Small Businesses and Freelancers – These Tax Credits Are For You

You may not have heard, but last week was National Small Business Week, which has been an event sponsored by the United States Small Business Administration (the SBA) to honor our country’s top small businesses for over 50 years. So, in honor of Small Business Week, we are going to take a little time to discuss some important employer credits that are available to small business owners and self-employed individuals during the coronavirus pandemic.  

In this article, we are going to cover a number of employer credits to make sure that your small business owners and freelancers are able to save some money and keep your businesses running as the pandemic continues. If, after reading this article, you would like to discuss your own tax circumstances, we invite you to call Sarasota, Florida tax defense attorney Mary E. King.  

The Law Office of Mary E. King , P.L. can make sure that your tax issues are resolved efficiently and at the lowest cost to you. Please fill out our online contact form , or call us at 941-906-7585 today.

The U.S. has roughly 30 million Americans claiming unemployment benefits. That is a historically high number.  Thus, it is no small feat to keep the employees in your small business on the payroll. Employee Retention Credit is a way to do that.

The Employee Retention Credit is a refundable tax credit that is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by Covid-19. The credits are available to all employers regardless of size, including tax-exempt organizations. However, if you are a small business that has taken small business loans you may not be eligible for this credit.

Let an experienced tax attorney help you and your business figure out if you are an eligible employer for this credit. Your lawyer can help you determine whether your business fits the definition of being “financially impacted” by Covid-19. Given the extent of the economic damage from the pandemic, it is highly likely that your small business would apply.

The purpose of the Paid Sick Leave Credit is to ensure that businesses get credit for employees who are unable to work (including an inability to telework) because they are under coronavirus quarantine, are under self-quarantine, or have coronavirus symptoms and are actively waiting for a medical diagnosis. The employees eligible for Paid Sick leave are entitled to 10 days (or 80 hours) of pay at their regular wage, up to $511 per day, or $5,110 in total.

In addition, employers can obtain a credit for employees who cannot work because they are caring for someone who has the coronavirus, or taking care of children because their children’s daycare or school is closed because of the virus. Employees in that situation can get paid sick leave for up to two weeks at two-thirds their regular pay, or up to $200 per day and $2,000 total.

Congress passed an extension to the regular Family and Medical Leave Act for the coronavirus. Accordingly, employers will get credit from the federal government for paying extended paid family and medical leave benefits. The pandemic-related paid family and medical leave are two-thirds of the employee’s regular pay, up to $200 per day and $10,000 total.  Employees can get up to 10 weeks of leave under this Family Leave Credit.  

Employers typically have the most difficulty understanding how to obtain this federal credit. That is why a tax attorney could be helpful to ensure that your business is able to obtain all the credits available to it. But, in a nutshell, employers can immediately reimburse themselves for the above credits by simply reducing the amount of payroll tax owed to the government by the amount of the appropriate credit. In other words, the amount in credit that employers are owed can simply be retained by the business, rather than paid in payroll taxes to the government.  

Of course, employers need to be sure an file the proper forms with the Internal Revenue Service (IRS) to make clear that they are claiming the appropriate credits, listed above. 

We are all struggling through this pandemic that does not seem to have any end in sight. Thus, small businesses and self-employed individuals can benefit from any tax credits available to them.  

Consider reaching out to an experienced Sarasota tax defense attorney to help you get the money owed to you.  Tax matters can be complicated, and thus, it is always helpful to have someone in your corner who understands the tax law and deals with the IRS on a regular basis. Indeed, beyond just the stimulus payment from the IRS, there could be other issues with which a seasoned tax attorney can help.  

So, when it comes to dealing with tax relief and tax litigation, you need to talk to a Sarasota tax defense attorney who can help. Mary E. King has spent her career concentrating on tax law and can help you with tax scams in Florida and elsewhere. Attorney King has a wealth of information about what types of options would make the most sense for you and your business.

That helps explain why she’s received an A+ rating from the Florida Better Business Bureau. If you have a tax-related issue – no matter how small or how large – setting up an initial consultation with Mary E. King, tax lawyer of Florida, is the first step you should take towards relief.

The Law Office of Mary King P.L. offers complete IRS problem-solving services including all areas from tax debt settlement to planning the most efficient tax strategy for individuals and businesses. Call us today to schedule an initial consultation. With years of experience as a tax lawyer in Sarasota for many clients, Attorney Mary E. King can make sure that your tax issues are resolved in your favor. Fill out our online contact form , or call us at 941-906-7585. Remember, at the Law Office of Mary E. King, we are focused on solving your tax issues for good.