small business cpa

Small Business CPA Reveals Cash Flow Opportunities

As a small business CPA, we have all the inside info on how you can improve your cash flow. In fact, new tax law provides cash injection for better cash flow. All you have to do is take advantage of the opportunity. 

The IRS has finally given small businesses some relief! And your small business CPA should know how to help you capitalize on it. 

Quick Cash From the IRS: COVID-19 CARES Act Creates Five-Year NOL Carryback

CARES Act Provides Potential Cash Flow Opportunities for Businesses with Net Operating Losses

Nobody wants their business to generate a net operating loss (NOL).

But if your business is showing an NOL, Congress is currently offering some significant help.

In 2017, The Tax Cuts and Jobs Act (TCJA) took away your ability to get an immediate cash benefit from your NOL.

But the law has just changed!

Due to the COVID-19 pandemic, Congress has temporarily restored your ability to get an almost instant refund from your NOL. Your small business CPA can help with this.

1. NOL rules. Before tax-year 2017, you could carry back your NOL for two years and take it forward for 20 years. What’s more, your NOL could offset up to 100% of your taxable income. That was helpful. Then the TCJA made significant changes to the law that delayed your ability to get tax savings from your business losses.

2. New temporary NOL rules. The CARES Act, recently passed by Congress, suspends the TCJA limitation on your NOLs for the tax years beginning in 2018, 2019, and 2020.

This means (under new rules) you can carry back your NOL for five years and carry it forward indefinably!

What’s more, you can apply 100% of the loss.

You’ll learn how to benefit from the new laws when you meet with me, your small business CPA.

3. Claim your refund. The best way to claim your refund from an NOL carryback is to use the “tentative” refund procedure. If you qualify to claim your refund, you’ll take advantage of two huge benefits.

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Conclusion

The five-year carryback will give a welcomed injection of liquidity to many businesses strained by the adverse impact of the COVID pandemic. The relief, however, is only temporary. NOLs arising in tax years beginning after 2020 do not have a carryback period, except for a two-year carryback for farming losses. An unlimited carryforward period continues to apply to all post-2017 NOLs.

Let us be your small business CPA. We can take care of your tax and accounting so you can concentrate on what you do best, running your business!!! Let’s discuss more in a strategy session. Book Your Free Assessment Here.