When the Consolidated Appropriations Act (CAA) was signed into law on December 27, 2020, it gave some additional juicy tax breaks for business owners.
The tax strategy buffet includes the following items:
- 100% Deduction for Meals Provided By Restaurants – the deduction includes take-out and sit-down food and beverage for 2021 and 2022.
- Work Opportunity Credit Extended – You can claim the WOTC for hiring members of 10 targeted groups.
- Student Loan Payments – Employer sponsored Section 127 educational plans allows for the employer to pay up to $5,250 per employee with no federal income tax hit for the employee. Employers can deduct the payments.
- EIDL Advances – Small Business Administration Economic Injury Disaster Loan advances and loan repayment assistance are not taxable, and you suffer no tax attribute reductions as a result of the tax-free monies.
- Entertainment Productions – You can elect to claim the first-year write-off for the cost of qualified film, television, and theatrical productions commencing before 2025, subject to a $15 million per-production limit or a $20 million limit for productions in certain disadvantaged areas
- Residential Rental Depreciation – For residential rental property that you placed in service before 2018 and were depreciating over 40 years under the straight-line method, you can now use 30 years if you elect out of the Tax Cuts and Jobs Act business interest expense limitations.