Maximize Your Employee Retention Credit, Minimize Audit Risk - Torchlight Tax 702-463-1818

Описание: Get a free consultation on how to maximize your Employee Retention Credit and minimize audit risk.
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HOW TO MAXIMIZE YOUR EMPLOYEE RETENTION CREDIT (ERC OR ERTC) AND MINIMIZE AUDIT RISK
This video shows the employer how he can ensure his employee retention credit submission is correctly done, so his ERC is safely maximized.
Many eligible employers are getting the maximum $26,000 per employee on their 2020-2021 payroll. If you had over 500 full-time employees in 2020-2021, you are not eligible for the ERC as discussed here.
Also, only employers are eligible for ERC. Employees are not eligible for ERC.
In maximizing ERC, one needs to make sure that all eligible employees are included, all eligible quarters are taken, and that company funds spent on health insurance are properly included.
One must also minimize the effect of forgiven PPP (Payroll Protection Program) loans that reduce the credit by allocating the forgiven PPP loan, as much as possible, to allowable non-payroll expenses.
One needs to be meticulous and precise in all the paperwork. The maximization is in the details.
If you, as an employer, have any questions about this, please go over this with us at Torchlight Tax.
We have found that handling the employer’s questions gives him peace of mind. The ERC was created by the CARES Act in 2020, and modified three times in 2021 by Congress, and signed into law by the president. The IRS has provided Guidance on how they interpret the ERC.
We make sure the ERC submission complies with the CARES Act, as amended, and also complies with IRS Guidance. and confirm how the employer will qualify.
Crossing one's fingers and hoping the IRS does not audit you, is a losing approach. It violates Murphy's law!!
Far better to make sure that you have followed IRS Guidance and have a submission that is impervious to an IRS audit.
The best defense against an IRS audit is submitting for the ERC only if you qualify, and transparently documenting how you qualify.
This does NOT mean you leave money on the table.
A manager/employer is responsible to the owners and the firm, whether a sole proprietor, partnership, or a corporation. If eligible for the ERC, the employer should apply for, and get the ERC.
Our position is that there is a maximum amount of ERC you qualify for, and that our job is to analyze your situation and document that maximum amount, so that you can safely receive it.
If you had employees in 2020 and 2021 and experienced a negative impact on your business due to COVID-19 governmental orders, you very likely qualify.
But you must make sure that you frame your ERC qualifications in a way the IRS will agree to.
For example, the fact that you lost money does not qualify you. However, if in a 2020/2021 quarter, you were only able to produce less than 90% of goods and services that you had produced in a corresponding 2019 quarter, and this was the result of modifications required by COVID-19 governmental orders, then, that would be a qualifying point.
Yes. That's probably why you lost money!!
The IRS guidance does not say if you kept your employees on payroll and lost money you qualify, but it does say that if COVID-19 governmental orders required modifications at your business that resulted in a greater than 10% reduction in your ability to deliver goods and services, you qualify.
The CARES Act and IRS Guidance are complex. Bookkeepers, general tax preparers, and payroll specialists rarely have much experience in reading and understanding Tax Law, IRS Guidance, and related IRS Regulations.
EAs, CPAs, and Tax Attorneys who have studied up on the ERC, are familiar with the Tax Code, IRS regulations, IRS guidance, and have significant experience in defending clients under IRS audit.
These are best qualified to ensure your ERC submission is impervious to an IRS audit.
IRS audits are dangerous to the ill-prepared.
There is a common misunderstanding amongst the public and even second-tier tax professionals as to how the IRS operates.