners because few people took advantage of it.

Because of the numerous changes in tax laws over the last two years, small business owners may require an accountant or tax planner more than ever. The lack of responsiveness from an overwhelmed IRS, which is dealing with a record backlog of tax returns, adds to the stress of tax files.