We had another unusual year, but the prevalence of vaccines and signs of business and economic recovery provided plenty of relief after the disruption of 2020. When we look back at our five most-read accounting, tax, and financial advisory stories from 2021, we see plenty of reason for optimism along with an emergence of new challenges and opportunities for the year ahead. Below are our takeaways from the top stories:
PPP Compliance May Be An Ongoing Concern
In 2020, Paycheck Protection Program (PPP) loans were popular, and Congress had to allocate more money fairly quickly after the initial rollout of the potentially forgivable government loan program. However, achieving loan forgiveness proved complicated, and companies started to feel the challenge of their reporting obligations this year as forgiveness application deadlines hit. We addressed some of the most common and pressing concerns after receiving hundreds of PPP-related questions during a much-viewed webinar. Our Q&A article delves into some of the specific challenges loan recipients may face. Read more
Following the Fate of Estate Planning
During his presidential campaign, President Biden strategized raising taxes on wealthy individuals to help pay for social programs and other priorities. His legislative outline, released in the Treasury Department’s Green Book in the spring, raised the possibility of increasing individual tax rates, lowering the estate tax threshold and eliminating a step-up basis in assets inherited from a decedent. As a result, wealthy Americans flocked to take advantage of popular estate planning strategies before it was too late. One of those tools was the Spousal Lifetime Access Trust (SLAT). With the prospects for additional legislation pushed into 2022, it may be worth brushing up on the use of SLATs with this helpful primer. Read more
Learning the Intricacies of the ERTC
One of the most valuable COVID-19 relief efforts for businesses affected by the pandemic disruption was the Employee Retention Tax Credit (ERTC), which offset the costs of retaining headcounts. The ERTC was a more significant credit this year than in 2020, but it also came with complex and confusing accounting considerations. Our team broke down how to account for the ERTC in this resource. Read more
The M&A Market Gets Hot
Not every business experienced disruption from the pandemic, and some were able to take advantage of the low interest rates to step up their deal making. In 2021, the market saw a surge in mergers and business acquisitions. Companies looked to take advantage of the current environment as a way to grow their business, expand in new markets, and stay afloat during the aftermath of the pandemic. However, buyers have complex accounting to consider when it comes to deferred revenue, which can be simplified by early adopting this new accounting standard. Read more about deferred revenue accounting here, and the early adoption of the accounting standard here.
Looking at State and Local Taxes
The tax reform law known as the Tax Cuts and Jobs Act (TCJA) created a limitation on the amount that individuals could deduct for state and local taxes (SALT), which was deeply unpopular in high tax states. So, states got creative about how to circumvent the limitation, and when the IRS gave its blessing on the maneuver, the nation saw an increase in SALT cap “workarounds.” Here is what your organization should consider before electing to use an election that could mitigate the negative effects of the SALT limitation. Read more
As we face the new year, the world is still recovering from COVID-19 and its effects on every aspect of society. There are many challenges ahead for companies in 2022, but there will also be opportunities to thrive with careful planning and execution. As a business owner or executive looking to stay competitive during this time of uncertainty, it's important that your company has a trusted advisor by your side who understands how tax reform impacts businesses now more than ever before. Contact one of our experts to learn how we can best serve your needs as the demand continues to grow into the new year.
Published on December 20, 2021