IRS Reopens ERC Voluntary Disclosure Program
The ERC Voluntary Disclosure Program aids businesses in rectifying potential misclaims of the Employee Retention Credit, promoting transparency and compliance with IRS regulations. The IRS has recently announced a limited time reopening of the Employee Retention Credit (ERC) Voluntary Disclosure Program, creating a crucial opportunity for businesses that received ERC refunds for the 2021 tax period. This program enables eligible companies, not currently under investigation, to voluntarily return a portion of their ERC refunds, helping them sidestep penalties related to potential overclaims. Available until November 22, the ERC Voluntary Disclosure Program allows businesses to correct any inaccuracies in their payments at a 15% discount, thus avoiding potential audits, penalties, and interest. What is ERC Voluntary Disclosure
Revenue & Tax Proposals FY 2025
The Biden administration has released its 2025 Budget Proposal, outlining the president’s policy priorities and tax proposals in the next fiscal year from Apr 1, 2024, to Mar 31, 2025. U.S. Department of the Treasury also released the “Green book,” as an additional 256 pages for General Explanations providing further detail on the proposals. The proposed budget continues to target taxes for corporations and high-net worth individuals, and in line with Biden’s prior statements, it does not raise taxes for individuals earnings less than $400,000 annually. While the proposals may not gain the necessary support from a Republican-controlled Congress, it is a pivotal time for tax policy, as many provisions
Corporate Transparency Affects Private Businesses in 2024
CTA (Corporate Transparency Act)The CTA was enacted by Congress on January 1, 2021, in an effort to combat financial crimes, money laundering, and corruption across all industries. The legislation mandates that privately held corporations, LLCs, partnerships, and other legal entities formed by filing with a Secretary of State must provide a Beneficial Ownership Information Report (BOI Report) to FinCEN (U.S. Department of Treasury bureau, Financial Crimes Enforcement Network) unless qualifying for an exemption. These efforts provide more transparency for the U.S. government to detect and prevent bad actors hiding behind corporate shell companies and other entity structures. ExemptionsThere are 23 types of entities that are exempt from CTA reporting requirements.
Clean Fuel Production Credit 2025
On May 31, 2024, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued Notice 2024-49, which provides important guidance on the clean fuel production credit established by the Inflation Reduction Act (IRA). This credit, detailed in section 45Z of the Internal Revenue Code, is designed to promote the production of clean fuels, a key component in advancing the nation’s sustainability objectives. To qualify for this credit, producers must secure a signed registration letter from the IRS by January 1, 2025, making it essential for taxpayers to apply early to avoid any potential processing delays. When is the deadline?Producers are required to submit their applications by July 15, 2024, to ensure processing aligns
ERC Tax Credit Update
Covid-19 StimulusThe “ERC” is the Employee Retention Credit, or ERTC (Employee Retention Tax Credit), initially announced by the IRS in 2020 to supplement businesses affected by Covid-19. At a high-level, the ERC credit would refund a portion of wages as an incentive for retaining employees during the U.S. economic shutdown in 2020 and 2021, however not double dipping with the PPP loan forgiveness. In this update, we do not provide the details regarding the qualifications, but note that the employer refund could potentially return as high as $26,000 per employee. Claim PositionsDue to the 3-year statute of limitations for 941 amendments, the ERC is now pertinent as the 2020 and
Tax Credits: Inflation Reduction Act of 2022
The Inflation Reduction Act offers organizations unique opportunities to leverage tax credits and drive innovation—unlock significant savings today by discovering how your organization can cash in on substantial discounts with these valuable incentives. The Inflation Reduction Act (IRA) introduces over 70 dynamic tax credits—ranging from investment and excise to production incentives—designed to propel the transition to cleaner energy. These credits aim to foster advanced manufacturing, encourage clean vehicle adoption, and significantly cut greenhouse gas emissions through alternative fuels and energy-efficient technologies. Moreover, the act enhances loan programs from the U.S. Department of Agriculture (USDA) and the Department of Energy (DOE), broadening access to vital funding. Beyond boosting investments in communities
Enterprise Risk Management (ERM) Blueprint
In today’s fast-paced and complex business environment, organizations across all industries are grappling with increasing challenges and risks. The ultimate solution lies in implementing an effective Enterprise Risk Management (ERM) program, which not only addresses risks but also enhances overall business strategy. What is ERM? Enterprise Risk Management (ERM) is a strategic framework designed to identify, assess, and mitigate risks that could obstruct an organization’s objectives while also seizing potential opportunities. This structured approach involves recognizing relevant threats, evaluating their likelihood and impact, developing response strategies, and monitoring outcomes. By proactively managing these aspects, organizations can safeguard and enhance value for their stakeholders, including owners, employees, customers, regulators, and society
The Future of Corporate Tax
Explore the future of corporate tax, influenced by globalization, digitalization, and demands for fairness. IntroductionAs the world of business continues to evolve, so too does the landscape of corporate taxation. With governments around the globe reevaluating their tax policies, the future of corporate tax is poised for significant changes that could impact businesses of all sizes. Whether you’re a small startup or a multinational corporation, understanding these potential shifts is crucial for strategic planning. In this article, we will explore the upcoming regulatory changes, their implications for businesses, and how companies can adapt to thrive in this new environment. The Shift Towards Global Minimum Tax Understanding the Global Minimum TaxOne
Renewable Energy Products: Tax Credits
When businesses venture into renewable energy projects, deciding between the Investment Tax Credit (ITC) and the Production Tax Credit (PTC) is key to maximizing financial incentives. Both tax credits offer significant benefits, but they are applied differently based on the project’s structure and goals. Understanding the distinctions between these two credits is essential for strategic decision-making. To explore how these credits can benefit your business or energy project, visit Applied Accountancy for expert advice on leveraging tax incentives. What is the ITC?The Investment Tax Credit (ITC) provides a federal tax reduction based on the upfront capital investment of a renewable energy project. It is particularly useful for projects that require substantial initial investments. For example, solar energy systems
Preparing for Digital Audits
As technology reshapes the business world, digital audits are becoming essential, offering enhanced efficiency and precision. These audits utilize AI and data analytics, automating the review of financial records and streamlining processes. While digital audits simplify compliance, they require businesses to adopt new tools and approaches. Below is an overview of how businesses can prepare for this transition and leverage the benefits of digital-first audits. What is a Digital Audit?A digital audit evaluates financial records using digital tools, automation, and artificial intelligence. In contrast to traditional audits that depend on manual assessments, digital audits swiftly and precisely examine enormous volumes of data. Because they incorporate data analytics, these audits are more effective than human auditors
ESG Controller in Corporate Governance
As the world increasingly prioritizes sustainability, a new role is emerging in the corporate landscape: the ESG (Environmental, Social, and Governance) controller. This position is rapidly gaining traction as organizations recognize the urgent need for transparent and accountable sustainability reporting. In a climate of heightened regulatory scrutiny and evolving stakeholder expectations, the ESG controller is poised to become a cornerstone of corporate finance, bridging the gap between financial integrity and sustainable practices. Why Are ESG Controllers Becoming Essential for Modern Corporations?The ESG controller oversees the development of corporate ESG reporting procedures, bridging finance, legal, and sustainability functions to navigate compliance complexities and ensure accurate sustainability disclosures. As non-financial reporting regulations multiply, organizations increasingly recognize the importance of applying
Treasury’s New Approach to Illicit Finance
In an era marked by globalization and rapid financial innovation, the battle against illicit finance has become increasingly crucial for governments and financial institutions worldwide. On August 28, 2024, the U.S. Treasury Department announced two significant regulations aimed at bolstering anti-money laundering (AML) efforts in real estate transactions and among investment advisers. These measures represent a concerted effort to enhance transparency, curb illicit financial flows, and ensure compliance with AML standards. The Scope of the New RegulationsThe first regulation targets real estate transactions, which have long been viewed as a prime avenue for money laundering. Criminals often use complex structures, including shell companies, to purchase properties anonymously, thereby obscuring true ownership and
Cost Segregation Tax Strategies
Cost segregation tax strategies can help property owners accelerate depreciation, reduce taxable income, and maximize savings. One of the most widely used tax strategies among property owners is cost segregation which helps taxpayers maximize their depreciation schedule and access to greater tax savings. Breaking down a property into parts with different lives allows owners to quick deductions of qualifying assets, lower taxable income and increase their cash flows. Today, we will look at the basics of cost segregation again as it applies to some wonderful benefits that can be realized with effective implementation. For those who own commercial real estate or rental property, cost segregation provides a strategic benefit to
Guidelines for Capital Improvements
Explore the benefits of Qualified Improvement Property (QIP) deductions for your business by maximizing tax savings. Stay informed on regulations to optimize your financial strategy. Qualified Improvement Property (QIP) refers to improvements made to the interior of nonresidential real property, such as upgrades to a retail space or restaurant. Under the Tax Cuts and Jobs Act, QIP is eligible for a 15-year depreciation period, allowing for a straight-line deduction over that timeframe. Additionally, if the improvements were made after September 27, 2017, they may qualify for 100% bonus depreciation, enabling businesses to deduct the full cost in the year the improvements are made. However, it’s important to consult with a
State Income Tax
States that may have filing requirements for Corporate Income Tax: California Alabama Arizona Arkansas Colorado Delaware Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina Utah Vermont Virginia West Virginia Wisconsin Wyoming Washington, D.C. States with no Corporate Income Tax Nevada Ohio South Dakota Texas Washington Wyoming Individual State Income Tax States that may have filing requirements for Personal Income tax: California Alabama Alaska Arizona Arkansas Colorado Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts