Allied Tax Advisory Group

Our office is getting a great number of calls regarding the new Student Loan Forgiveness Program and I thought I'd share some of the key points here:

- There is an automatic continued pause on federal student loan payments through January 2023.
- To qualify for this plan, your income must be below $125K if your filing status is single ($250K if you file as Married Filing Joint or Head of Household).
- The relief is up to $10K ($20K if you received Plan Grant in College).
- This is NOT refundable; which means, the debt relief is up to the balance due on your federal tax return (does not include State).
- Income-Based Repayment Plans (IBR) have been modified and improved.
- Public Service Loan Forgiveness (PSLF) is still available through 10/31/2022.
- The debt forgiven is NOT taxable under IRC. Sec. 108(f)(5) for federal purposes, but it's not 100% clear how the states will treat this.

There is a great deal of planning opportunities around this area and highly encourage you to work with your tax advisor to take full advantage of this.

As always, this information is only intended for informational and educational purposes and is not intended to be Legal or Tax Advice.

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California’s AB150 has created an elective tax that allows the taxes on pass-through income to be paid at the entity level! This means shareholders / members can plan around the applicable federal cap limitation. California Pass-through entities (and some other state) S corporations can effectively avoid the $10,000 SALT deduction limit by making this election. Please make sure to get in touch with us for more information.

Most of our business clients wish they could slap their previous CPA for NOT helping them with tax planning and leaving so much money on the table!

Full Disclaimer, we don't condone violence. After all, we're just a bunch of tax nerds!

As a small business owner, you should really find time and understand how you can reduce your biggest expense! But first, do you know what your biggest expense is?

Taxes! That's right, good old uncle same is your silent but deadly partner! And your CPA isn't trained to help you with tax planning. They're too busy trying to fill in the boxes on your 1040! So do yourself a favor and .

According to Fundera, small businesses (businesses with fewer than 500 employees) account for 99.7% of all businesses in the US., totaling $9.4T in economic activity! But sadly, according to the SBA, “about 20% of small businesses fail within the first year, by the end of the 5th year, about 50% of them no longer exist." In summary, it is much easier to start a business than to remain in business.

According to a U.S. Bank study, a whopping 82% of businesses that failed cited cash flow problems as a factor in their failure. Remember that cash flow doesn’t just mean the amounts of money that are coming in and out: you have to take timing into account, too. If you operate a business based on an invoicing system, for example, and your invoices aren’t paid until after your loan payments are due, you might end up with a cash flow problem.

Hiring a bookkeeper, using accounting software like QuickBooks, and working proactively with your accountant can all also help to keep your cash flow in check.

Filing Deadline Rapidly Approaching for Flow-Through Entities. The federal income tax filing deadline for calendar-year partnerships, S corporations, and limited liability companies (LLCs) treated as partnerships or S corporations for tax purposes is March 15th.

If you haven’t filed your partnership or S corporation return yet, you may be thinking about an extension. The maximum extension is six months (until September 15).