The Small Balance Intersection Update - September 3, 2024

Main Street

Protecting Main Street: The Fight to Keep the Small Business Tax Deduction

In an op-ed, NFIB State Director Chad Heinrich warns that the expiration of the 20% Small Business Deduction in 2025 could result in one of the largest federal tax increases on small businesses in recent history. He emphasizes that losing this deduction would significantly disadvantage Main Street businesses compared to large corporations, potentially leading to halted growth, job cuts, and closures. Heinrich urges Congress to pass the Main Street Tax Certainty Act, a bipartisan bill that would make the small business deduction permanent, providing much-needed stability and predictability for small business owners. He notes that while some Arizona congressional delegates support the bill, there are still key holdouts, including Senator Mark Kelly. Heinrich concludes by stressing that supporting small businesses ultimately benefits everyone.

For more details, you can read the full op-ed here.

Best Business Opportunities Ahead

Top States for Small Businesses in 2024

Lendio's latest analysis highlights the best states for starting a small business in 2024, amidst a record-breaking 5.5 million new business applications. Florida, Texas, and North Carolina top the list, thanks to low taxes, strong business funding, and significant population influxes. Conversely, Hawaii, New Hampshire, and Nebraska rank lowest due to high costs of living, fewer local business incentives, and limited access to venture capital. Florida claimed the top spot, driven by mass migration, favorable tax rates, and high small business loan approval rates. Notably, Massachusetts boasts the highest venture capital per $1 million GDP, while Ohio offers one of the lowest corporate tax environments. The study also emphasizes the importance of factors such as educated worker migration, cost of living, and state-level incentives in determining the best locations for small businesses. Entrepreneurs are encouraged to carefully weigh these factors when deciding where to establish their ventures.

For a detailed overview, you can read the full article here.

Tax Relief Avenue

Six Essential Tax Strategies Every Multifamily Property Owner Should Know

Are you maximizing your tax savings? In the competitive world of commercial real estate, multifamily property owners have access to powerful tax strategies that can drastically reduce liabilities and enhance cash flow. From accelerating depreciation through detailed cost segregation studies to leveraging the 45L and 179D tax incentives for energy-efficient buildings, these strategies are designed to boost your return on investment. Additionally, understanding the nuances of Tangible Property Regulations and Pass-Through Entity tax provisions can further optimize your tax position.

The Solar Investment Tax Credit (ITC) offers another lucrative opportunity, providing significant savings for installing solar energy systems on your properties. However, these benefits come with complexities, including stringent documentation requirements and the need to navigate varying state regulations. By partnering with knowledgeable tax advisors, property owners can ensure they're fully capitalizing on these opportunities while staying compliant with evolving tax laws.

Bad Actors Way

Two Major COVID-19 Relief Fraudsters Plead Guilty in Multi-Million Dollar Schemes

Two significant cases of COVID-19 relief fraud have led to guilty pleas, highlighting the ongoing efforts to combat financial crimes related to pandemic relief programs. Roy L. Layne, an Arizona resident, admitted to wire fraud and filing a false refund claim after fraudulently obtaining over $850,000 through the IRS and SBA programs, including the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. Layne's scheme involved fabricating business documents and tax forms to secure loans for non-existent businesses and filing false tax returns to claim nearly $7.5 million in refunds. He faces up to 30 years in prison for each wire fraud charge, with sentencing set for February 2025 .

In a separate case, Craig David Davis of California pleaded guilty to defrauding multiple CARES Act programs, including the PPP and Main Street Lending Program (MSLP), of more than $10 million. Davis falsely represented his company, Bright Vanguard LLC, as a legitimate business, using falsified tax returns and payroll documents to secure loans. Additionally, Davis was involved in a broader scheme that defrauded commercial lenders out of over $60 million by submitting fake invoices for non-existent equipment. Davis faces up to 20 years in prison, with sentencing scheduled for December 2024 .

For more details, you can read the full articles here and here.