We get it – as a business owner, anything to do with taxes can be incredibly intimidating. And filing for a tax credit like the Employee Retention Credit? That’s on a completely different level. A lot is at stake. What if the IRS decides to do an audit and they determine that you need to return the funds you received? That could cost your business extra legal and tax specialist fees on top of the mandated return of funds. What a headache.
But at the same time, your business could be missing out on up to $26,000 per qualifying employee through ERC. That’s a lot of money that you can pour back into your business as you see fit! Stenson Tamaddon has already helped over 4,000 businesses receive over $3.4 billion in credits and, needless to say, we’ve seen a lot of eager business owners make mistakes in the wake of their excitement. Here are the top seven mistakes we’ve seen so you can avoid them and confidently take advantage of the credit available to your business:
Estimating Your Potential Credit Amount
When you hear an estimate of $26,000 per qualifying employee, it’s tempting to simply multiply the number of employees you have by that figure and have your heart set on a large check. However, as with most things associated with the IRS, determining how much credit your business could be eligible for is much more nuanced than a simple multiplication problem. We highly suggest consulting a tenured team of tax specialists, like the one you’ll find at Stenson Tamaddon, to clear up any confusion. Our specialists can guide you through the qualification process while maximizing your credit with minimal risk.
Mentally Disqualifying Your Business Before Consulting a Tax Specialist
Since it was first introduced, the ERC has been modified several times to expand the program to more businesses. Consequentially, business owners have been left confused about how their business can qualify and many mentally disqualify themselves before talking to a tax specialist. Like, for example, did you know that your business could be eligible for the ERC even if it didn’t start until after the beginning of 2020? Don’t walk away from money that you can decide how to pour back into your business. Reach out to one of our tenured tax specialists today to see how we can help guide you through the qualification process.
Not Being Aware of Your Local Government’s Orders During the Pandemic
A key component of the ERC is determining the impact that the COVID-19 pandemic had on your business’s operations. In order to do so, you must have extensive knowledge of your local government’s ever-changing orders and mandates during that time. Thankfully Stenson Tamaddon has a solution to help alleviate that seemingly impossible task; we have an extensive library of local emergency orders readily accessible to our tax specialists so they can help guide you through the qualification process. You will never be alone in the filing process and can count on our team of specialists to use these resources to help you maximize your credit with minimal risk.
Failing to Properly Document
Compliance is a really big deal to us and that’s because there are really big consequences if the IRS catches you not following their standards. That’s why properly documenting your tax information is crucial. Stenson Tamaddon cares about our clients too much to put them at risk of being out of compliance which is why we offer readily accessible documentation in case the IRS decides to conduct a review of your filing.
Claiming Wages that Aren’t Qualified
As we mentioned above, the ERC program has been modified several times since it was first introduced. One notable change that expanded the credit to many more businesses was when the Taxpayer Certainty and Disaster Tax Relief Act of 2020 allowed businesses who took out a Paycheck Protection Program (PPP) loan to also qualify for the ERC, but, as many things with IRS do, it came with an asterisk. Wages used to obtain PPP loan forgiveness can not also be used to file for the ERC. While it can be intimidating to determine which wages are qualified, our proprietary technology was built to help you through the process.
Not Being Up to Date on the Latest ERC Updates
The ERC has gone through several changes since its introduction in the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020. For example, did you know that you could be eligible for the ERC even if you also received Paycheck Protection Program (PPP) loan forgiveness? This wasn’t true until the Taxpayer Certainty and Disaster Relief Act made it so. The program was expanded to provide much-needed relief to even more businesses.
Even if you don’t think you could qualify for the program, reaching out to a team of knowledgeable tax specialists could prove otherwise. You can also check out our blogs to read more about the ERC and the most recent updates.
Working with a Filing Firm that Doesn’t Prioritize Compliance
Navigating relief programs can be confusing and daunting and will often leave you with more questions than answers. It is important to file with a knowledgeable firm to ensure that your business is in good hands. At Stenson Tamaddon, our specialists have extensive knowledge in finance and assisting businesses of all sizes. We are here to make the filing process as quick and painless as possible so that your day-to-day life isn’t interrupted. Stenson Tamaddon uses compliance-based technology to ensure that you have the peace of mind that your important documents are being handled correctly and with care. We know that time is money, so let us tackle the hard part. We’ll proactively guide you through the process. Reach out to our specialists today to get started and put money back in your wallet.