Published on February 03, 2021
Many businesses are wondering how they’ll survive 2021. When Len Rus, CPA, joined me on the firm’s video series, Next Level, he shared his advice for business owners on making it through what’s looking like another crazy year.
Below are just a few of the takeaways from our conversation. To hear more from Len, including his journey from intern to managing partner, check out his full interview on Next Level here.
Len’s biggest warning for business owners in 2021: don’t get complacent. “Don’t assume things will return to normal,” he said. Len urges business owners not to push off company decisions or changes in the hope that everything will snap back to how it was before the pandemic.
“Businesses need to continue to be prepared to pivot every day,” Len said. Throughout 2020, there was a constant string of new pronouncements from federal, state and local governments. These changes are likely to continue throughout 2021, so keep your eyes and ears open. Business owners need to stay cognizant of how new pronouncements will affect their company, operations and staff, and be ready to act quickly.
Many businesses are wondering when the Biden-Harris administration will start talking tax reform. Len’s prediction? It’ll be awhile.
“The Biden administration has a lot on its hands,” Len said. “They have a very big agenda. They set out their hundred days. I'm not sure tax reform is going to be a big thing on their plate.”
With the pandemic and the economy taking up the administration’s attention, tax reform isn’t likely to enter the picture until the country makes major progress in overcoming COVID-19.
“There’s no question that the administration is going to have to pay for all the things that they have on their agenda,” Len said. “There certainly will be eventual changes to income tax rates and the state tax exemption now that both the House and the Senate are under Democrat control.”
The economic recovery packages, programs and grants of 2020 have left many businesses with a big headache as they tackle their taxes this year. Unfortunately, Len predicts those tax headaches might stick around a bit longer. “2021 will likely be another crazy tax year as 2020 was,” he said.
A big question now is whether federal and state authorities will push back tax filing deadlines this year like in 2020. “My gut is that they don’t want to push back the deadline,” Len said. “They want to collect that tax money as quickly as possible.” However, with the rapid spread of COVID-19 and the challenges of rolling out the vaccine, Len predicts government agencies are going to have to adjust the tax deadline.
“Right now, there are still 10 million paper tax returns from 2019 that still haven't been processed at the IRS,” Len said. “How are they going to do 2020 returns if they haven't finished 2019 yet?”
To ensure your business and personal returns are processed sooner rather than later, Len encourages everyone to e-file this year.
It’s been a long year for business owners, but Len encourages people not to lose hope. “We're going through a lot of changes in 2021,” Len said. “Your determination, no matter what this year brings, will make it a good or bad year.”
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Published on February 03, 2021