Author: Alexis Long

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News

ERC Credits vs. Amended Tax Returns: IRS Issues New Guidance

By Mark Puckett, CPA | Tax Principal 

The Top Line

On March 20, 2025, the IRS issued new guidance on how to handle Employee Retention Credit (ERC) refunds—specifically regarding whether businesses need to amend prior-year tax returns. The update provides long-awaited clarity and relief for businesses that were unsure about how to treat ERCs they received after filing their original returns.

This new guidance allows eligible businesses that did not reduce their wage expenses in the original filing year to instead report the ERC as gross income in the year the credit is received. For many small and mid-sized businesses, this is a simpler and more manageable solution that avoids the burden of filing multiple amended returns.

Breaking It Down – What the New IRS Guidance Means for Your Business

ERC Background: A Common Scenario

Many businesses have received—or are still awaiting—ERC refunds for qualified wages and benefits paid during 2020 and 2021. Historically, the IRS required these businesses to amend their original tax returns to reduce wage expenses by the amount of the ERC claimed, following guidance from Notice 2021-20 and 2021-49.

However, as time has passed, many clients have opted to include the ERC as income in the year it was received, unsure if this method would meet IRS standards. Until now, there’s been uncertainty and concern about penalties or invalidation of the ERC due to the lack of amended returns.

New IRS Guidance Brings Clarity

The IRS now confirms that filing an amended return is no longer required in this common situation.

Instead: Taxpayers who did not reduce wage expenses in the original year may report the ERC as gross income in the year the credit is received.

This aligns with the IRS’s tax benefit rule and avoids the double benefit of deducting wages and also receiving the ERC.

What You Need to Know – IRS FAQs Summarized

Q1: Should I have reduced my wage expense in the year I claimed the ERC?

A1: Yes, the IRS originally expected wage expense to be reduced in the year wages were paid or incurred. But the new guidance offers flexibility for businesses that didn’t do so.

Q2: What if I didn’t amend my return but received the ERC in a later year?

A2: You’re not required to amend the prior-year return. Instead, include the ERC amount as gross income in the year you receive the refund.

Example:
A business claimed a $700 ERC based on $1,000 in wages paid in 2021 but did not reduce wage expenses on the 2021 return. The IRS paid the ERC in 2024. The business may now include the $700 in gross income on its 2024 tax return—no need to amend 2021.

Other Considerations

If you capitalized wages or didn’t reduce your tax liability based on the overstated deduction, you may not need to report it as income but instead adjust your basis or other records accordingly.

What This Means for You

This guidance simplifies ERC compliance and answers a major open question for businesses still waiting on refunds. Instead of tracking down prior returns and preparing amendments, you can focus on current-year tax reporting.

Ask yourself:

  • Have you received ERC refunds after filing your original returns?

  • Did you include the ERC in income in the year you received it?

  • Are you unsure whether an amended return is necessary?

If the answer to any of these is yes, this new IRS position likely works in your favor.

Let’s Talk ERC Strategy

This is good news for businesses and advisors—especially those balancing multiple year-end adjustments. We’re here to help interpret the guidance and make sure your reporting is accurate and compliant.

Got questions? Let’s talk about how this affects your business.

Categories
Tax

Will IRS Staff Reductions Affect Filing My Taxes?

You might be wondering:

Will the recent IRS staff cuts impact my ability to file my taxes and get my refund on time? It’s a fair concern. With the IRS recently firing nearly 7,000 employees and shutting down 100 Taxpayer Assistance Centers (TACs)—and with reports suggesting even deeper cuts ahead—many taxpayers are left asking how this will affect their tax filing experience.

The IRS is responsible for processing millions of tax returns every year, issuing refunds, and answering taxpayer questions. With fewer employees, there’s a possibility of:

  • Longer processing times for refunds
  • More difficulty getting IRS assistance
  • Potential backlogs
  • Increased risk of errors

What Can I Do to Make Sure My Taxes Are Filed Without Delays?

The best way to avoid issues this tax season is to take action early. Here’s what you can do:

  • File as early as possible – The sooner you submit your return, the faster it will be processed.
  • Use e-filing and direct deposit – These methods are the quickest way to get your refund.
  • Double-check your return – Mistakes or missing information can slow down processing, so ensure everything is accurate.
  • Monitor your refund status – The IRS “Where’s My Refund?” tool can help you track your return.

Have Questions? Contact Your ATA Advisor.

If you have concerns about filing, refund timing, or how these IRS changes may impact you, reach out to your ATA advisor today.

Our team is here to help ensure your tax season runs smoothly—so you don’t have to worry.

Categories
News

The Impact of US Tariffs on Small Businesses:

Strategies for Navigating the Uncertainty

By James Duncan, International Tax Practice Leader

The Top Line

On Tuesday, March 4th, the Trump administration imposed 25% tariffs on goods imported from Canada and Mexico, along with an additional 10% tariff on goods from China, bringing the total tariff on Chinese imports to 20%. These tariffs have sparked retaliatory measures from other countries and ongoing diplomatic discussions, creating uncertainty in the marketplace.

Regardless of the outcome of these discussions, small businesses are already feeling the effects. Higher import costs, supply chain disruptions, and competitive pressures are just a few of the challenges emerging from these new policies. This article explores how tariffs are impacting small businesses and provides strategies to navigate this evolving landscape.

Breaking It Down – How US Tariffs Impact Small Businesses
  1. Increased Costs and Reduced Profit Margins

Tariffs function as taxes on imported goods, driving up costs for small businesses that rely on foreign materials and products.

For example, a small business specializing in pool installations may find that the cost of imported materials has increased, squeezing profit margins. Many businesses are unable to pass these additional costs on to customers entirely, forcing them to absorb the expenses or find alternative solutions.

  1. Supply Chain Disruptions

Small businesses depend on steady and predictable supply chains. However, tariffs can disrupt this flow by making imported goods more expensive or harder to obtain. Suppliers may face delays, increased costs, or even cutbacks in production, leaving businesses scrambling to find alternatives.

Finding new suppliers or shifting production locations is not always an easy fix—it can require significant time and investment.

  1. Competitive Disadvantages

Larger corporations often have the financial resources to absorb tariff-related cost increases, while small businesses operate on thinner margins. This puts them at a competitive disadvantage, as they struggle to maintain pricing and profitability.

Big companies may also have more leverage to negotiate better terms with suppliers, leaving smaller businesses struggling to keep up.

  1. Uncertainty and Planning Challenges

One of the biggest challenges small businesses face is the unpredictability of tariff policies.

  • Swift and unexpected tariff increases make it difficult for businesses to plan ahead.
  • Uncertainty around future policies makes long-term investments riskier.
  • Without clear guidance, businesses may hesitate to expand, hire, or invest in new technology.

This volatility creates a challenging environment for strategic decision-making.

Navigating the Challenges – Strategies for Small Businesses

Despite the obstacles, businesses can take proactive steps to mitigate the impact of tariffs:

  1. Diversify Suppliers
  • Source materials and products from multiple suppliers in different countries, especially those not impacted by the tariffs.
  • Reducing reliance on a single supplier minimizes risk.
  1. Negotiate with Suppliers
  • Engage in discussions with suppliers to explore discounts, better terms, or alternative supply options.
  • Strengthening supplier relationships can lead to more favorable agreements during economic uncertainty.
  1. Increase Domestic Sourcing
  • Shifting to US-based suppliers can help avoid tariffs altogether.
  • While domestic options may not always be cheaper, reducing dependency on international markets can provide stability.
  1. Pass Costs to Customers (Strategically)
  • While raising prices is not always ideal, businesses may gradually adjust pricing to offset tariff-related cost increases.
  • Transparent communication with customers about why prices are rising can help maintain trust.
  1. Improve Efficiency
  • Streamlining operations, reducing waste, and investing in automation can help cut costs elsewhere in the business.
  • Efficiency improvements can counterbalance tariff-related expenses.
  1. Financial Planning and Risk Management
  • Set aside financial reserves and explore financing options to maintain cash flow.
  • Having a contingency plan ensures businesses are prepared for unexpected tariff hikes.
  1. Collaborate with Other Businesses
  • Forming alliances with other small businesses can lead to shared resources and collective purchasing power.
  • Businesses facing similar challenges can work together on bulk purchasing agreements or advocacy efforts.
What This Means for You

Tariffs introduce uncertainty, but businesses that adapt and plan strategically will be in a stronger position to navigate these challenges.

If your small business relies on imported goods, consider assessing your exposure to tariffs and exploring cost-saving measures before they impact your bottom line.

  • Are your supply chains vulnerable?
  • Have you evaluated domestic alternatives?
  • Do you have a financial plan in place to absorb rising costs?

By taking proactive steps, businesses can minimize disruptions, protect profitability, and stay competitive despite shifting trade policies.

Preparing for the Future

The tariff landscape will continue to evolve, making flexibility and adaptability crucial for small businesses. Now is the time to assess risks, explore alternatives, and implement strategies to safeguard your business.

Looking for guidance on navigating tariffs? Schedule a 30 minute complimentary consultation with me by filling out our contact form.

Categories
News

The Hidden Costs of Inefficiency: Why Your Business Needs Automation Now

Barrett Gay, Digital Solutions Practice Leader

 The Top Line

In today’s fast-moving business environment, automation and systems integration aren’t just efficiency boosters—they’re competitive necessities. Small and mid-sized businesses (SMBs) often face challenges such as manual processes, disconnected systems, and scalability issue that slow growth and increase costs. Without the right technology in place, businesses risk inefficiencies that can limit their potential.

By integrating systems and automating workflows, companies can eliminate bottlenecks, reduce errors, and free up resources to focus on strategic growth. This article explores the key indicators that signal a need for automation and how businesses can take action to stay competitive in a digital-first world.

Breaking It Down – Recognizing the Need for Automation

 Repetitive, Manual Tasks Are Draining Time

Is your team constantly handling data entry, invoice processing, or inventory tracking? These routine tasks consume valuable time and leave little room for high-value work. Automating these processes can increase productivity and reduce labor costs.

Disconnected Systems Create Inefficiencies

If your CRM, accounting, and operations platforms don’t communicate your team likely wastes time manually transferring data between systems—leading to delays and costly errors.  Integrated systems ensure real-time data synchronization and smoother operations.

Your Business Is Struggling to Scale

As companies grow, outdated processes can’t keep up with demand.  If expansion means hiring more staff just to manage inefficiencies, automation can help scale operations without a significant increase in overhead.

Error-Prone Processes Are Hurting the Bottom Line 

Frequent mistakes in billing, reporting, or order processing create unnecessary rework and can erode customer trust.  Automated workflows minimize human error and ensure consistency across operations.

Compliance & Reporting Are Time-Consuming

Regulatory compliance and manual report generation can be overwhelming for businesses. Automation can streamline data collection, ensure compliance, and generate accurate reports in a fraction of the time.

What This Means for You

Every business’s journey to automation is unique, but the benefits are universal: increased efficiency, cost savings, and improved decision-making. Businesses that fail to modernize risk falling behind competitors who embrace digital transformation.

If your company faces bottlenecks, scalability challenges, or inefficient processes, it’s time to explore how automation and systems integration can enhance performance.

Don’t let outdated systems limit your growth—modernizing your operations today ensures agility, efficiency, and long-term success.

Ready to automate, schedule a 30 minute complimentary consultation with me by filling out our contact form.

Categories
Human Resources

Unlocking the Power of Fractional HR:

A Smart Solution for Growing Businesses

By Traci Tyler, HR Advisory Practice Leader

The Top Line

In today’s fast-paced business world, companies need agile, cost-effective HR solutions that can adapt to changing demands. Fractional HR offers top-tier expertise without the overhead of a full-time team, providing flexibility and strategic guidance for growing businesses.

Many small to mid-sized companies struggle to balance compliance, employee engagement, and workforce planning while staying focused on growth. Without proper HR support, businesses risk legal challenges, high turnover, and operational inefficiencies. Fractional HR provides the right level of support when needed, helping businesses remain compliant, attract top talent, and build a strong company culture.

This article explores the key reasons why businesses are turning to Fractional HR and how it can help drive long-term success.

Breaking It Down – Why Businesses Are Turning to Fractional HR

Specialized Expertise Without the Overhead

Gain access to HR professionals with expertise in recruitment, compliance, employee relations, and training—without hiring multiple full-time employees.

Cost-Effective & Scalable Solutions

Pay only for the services you need, whether it’s ongoing support, project-based work, or interim HR leadership. This model allows businesses to scale HR functions efficiently.

Compliance & Risk Management

Changing employment laws and regulations create compliance challenges for businesses. Fractional HR provides expert oversight to mitigate risks and avoid costly penalties.

Flexible & Customizable Support

Every business has unique HR needs. Whether you need temporary HR leadership or ongoing workforce support, Fractional HR adapts to fit your business requirements.

Enhancing Employee Experience

Strong HR functions improve retention, engagement, and workplace culture. Fractional HR provides dedicated HR support to create a better employee experience.

Strategic HR for Growth

Align HR strategies with business objectives through succession planning, leadership development, and workforce forecasting. Fractional HR ensures your people strategy supports long-term success.

Getting Started with Fractional HR Services

Step 1: Assess Your HR Needs

Determine where your company needs HR support the most. Are you struggling with compliance, hiring, employee relations, or leadership development? Identifying key HR gaps helps define which fractional services will add the most value.

Step 2: Gain Dedicated HR Leadership

Start with operational HR support and scale to strategic guidance as needed. Fractional HR provides both efficiency and expertise without the cost of a full-time hire.

Step 3: Implement & Scale as Needed

Begin with core HR functions and expand services as your business grows. Fractional HR is designed to evolve with your workforce needs, making it an ideal solution for businesses in growth mode.

What This Means for You

Every business’s HR journey is unique, but the benefits of Fractional HR are clear: enhanced compliance, cost savings, and a stronger workforce. Companies that fail to invest in flexible HR solutions may struggle to keep up with evolving workplace demands.

If your business is facing HR challenges, scalability concerns, or compliance risks, now is the time to explore how Fractional HR can provide the support you need.

Don’t let HR gaps slow your growth—investing in a strategic HR solution today ensures a more agile, efficient, and people-focused workplace.

Let’s Build a Stronger HR Strategy Together

With ATA’s Fractional HR services, you get expert leadership, cost-effective solutions, and the flexibility to scale HR as needed.

To learn more, schedule a 30 minute complimentary consultation with me by filling out our contact form.

 

Categories
General Helpful Articles

AI Hype vs. Risk: What Every Business Should Know 

By Jon Joyner, Cybersecurity Practice Leader

The Top Line

If the first two months of the year are any indication, 2025 is shaping up to be the year of Artificial Intelligence (AI). AI is revolutionizing industries by enhancing efficiency, streamlining operations, and enabling data-driven decision-making. However, as businesses increasingly integrate AI into their operations, they also expose themselves to significant risks, including data breaches, regulatory violations, and reputational damage.

Without proper safeguards, AI can become more of a liability than an asset. This is why having a robust IT security strategy is essential. This article explores the key risks AI presents to businesses and the steps organizations can take to mitigate them.

Breaking It Down – The Growing Risks of AI in Business
  1. Data Breaches and Privacy Concerns

AI systems rely on vast amounts of data to function effectively. If not properly secured, sensitive information—such as customer records, financial details, or proprietary business insights—can be exposed to hackers. A single breach can result in financial losses and erode customer trust.

Just as AI can optimize business operations, bad actors can also use AI to enhance their attacks. Your systems need to be on high alert to counter these evolving threats.

  1. Cybersecurity Vulnerabilities

AI-powered automation can be exploited by cybercriminals if not adequately protected. Attackers may leverage AI to launch sophisticated phishing scams, deepfake frauds, or automated hacking attempts. As AI becomes more integrated into business processes, companies must strengthen their cybersecurity defenses to stay ahead of emerging threats.

  1. Bias and Compliance Issues

AI models can inadvertently reflect biases present in training data, leading to discriminatory outcomes that may result in regulatory penalties or lawsuits. Businesses must ensure their AI systems adhere to ethical and legal standards, which require continuous monitoring and adjustments.

AI will also impact administrative controls such as Acceptable Use or Mobile Device policies. Many organizations are unaware that AI is subject to lawsuits, data retention policies, eDiscovery, and insurance claims. AI platforms should be governed and controlled much like email and file systems.

  1. AI-Powered Fraud

Criminals are leveraging AI to commit fraud at an unprecedented scale. From AI-generated phishing emails to automated financial fraud, businesses must prepare to defend against threats that are becoming more sophisticated by the day.

Social engineering threats are particularly concerning. Imagine a scenario where a bad actor creates an AI-generated video impersonating someone, using it to extort or manipulate their target. These threats highlight the urgent need for businesses to implement AI-specific security measures.

  1. Operational Risks and AI Malfunctions

AI-driven automation can fail if models are not properly trained or updated. Incorrect predictions, data errors, or AI system malfunctions can disrupt operations, leading to downtime and financial setbacks. Businesses must ensure their AI is reliable, continuously monitored, and updated to maintain accuracy and efficiency.

Much like technical and security controls, having the right personnel with the necessary skill set, knowledge, and experience is crucial to maximizing the effectiveness and security of AI platforms.

Does Your Business Face These Risks?

If any of these concerns sound familiar, your business may be at risk. Ask yourself:

  • Are you handling large volumes of sensitive customer data?
  • Do you rely on AI for automation, decision-making, or fraud detection?
  • Have you experienced cybersecurity threats or compliance challenges in the past?

If you answered yes to any of these, it may be time to consider a risk assessment. Our introductory risk assessment will help you gain a clearer understanding of the true risks AI poses to your business.

What This Means for You

AI is a powerful tool, but without the right security measures, it can expose businesses to significant risks. Companies that fail to address AI vulnerabilities may face financial losses, reputational damage, and regulatory scrutiny.

Don’t wait for an incident to take action—proactively managing AI risk ensures business continuity, security, and compliance.

If you are interested in learning how ATA can help manage your AI risk, schedule a 30 minute complimentary consultation with me by filling out our contact form. 

Categories
News

Many Business Tax Limits Have Increased in 2025

A variety of tax-related limits that affect businesses are indexed annually based on inflation. Many have increased for 2025, but with inflation cooling, the increases aren’t as great as they have been in the last few years. Here are some amounts that may affect you and your business.

2025 deductions as compared with 2024:

  • Section 179 expensing: Limit: $1.25 million (up from $1.22 million)
  • Phaseout: $3.13 million (up from $3.05 million)
  • Sec. 179 expensing limit for certain heavy vehicles: $31,300 (up from $30,500)
  • Standard mileage rate for business driving: 70 cents per mile (up from 67 cents)

Income-based phaseouts for certain limits on the Sec. 199A qualified business income deduction begin at:

  • Married filing jointly: $394,600 (up from $383,900) Other filers: $197,300 (up from $191,950)

Retirement plans in 2025 vs. 2024

  • Employee contributions to 401(k) plans: $23,500 (up from $23,000)
  • Catch-up contributions to 401(k) plans: $7,500 (unchanged)
  • Catch-up contributions to 401(k) plans for those age 60, 61, 62 or 63: $11,250 (not available in 2024)
  • Employee contributions to SIMPLEs: $16,500 (up from $16,000)
  • Catch-up contributions to SIMPLEs: $3,500 (unchanged)
  • Catch-up contributions to SIMPLE plans for those age 60, 61, 62 or 63: $5,250 (not available in 2024)
  • Combined employer/employee contributions to defined contribution plans (not including catch-ups): $70,000 (up from $69,000)
  • Maximum compensation used to determine contributions: $350,000 (up from $345,000)
  • Annual benefit for defined benefit plans: $280,000 (up from $275,000)
  • Compensation defining a highly compensated employee: $160,000 (up from $155,000)
  • Compensation defining a “key” employee: $230,000 (up from $220,000)
  • Social Security tax Cap on amount of employees’ earnings subject to Social Security tax for 2025: $176,100 (up from $168,600 in 2024).

Other employee benefits this year vs. last year

  • Qualified transportation fringe-benefits employee income exclusion: $325 per month (up from $315)
  • Health Savings Account contribution limit: Individual coverage: $4,300 (up from $4,150)
  • Family coverage: $8,550 (up from $8,300)
  • Catch-up contribution: $1,000 (unchanged)
  • Flexible Spending Account contributions:
  • Health care: $3,300 (up from $3,200)
  • Health care FSA rollover limit (if plan permits): $660 (up from $640)
  • Dependent care: $5,000 (unchanged)

Potential upcoming tax changes

These are only some of the tax limits and deductions that may affect your business, and additional rules may apply. But there’s more to keep in mind. With President Trump back in the White House and the Republicans controlling Congress, several tax policy changes have been proposed and could potentially be enacted in 2025. For example, Trump has proposed lowering the corporate tax rate (currently 21%) and eliminating taxes on overtime pay, tips, and Social Security benefits.

These and other potential changes could have wide-ranging impacts on businesses and individuals. It’s important to stay informed. Consult with us if you have questions about your situation. © 2025

Categories
News

News Update

President Trump announced that 25% tariffs would be imposed on products from Canada and Mexico, effective Feb. 4. But on Feb. 3 after a stock market drop, he announced that tariffs on Mexico would be paused for one month. He also imposed a 10% tax on energy resources from Canada. In addition, he imposed an additional 10% tariff on Chinese imports.

As of Monday morning, the tariffs on Canada and China stand, and Canada has retaliated with tariffs against the United States. Mexico is the United States’ largest trading partner and Canada is the largest export market for 36 states. Trump said that Americans may feel “some pain” due to the tariffs but it will be “worth the price.” Stay tuned.

Categories
General

U.S. Exits Global Minimum Tax Plan

In an executive order, President Donald Trump declared that a global corporate minimum tax plan “has no force or effect” in the United States. This effectively pulls the U.S. out of the Organization for Economic Co-operation and Development (OECD) global tax proposal negotiated with nearly 140 countries by the Biden administration in 2021. Republicans on the House Ways and Means Committee have introduced a bill, the Defending American Jobs and Investment Act, that would officially end U.S. involvement in the tax arrangement. The bill would also create a reciprocal tax that would target foreign countries that assess unfair taxes on American companies under the OECD’s global minimum tax.
Stay informed on how these developments could impact global tax policies and American businesses. ATA is here to help you navigate these changes. Contact us for more information.
Categories
Financial Institutions and Banking General

Bank Wire: Cybersecurity Testing is More Important than Ever

Rapidly increasing cyber risks make it essential for banks to conduct regular tests of their cybersecurity preparedness, including vulnerability and penetration testing. According to IBM’s “Cost of a Data Breach Report 2024,” the average breach cost $6.08 million in the financial industry (defined as banking, insurance and investment companies). That’s second only to health care. To help prevent cyberattacks, banks must develop effective information security programs and test them regularly to ensure that they’re operating as expected.

According to the Federal Financial Institutions Examination Council’s (FFIEC’s) Information Technology Examination Handbook, the primary testing tools include self-assessments, penetration tests, vulnerability assessments and audits. Penetration testing is particularly important, given the speed with which hackers’ techniques are evolving. It involves subjecting a system to real-world attacks selected and conducted by the testers to identify weaknesses in business processes and technical controls.

FFIEC to retire Cybersecurity Assessment Tool

The FFIEC will “sunset” its Cybersecurity Assessment Tool (CAT) at the end of August 2025. First made available nearly 10 years ago, the CAT is a voluntary tool banks can use to identify their cybersecurity risks and determine their preparedness. The FFIEC notes that while “fundamental security controls addressed throughout the maturity levels of the CAT are sound, several new and updated government and industry resources are available that financial institutions can leverage to better manage cybersecurity risks.”

Government resources include:

  • The National Institute of Standards and Technology (NIST) Cybersecurity Framework 2.0 (go to nist.govand search for cyber framework), and
  • The Cybersecurity and Infrastructure Security Agency’s (CISA) Cybersecurity Performance Goals (go to cisa.gov and search for cybersecurity performance goals).

Industry resources include:

and search for “the profile,”) and

  • The Center for Internet Security Critical Security Controls (go to cisecurity.org and search for controls.)

The FFIEC doesn’t endorse any particular tool, but says that these standardized tools can assist banks in their self-assessment activities.

CFPB targeting improper overdraft opt-in practices

In a recent Consumer Financial Protection Circular (2024-05), the Consumer Financial Protection Bureau (CFPB) explained how to tell if a bank is violating the Electronic Fund Transfer Act and Regulation E. A violation may happen if the bank lacks proof that it has obtained consumers’ affirmative consent before levying overdraft fees for ATM and one-time debit card transactions.

Regulation E’s overdraft provisions establish an “opt-in” regime. The CFPB clarifies that banks are prohibited from charging such fees unless consumers affirmatively consent to enrollment. The form of records that demonstrate consent may vary depending on which channel the consumer uses to opt in to covered overdraft services.

© 2024