​Tax code changes may bring financial flexibility 

​So far this year, the Federal Reserve has increased interest rates by 150 basis points and is expected to raise rates by another 200 basis points during the remaining months of 2022. In this environment, access to capital and the cost of debt financing can be debilitating for restaurants looking to grow or simply to adapt to new ways of doing business. Some relief may be coming in the form of changes to the U.S. tax code. Congress is considering restoring depreciation and amortization to the formula for calculating interest on business expenses, which could help give restaurants greater flexibility to finance the changes they need to make to their operations.
 
If you’re interested in learning more about potential changes to come, the National Restaurant Association is hosting a webinar with Aaron Frazier, the association’s vice president of public policy, on August 31st. He will be explaining how restaurants can benefit from the Permanently Preserving America’s Investment in Manufacturing Act, as well as from undoing restrictive changes to the EBITDA calculation.

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Claim this tax credit

​Restaurants could use a break right now, so don’t miss this one: The Employee Retention Credit is a refundable tax credit for employers who experienced difficulties in 2020 and 2021 as a result of Covid-related lockdowns and related economic disruptions. As Modern Restaurant Management reports, not many restaurant owners are taking advantage of the credit, even though they may be eligible for up to $26,000 per employee. Even if you received funds through the Paycheck Protection Program, you can still qualify for the Employee Retention Credit. Ask your accountant about claiming the credit now before it phases out in April of 2023.