With operators prepping to pay taxes for 2022, the National Restaurant Association lately held a webinar with Frost Law that supplied recommendation on get probably the most out of this yrs returns and plan correctly for 2023.
The webinar, Dont Leave Money on the Table: Commonly Missed Tax Planning Opportunities for 2022 and 2023, shared tips about:
- year-end planning for eating places, together with bonus depreciation, enterprise bills, ERTC maximization and tax planning, and
- planning for 2023 together with the work alternative tax credit score, analysis and improvement credit score, and planning for long-term sustainability
Rebecca Sheppard and Peter Haukebo, each administrators and tax attorneys at Frost Legislation, headed up the panel, which was moderated by Affiliation VP of Public Coverage, Aaron Frazier.
Our aim is to ensure these tax credit are a part of your general operational and strategic framework going into 2023, Frazier stated.
Listed below are 4 of the largest ones to construct in:
1. Worker Retention Tax Credit score. Sheppard and Haukebo started by addressing the problem of ERTC claims, which many operators took benefit of on the outset of the pandemic. These claims, nevertheless, differed from any Paycheck Safety Program cash the operation acquired, and have been by no means going to be forgiven by the federal government like PPP claims have been. Now, because the IRS seems at ERTC claims, restaurant homeowners who acquired the credit should ensure they’ll show the credit claimed have been sound or danger being audited and being made to repay them.
This isn’t like PPP, Haukebo stated. It is not a state of affairs the place the federal government is reviewing and blessing your declare. They’re numbers, and if you do not have a very good sense of what went into these numbers, thats one thing you wish to have a look at and be prepared to elucidate earlier than the IRS is available in and audits you. As a result of thats what were beginning to see.
Sheppard added that on the very least, operators ought to ensure they perceive what they’ve claimed, and why they assume theyre eligible, plus have prepared entry to all of the paperwork to again up their claims. If there are any points, amend, right and repay them to keep away from doubtlessly harsh penalties and curiosity on these credit, she stated.
2. FICA Tip Credit score. Sheppard and Frazier stated operators who arent benefiting from the tip credit ought to begin doing so now. In case your tipped workers made above the federal minimal wage ($7.25/hr.), it’s possible you’ll be eligible for the FICA Tip Credit score. Frazier indicated that quickservice and fast-casual chains are offering clients the choice to tip workers on touchscreens and thru apps. That is one thing thats beginning to evolve past the normal fullservice mannequin and must be thought-about while you’re doing all your tax planning, he stated.
The tip credit score is on the market, Sheppard added, so be sure you know there are benefits for you there as nicely.
3. The Work Alternative Tax Credit score. That is one other massive alternative for operators. WOTC is a federal tax credit score obtainable to employers who rent employees from sure focused teams dealing with vital boundaries to employment. It was set to run out however was prolonged to credit score wages paid or incurred for some people beginning work on or earlier than Dec. 31, 2025. The extension will give operators two extra years to benefit from this credit score.
4. Bonus Depreciation Credit score. One other sort of potential financial savings is the bonus depreciation concerning the acquisition of kit, Haukebo stated. {Dollars} on the desk are {dollars} on the desk, and you do not wish to depart them there.
Thats why its vital to determine methods to buy tools and time these purchases in a approach thats helpful for you [like at the end of the year], he continued. The bonus depreciation permits a enterprise to right away deduct a bigger share of the acquisition value of an eligible asset. Its solely relevant to sure enterprise belongings, comparable to [an oven] with a helpful lifetime of 20 years or much less.
The depreciation credit score, nevertheless, is predicted to part out in 2023, however might be resurrected in numerous laws in future, he added.
These are simply among the tax financial savings alternatives mentioned through the presentation. Obtain an On Demand recording of the total webinar, freed from cost, here.
