Many businesses struggled to turn out a profit or even mitigate losses throughout 2020. Fortunately, the government passed various articles of legislation within the last year in order to help businesses start on the path of financial recovery. During this episode of The Tip Share, RASI Compliance Director, Brian Smith, walks RASI New Business Strategist, Dave Downs, through the most beneficial legislative updates within the last year that all restaurant operators should know about, including NOL Carrybacks provisioned under the CARES Act.
What does NOL mean and what is a NOL Carryback?
Within the last year, the government reinstated NOL Carrybacks as provisioned under the CARES Act. A NOL is a net operating loss that occurs in a trade or business when deductions are greater than income; essentially, a loss used to reduce taxable income in a previous tax year.
A net operating loss that occurred in 2018, 2019, or 2020 can now be carried back 5 years; any unused portion of the loss can be carried forward indefinitely until it is reduced to 0.
Como as transportadoras de NOL podem e a Lei de Cuides beneficiar os restaurantes? Os contribuintes com perda operacional líquida foram forçados a esperar até que houvesse lucro nos anos futuros para perceber que o benefício da perda operacional líquida. A capacidade de trabalhar dentro de um intervalo de cinco anos para carrybacks ajudará um empresário a recuperar alguns dos impostos pagos, e o contribuinte não precisará mais esperar que os lucros futuros compensem a dedução. Além disso, com as mudanças na Lei de Cuides, a limitação anterior implementada pelos cortes de impostos e da Lei de Empregos aumentados, o que restringiu a dedução da NOL a 80% da renda tributável. Alterações
The Tax Cuts and Jobs Act of 2017 initially repealed the Net Operating Loss Carryback and only allowed a taxpayer to carry forward their NOL indefinitely until the loss reduced to 0. However, when the Carryback was repealed, taxpayers with a Net Operating Loss were forced to wait until there was a profit in future years to realize that benefit from the Net Operating Loss.
Now, a taxpayer can utilize the last 5 years and offset taxable income with that NOL deduction. The ability to work within a 5-year range for carrybacks will help a business owner recoup some of the taxes paid, and the taxpayer will no longer have to wait for future profits to offset the deduction.
This could prove very beneficial to a business that does not expect to be profitable in the next few years but was profitable in the past. Additionally, with the changes in The CARES Act, the previous limitation put in place by the Tax Cuts and Jobs Act lifted, which restricted the NOL deduction to 80% of taxable income.
WATCH TO THE FULL VIDEO BELOW:
Example of the impact from changes within NOL Carrybacks:
Pre-CARES Act Changes:
- Em 2020, uma empresa teve uma perda operacional líquida de US $ 100.000. O rendimento tributável só pode ser reduzido em US $ 80.000.
- That loss carries forward to 2021 and beyond to reduce future taxable income.
- This same business has a taxable income of $100,000 in 2021.
- The taxable income can only be reduced by $80,000.
- The taxpayer still has a $20,000 taxable income, even though they had enough Net Operating Loss in the prior year to offset 100% of their income because their NOL deduction was limited to eighty $80,000 or 80%.
ACTURA POST CARROS MUDANÇAS:
- O mesmo negócio do nosso exemplo tem uma perda de US $ 100.000 em 2020.
- Com as alterações na Lei de Cuidados, não é mais necessário que o proprietário da empresa aguarde o valor futuro. 2015.
- The same business had a taxable income of $100,000 in 2015.
- O NOL de transporte atualizado agora reduz a receita tributável em nosso ano de transporte de 2015 para US $ 0. No ano seguinte, para reduzir sua receita tributável. Exemplo de uma situação em que um proprietário de uma empresa não se beneficia da legislação atualizada da NOL de transporte:
- The tax return for 2015 is recalculated and any overpaid tax, according to the new calculations, is refunded to the taxpayer.
- This enables the business owner to immediately realize the benefit when they’re filing their 2020 taxes without having to wait until the next year to reduce their taxable income.
Why would a business owner not apply the Carryback provisions as outlined under the CARES Act?
As with all tax implications, there are exceptions to the rules; Example of a situation where a business owner does not benefit from the updated NOL Carryback legislation:
Uma perda operacional líquida é transportada de volta; portanto, a receita tributável e tudo o que é associado a ele (créditos tributários, deduções de IRA dos proprietários etc.) são recalculadas. Este recalculação pode criar uma situação em que o contribuinte perde um crédito tributário calculado anteriormente. Prática
Additionally, the creation of an Alternative Minimum Tax liability in the carryback year essentially reduces the amount of refund that the taxpayer can realize from a net operating loss deduction that’s carried back to 2015.
BEST PRACTICE: Procure o conselho do seu preparador de impostos confiável; Eles saberão exatamente como a legislação atualizada pode afetar os impostos de um empresário em sua própria situação única. VENDAS
