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Here’s What Happened in the World of Small Business in July 2021
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Here are five things that happened this past month that affect your small business. 1) The G20 backed historic corporate tax reform at the latest summit. Another step forward for proponents of a global corporate minimum tax: At the first face-to-face G20 meeting since the start of the pandemic, “a landmark proposal to stop multinational companies from shifting profits to low-tax havens was endorsed.” (Source: Yahoo! Finance) Why this is important for your business: Companies with international operations would see changes to their taxation under this proposal ¬– but it’s still a long way from being adopted. Stay tuned. 2) The US recession actually lasted only two months. While difficult times for many individuals and small businesses lasted much longer (and for some are still continuing), “the U.S. recession touched off by the coronavirus lasted only two months, ending with a low point reached in April 2020 after the start of a sharp drop in economic activity in March of that year.” (Source: Reuters) Why this is important for your business: While the country had “by no means gotten back to normal operating capacity at that point,” it is helpful to be aware that the recession was the shortest on record. This may feed arguments in favor of the “cash first” approach policymakers took, including the extensive financing for small businesses. 3) Restaurant workers are quitting at a record rate. There are a variety of reasons – including the high-stress culture – but pay is high on the list. “Low wages are the most common reason people cite for leaving food service work. But in one recent survey, more than half of hospitality workers who've quit said no amount of pay would get them to return.” (Source: NPR) Why this is important for your business: If you operate in any sectors related to the restaurant industry, you’ve no doubt encountered businesses who are having staffing difficulties. Some may choose to raise wages, while others might wait it out to see if things revert to “normal.” 4) The economy is expected to cool off going forward. “The U.S. economy’s 2021 growth surge likely peaked in the spring, but a strong expansion is expected to continue into next year,” said economists surveyed by The Wall Street Journal. The bounce back from the recession prompted “red-hot” growth, but that burst is expected to slow. (Source: The Wall Street Journal) Why this is important for your business: This isn’t a bad thing. We’re past the peak for economic growth and have moved “into the more moderate phase of expansion.” Job gains, personal savings, and fiscal support are expected to keep the economy growing solidly over the next year. 5) During the pandemic, 1 in 5 business owners were on the brink of closing forever. A new study by OnePoll found that “One in five small business owners came frighteningly close to shuttering their business for good during the COVID-19 pandemic.” Additionally, 3 in 4 respondents said the past year was the most difficult they’ve ever faced in the life of their business. (Source: Study Finds) Why this is important for your business: If you’re one of these business owners, it’s helpful to know you’re not alone.
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Tax and Financial Insights
by NR CPAs & Business Advisors
2026 IRS Mileage Rates: Key Updates and Insights
The IRS has rolled out the inflation-adjusted mileage rates for 2026, offering taxpayers an efficient way to claim deductions for vehicle-related expenses incurred for business, charity, medical, or moving purposes. These adjustments reflect the continued economic shifts impacting car operation costs.
Effective January 1, 2026, the new standard mileage rates are established as follows:
- Business Travel: Increased to 72.5 cents per mile, inclusive of a 35-cent-per-mile depreciation allocation. This marks a rise from the 70 cents per mile rate set for 2025
- Medical/Moving Purposes: Reduced slightly to 20.5 cents per mile, down from 21 cents in the previous year, reflecting the variable cost considerations.
- Charitable Contributions: Consistent at 14 cents per mile, a fixed rate unchanged for over a quarter-century.
As is typical, the business mileage rate considers the integral fixed and variable costs of automobile operation. Meanwhile, the medical and moving rates remain contingent on variable expenses as determined by the IRS study.
It is critical to note that the One Big Beautiful Bill Act (OBBBA) held firm on disallowing moving expense deductions except for specific cases within the Armed Forces and intelligence community, marking a substantial shift since 2017.
When engaging in charitable work, taxpayers might opt for a direct expense deduction over the per-mile method, covering gas and oil costs. However, comprehensive upkeep and insurance costs are non-deductible expenses.
Business Vehicle Use Considerations: Taxpayers can alternatively compute vehicle expenses using actual costs, which might benefit from shifting depreciation rules, particularly through bonuses and first-year advantages. Keep in mind, however, reverting from actual cost calculations to standard rates in subsequent years is restricted, particularly per vehicle protocol and when exceeding four vehicles in concurrent use.
Additionally, parking, tolls, and property taxes attributable to business can be deducted independently of the general rate, an often-overlooked advantage by many business owners.
Tax Strategies for Employers and Employees: Reimbursements based on the standard mileage framework, providing the right documentation is in place, remain tax-free for employees. Meanwhile, the elimination and continued prohibition of unreimbursed employee deductions continue, with particular exceptions offered to qualified personnel across specific occupations.
Opportunities for Self-employed Individuals: Entrepreneurs remain eligible for deductions on business-related vehicle use via Schedule C, with potential to account for business-use interest on auto loans.
Heavy SUVs and Deduction Advantages: Heavier vehicles exceeding 6,000 pounds but under 14,000 pounds open opportunities for substantial tax deductions through Section 179 and bonus depreciation avenues. The lifecycle of such a vehicle bears implications on recapturing initially claimed deductions, urging cautious tax planning.
For professional guidance on optimizing your vehicle-related tax deductions and understanding their implications on tax strategies, contact our office in Coral Gables, Florida, where expert advice and strategic insights are just a call away.
Educator's Deduction Reform: Key Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) introduces significant enhancements for educators' tax deductions starting in 2026, offering both strategic opportunities and planning considerations for educators who qualify. With the reinstated itemized deduction for qualified unreimbursed expenses, educators have a broader spectrum of financial relief. This is complemented by the retention of the $350 above-the-line deduction, allowing educators to maximize their tax benefits by selectively allocating expenses between these avenues.
Understanding the nuances of these changes is crucial for educators and financial advisors alike. The dual-option deduction strategy can potentially enhance tax efficiency, thereby aligning with broader financial planning goals.
At NR CPAs & Business Advisors, based in Coral Gables, Florida, our expertise in tax preparation and planning provides invaluable support to educators navigating these changes. Our comprehensive approach, combined with personalized advice from our experienced team, ensures compliance and optimization in line with the latest tax legislations.
Given these updates, it is imperative to engage with seasoned professionals to fully leverage your deduction strategies. Contact us today to streamline your tax planning under OBBBA's new guidelines and maximize your deductions for upcoming tax years.
