The IRS just pushed back a deadline for non-filers who have yet to receive their stimulus check. The new deadline for non-filers to supply the IRS with their information is Nov. 21.
DONTMESSWITHTAXES.COM
Nov. 21 is new deadline to apply for COVID relief money
The IRS just pushed back a deadline for non-filers who have yet to receive their stimulus check. The new deadline for non-filers to supply the IRS with their information is Nov. 21.
BIT.LY
Bitly | Forbidden | 403
There are two tax codes in this country:
1) One code is for those who don't get someone to help them use it, and
2) The other code is for those who take every available legal deduction.
Our job is to help make the tax code work for YOU.
Donating (and receiving) cryptocurrency can be a challenge for donors and charities. These tips should help steer both parties in the right direction.
FORBES.COM
Accept Virtual Currency Donations? Yes, Charities. You Can!
Just two weeks left until extended 2019 tax returns are due. Time to get moving!
“Enjoy the little things, for one day you may look back and realize they were the big things.”
- Robert Brault
What little things are you thankful for today?
The day has come. All 2019 returns that were given an extension to file are due to be submitted today, which means our most recent marathon is coming to an end.
Next tax season is now not so very far away (along with the tax ramifications of what THIS tax season delivered). Are you ready for that?
You will be ... with our help.
We've been telling you about some tax professional rumors circulating about "automatic forgiveness" for PPP loans under $150K.
Well, they did it! Except it is for even smaller loans (under $50K).
And it's not "automatic", but it is very, very easy. Here is the simplified application if your loan falls in that category. https://bit.ly/318OOYh
Here are some questions to consider for your 2020 taxes that will set you up for long-term success. We're here to help you walk through these answers and how to affect your tax status in a positive way.
1) Have you had a significant change in your wage income this year?
2) Have you taken capital gains or losses this year? Are you planning to?
3) Did you start or sell a business this year?
4) Did you purchase real estate?
5) Did you make your full contributions to retirement accounts?
6) Have you considered a Roth IRA?
7) Did you withdraw from retirement accounts, and for what purpose?
Extension deadline is on THURSDAY, folks. Filing a tax return late (without reasonable cause) results in a 5% late FILING penalty (on whatever it is that you owe -- and the IRS will figure it for you if you don't), and an additional 5% for every month you wait to file.
PLUS there is an additional 0.5% to 1% late PAYMENT penalty (per month) on whatever it is you owe. NOTE: this is ON TOP of late filing penalties.
Then (yikes), interest accrues on both the late tax filing penalties AND the late payment penalties.
That's a lot of penalty. And at least the first one is completely avoidable.
If you can't pay the tax due on October 15, still file ... and talk to us about helping you set up an installment agreement or working out an offer in compromise to cover what you owe.
FORBES.COM
October 15 Is Almost Here. Don’t Have The Money To Pay Your Taxes? File Them Anyway.
Another PPP loan update for businesses:
If your PPP loan was less than $50K, a couple of time-consuming requirements have been removed from the forgiveness application, making the process *a little bit* less complicated.
Automatic forgiveness for certain loans, while still being discussed, is not yet available.
FORBES.COM
Was Your PPP Loan Less Than $50,000? Life Just Got (A Little Bit) Easier
If you filed an extension on your 2019 taxes (like many Americans), your extended deadline is a week away (on Oct. 15).
A new QR code feature aims to help you access your taxpayer account info easier when receiving an overdue tax notice from the IRS. If you just need help setting up logistics to pay your bill, this will help you. But if you do not agree with their numbers or you can't pay, you will still want professional assistance.
DONTMESSWITHTAXES.COM
IRS adding QR codes to tax-due notices
There's lots of tax talk in this election season, as in every other, as both candidates are making promises about their tax policies. The BEST advice we can give about what to do for your individual and business tax plan right now is: wait and see.
If new tax legislation is passed in 2021, it probably won't be effective until 2022. Congress very rarely makes tax changes that are retroactive.
So ... wait and see. Then, we will listen together to see what whichever President we have says about their tax plans ... and react accordingly.
Organizing your financial world can feel like a daunting task, but some SIMPLE steps will go a long way. Watch our video -- doesn't this seem really doable?
Well, with yesterday's extended tax deadline behind us, one crazy and wild and completely unprecedented tax season comes to a close. Thank you for entrusting us with something as close to you as your finances -- we know how important each dollar is to each of you, and we're committed to helping you keep as many of them as you legally can. (And now, it's time for a very long nap this weekend, before we gear up for next year.)
Now that Tax Year 2019 is fully in the rearview mirror, we only have a couple months left to make changes that will affect TY2020.
If you are interested in exploring different options for getting ahead of any tax issues before they bite you ... get in touch with us right away.
Times a'wasting.
The IRS has apparently caught up on processing their backlogged mail that stacked up during COVID closures. Or, good enough, they say.
They are now resuming the mailings of tax-due notices to taxpayers with outstanding tax bills. If you receive one of these notices, give us a call immediately.
DONTMESSWITHTAXES.COM
IRS is resuming issuance of tax balance-due notices
Keeping personal and business separate is extremely important for your taxes. While there is some room for dual purpose expenses, far-reaching claims are easy pickings for IRS auditors.
"Hope someone can use some of these baseballs in the batting cages. I found them cleaning my garage. I pitched them to my son and grandson for countless rounds. My son is now 46 y/o and my grandson is 23 y/o. I am 72 and what I won't give to pitch a couple of buckets to them. They have both moved away. If you are a father cherish these times. You won't believe how quickly they will be gone.
God bless
P.S. Give them a hug and tell them you love them every chance you get."
MSN.COM
This grandpa’s note on a bucket of baseballs will touch your heart
The standard deduction is increasing in 2021, and new tax brackets and tax rates have been released.
"Note: These rates remain in place no matter what happens in November 2020. For these rates to change, Congress would have to vote to change the tax rates."
FORBES.COM
IRS Releases 2021 Tax Rates, Standard Deduction Amounts And More
Taxpayers collectively spend six billion hours annually --
or 8,758 lifetimes
-- trying to comply with the tax code. Fortunately, YOU don't have to be the one doing all the heavy lifting. We are on your side.
Save ALL of your tax returns. After you file, save the paper and/or electronic copies with the rest of that year's financial documents for at least 7 years.
If the IRS suspects you underreported your gross income by 25% or more, they have up to six years to challenge your return. And because we can all file for an extension at the October 15 deadline, you must keep your records for at least seven years.
Regardless of those rules, though, if the IRS suspects you filed a fraudulent return, no statute of limitations applies. Because the IRS is run and organized by fallible people (with all of their attendant biases, emotions, etc.), we suggest keeping your tax returns and documents forever.
Good news?
"The US economy added 1.37 million jobs in August ... the fourth consecutive month of job growth. Additionally, the US unemployment rate in August fell to 8.4%.
This mark was down from 10.2% in July and better than April's historically high 14.7% unemployment rate that happened to be the highest on record since the Great Depression. Still, the number of permanent job losses increased by 534,000 to 3.4 million, inspiring more Americans to pursue their own start-up ventures."
BUSINESSINSIDER.COM
The increase in the number of people starting their own businesses in the US has surged to a 13-year high
Do you need to adjust your withholding before year-end?
By now, you should be able to look at what your income will most likely be, and you can keep more of it in your pocket instead of "loaning" it to Uncle Sam via withholding, and getting it back via refund.
Conversely, you can make sure you don't get slapped by a bill. (Remember, unemployment compensation is usually taxable.)
If you have a veteran in your family, feel free to pass along this handy list of freebies available today and throughout the month. It's a (very) small way to say thank you.
Thank you for your service, Veterans!
MILITARYBENEFITS.INFO
2020 Veterans Day Free Meals, Discounts, Sales and Deals | Military Benefits
Your financial situation is likely to be impacted MOST by one simple factor: whether you make decisions with the future in mind ... or not.
The year 2020 will come to an end (thank goodness). And with it will end any opportunity you might have to make tax-related changes to your financial situation. Most tax planning strategies (for you and/or your business) completely dry up after 12/31, so take a look at these and let's talk if you think you could use some help...
Beware of stimulus-related texts that look like this (but are phishing scams):
"You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account. Continue here to accept this payment."
FORBES.COM
IRS Warns On New Scam Related To Stimulus Checks
Starting this Veteran’s Day on November 11, the Department of the Interior has made it possible for anyone who’s worked in the US Armed Forces, including the National Guard and Reserves, to visit national parks for free. The department currently waives fees for active-duty military service members, so now former military will also have lifetime free access.
GOODNEWSNETWORK.ORG
Gold Star Families and Military Veterans Now Get Free Entrance to Any National Park This Veteran's Day—and Beyond
The work of a business owner is about planning, focus and execution (and later ... harvesting) vs. chasing the fad of the week, getting distracted and wasting time -- time you can't ever get back.
How many times did you look at social media today to gawk at political train wrecks? How much of your headspace is currently taken up with "pressing" client/staff questions? How many rabbits can you chase at one time?
Now, more than ever: Plan, focus, execute and harvest.
As that old "going on a bear hunt" ditty says: Can't go over, can't go under it ... gotta go through it.
That is 2020, for most of us.
If numbness is setting in, unplug a little. Stay off social media. Only read important content (like THIS, naturally).
Focus on your domain and build the financial and relationship fortress you need to carry you through whatever might come.
Now is a very good time to get your ducks in a row before year-end on any looming cashflow issues you or your business might be facing ... because the IRS is energized to audit and examine every possible source of federal revenue that they can manage to find.
YOU, by the way, are the primary source of their revenue ... and they will definitely be watching for ways to get in your wallet.
WE are here to help you keep as much in your wallet as legally possible.
If you're looking at college costs for next year, here are a few handy tips to help you collect the tax info you'll need to apply for financial aid.
DONTMESSWITHTAXES.COM
Getting the tax info needed to complete FAFSA
There is a new category of tax returns that the IRS will be heavily scrutinizing: cryptocurrency.
The IRS has made an important change to 2020 tax forms to identify this type of financial exchange.
In 2019, the virtual currency question was only found on Schedule 1: Additional Income and Adjustments to Income, which meant that regular W-2 filers with no other business or rental income or income adjustments would not have to answer this question.
But ... in 2020, the IRS has moved the question to the front of the Form 1040. That means everyone will need to answer this question:
"At any time during 2020, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?"
The IRS is getting smart about the ways that people are avoiding them. So: answer that question properly, or you could be found guilty of perjury.
"Tomorrow is often the busiest day of the week."
-Spanish Proverb
We've heard clients say "next year" countless times when we bring up the subject of tax planning. Make this year the year that you look proactively at your taxes -- both personal and business -- and let us help improve the bottom line for you. There's still time.
What are the most important tasks in your business? Taking care of customers and growing revenue.
Add any trendy business philosophy you want on top of that, and it still gets down to the same thing.
EVERYONE on your business team should either be adding revenue or helping to control expenses. We suggest you (constantly) ask your staff -- and yourself -- what they can do to help.
Entrepreneurism and small businesses are powerful forces in this country.
MSN.COM
Boy, 8, Who Started Business During Pandemic Helps Raise Money to Move Family from Shed to Apartment
Write your representatives to let them know what you think about this proposed new tax on remote workers.
CNN.COM
Should you pay higher taxes because you work from home?
As you plan for your giving budget in this holiday season, remember that THIS YEAR ONLY (per the CARES Act), you can take the standard deduction, as well as up to $300 of cash donations. It has to be cash though, and it's up to $300 per return, so if you file jointly, it's still only $300.
(Since most people use the new higher standard deduction, charitable giving is not deductible. But this year, you can claim up to $300 on top of that standard deduction.)
With the increased standard deduction this past year, some smaller charities began to see a decrease in donations.
This year might be worse.
Which means that you if you HAVE the "means", this is a great year to consider giving. In a tax-advantaged way, of course.
And since it's Giving Tuesday, it's a great day to go ahead and head over to your favorite charity and make it happen.
A financial tip on this Cyber Monday:
Don't spend money you don't have. Which is especially tempting when shopping online, with a credit card, during "the best prices of the year". Stick to a budget, and resist the drama that retail marketers create.
This is a year in which your local, small businesses need your support more than ever.
So let's get out there and shop small tomorrow. We certainly will!
This is a year in which we might not feel so ... ready ... to take a day to focus on being thankful.
But let's try.
We'll start: We are thankful for a profession that enabled our office to provide REAL help and REAL guidance during a time of REAL need in our nation. We feel like we made a difference in the lives of our clients and friends this year, helping to be a light of direction and guidance in uncharted territory.
While we grieve over the economic realities facing us all, we are thankful for an opportunity to make a real difference in the midst of it.
Now ... how about you?
Here's what happens when you allow bot software to do things that only humans should.
This movie script was the result when a man asked a bot to watch over 1,000 hours of Hallmark Christmas movies and then write a Christmas movie script of its own.
So ... do you really want software to determine how well you are doing with your taxes? Didn't think so.
Don't look for further widespread penalty relief when it comes to your IRS debt. There are, however, certain relief requests that can be submitted and that will be handled on a case-by-case basis.
JOURNALOFACCOUNTANCY.COM
IRS commissioner: Penalty relief will not be 'blanket'
The problem with "Googling for financial advice" is that you'll often get the blandest or reheated leftovers for advice. The "content farm" websites out there churn out the same old information, and it's simply not applicable in every situation.
That's why it's always helpful to have someone who can speak into your specific situation. (Which, ahem, is what we're here for.)
The IRS recently ruled definitively that expenses paid for with PPP proceeds are NOT deductible.
This has been an open question, and it is STILL a bit of an open question ... but what they clarified is that the timing of the forgiveness won't affect the tax treatment of these expenses.
Essentially, if a business "reasonably believes that a PPP loan will be forgiven in the future", expenses related to the loan aren’t deductible whether or not the business has filed for forgiveness.
But also -- if a business does NOT apply for forgiveness, or is denied, those expenses will be deductible.
It's worth a conversation with us for planning purposes if you need guidance.
ACCOUNTINGTODAY.COM
IRS clarifies deductibility of PPP loan expenses, as AICPA criticizes forgiveness questionnaire
We're looking for some good news today. Post a link to a feel-good article or post in the comments, and let's all dwell on some positivity together. 😊
If you have ANY cryptocurrency transactions in your history, you must make sure that they are properly reported. Just because it's encrypted ... doesn't mean that it's not taxable.
To answer the questions we often get around here from clients facing tough times, this video summarizes a step-by-step process which we often help people work through.
If your business took a PPP loan, there isn't any tax benefit to be gained by delaying the forgiveness process. So ... it's a good idea to start on that.
We're here to help.
It's been one difficult year for small business owners.
Here are a few ways to help reduce your tax burden. (We can help with this.)
CNBC.COM
5 steps business owners can take to trim their 2020 taxes
How long should you be keeping your records? Even in the days of cloud-document storage, it's important to have hard copies lying around -- in a safe place, of course. If you don't have a full safe, these are the sort of documents for which you may want to invest in a fire safe, at least.
Those who reach their financial goals usually carry a willingness to live beneath their means for as long as it takes. While their peers are showing a tendency toward embracing the good life at the first sign of prosperity, the would-be wealthy take a pass on all of that.
A drive to save large amounts of money causes frugal spending habits, which then enable the ability to make purchases without using debt.
It's a domino effect.
Do you get a knot in your gut when your spouse asks you how the finances are looking? Do you practice a financial policy of "Don't ask, Don't tell"?
One of the best tools we've seen to keep your spouse or business partner in the loop about your finances is the simple concept of the monthly financial report. Here are some of the major benefits...
There are some significant actions you can take NOW to positively affect your 2020 tax filing next year. (Read: to keep more money in your pocket.)
1) Look ahead to 2021 -- project what your income might be, then make withholding and tax moves accordingly.
2) Adjust your withholding -- you still have 1-2 paychecks to catch up on any overpayments or underpayments for this year.
3) Spend down your FSA (if you have one) -- don't let these funds go to waste.
4) Give to charity -- even if you take the standard deduction, you can ALSO deduct up to $300 in cash giving. DO IT.
5) If you can, give tax-free gifts to family -- if you have means, this is the simplest way to avoid estate taxes. You can give up to $15K tax free.
6) Max out workplace retirement accounts -- if you still get this sort of perk, you only have a couple more weeks to maximize it.
7) Gather your virtual currency docs if you have them. The IRS is scrutinizing these starting NOW.
The greatest gift we can give this season is love. Let our hearts be open not to just those who are close to us, but to all humanity. Let us be slow to judge and quick to forgive, and show patience and empathy.
Happy Holiday from our homes to yours.
The new stimulus bill passed.
For businesses, there will be forgiveness for all PPP loans below $150k, and deductibility of PPP expenses. So after the new year when the SBA has time to build the new forms, people can apply for forgiveness whenever they want now.
Plus new PPP and tax credits, which are all gated on proving revenue loss. Anyone whose business is down more than 25% from the prior year could be eligible for some more financial aid.
Here is a link to the full bill, if you want to review the 5,600 pages (the longest in history)...
https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-116HR133SA-RCP-116-68.pdf
Congress has officially passed a new stimulus bill. The legislation includes a new round of stimulus checks to individuals and families, an extension of unemployment insurance, funding for more business loans, vaccine funding, renter support, and education funds.
NBCNEWS.COM
Congress passes massive Covid relief bill to provide direct aid to struggling Americans
Congress finally agreed on another stimulus deal over the weekend, and an official vote is forthcoming. This legislation does include more stimulus checks to individuals and families: $600 for adults and $600 per child.
CNBC.COM
Congress agrees to a Covid stimulus deal. Here’s who’s likely eligible for a $600 check and when you’ll get it
It's been one difficult year for small business owners.
Here are a few ways to help reduce your tax burden. (We can help with this.)
CNBC.COM
5 steps business owners can take to trim their 2020 taxes
Good news for struggling restaurants and business owners:
The new stimulus bill included the restoration of the 100 percent business meals deduction for two years (it was 50 percent).
Restaurants have been forced to close their doors to in-house dining in some states and limit capacity in others, and over 100,000 restaurants have closed permanently as a result so far.
The new 5,500+ page Covid Relief Bill is massive, and it will take many weeks to digest everything included in the legislation.
Here's what we know about business relief and PPP funds:
There is now streamlined forgiveness for PPP loans under $150K. This is a significant development for many so check with your lender about how they want that now to be handled.
There is also now an additional $284B in PPP funding for impacted businesses to access.
More on this in days to come...
Use your FSA funds before year-end.
Money set aside in a flexible spending account must be spent by the end of the year, else the funds are lost.
But some employers allow a two-and-a-half month grace period, so check with your employer to see what your personal deadline is for utilizing your FSA savings.
(You can spend FSA funds to pay health deductibles and copayments, but not insurance premiums. You can spend FSA funds on prescription medications, medical equipment and supplies, and other permitted medical and dental expenses. Here's a list of what's allowed: https://bit.ly/3rE37Qk )
Trump signed the second stimulus bill over the weekend. While he is still advocating for changes to the bill -- more changes might be coming -- Americans will be receiving a second round of stimulus checks, continued unemployment benefits, rental assistance, and more PPP funds.
The bill also includes additional earmarked funds for education, vaccine distribution, and child care.
FORBES.COM
Trump Signs Stimulus Package—Here’s What It Means For You
The greatest gift we can give this season is love. Let our hearts be open not to just those who are close to us, but to all humanity. Let us be slow to judge and quick to forgive, and show patience and empathy.
Happy Holiday from our homes to yours.
We're digging into the new Covid Relief Bill this week and breaking it down into simple info you can digest. (Because: 5,500 pages?!)
Apart from the $600 stimulus checks coming, here is more good news for those receiving unemployment:
They tacked on an additional $300 per week for all workers receiving unemployment benefits, from Dec. 26, 2020 to March 14, 2021. The bill also extended the "PUA", a temporary federal program covering self-employed and gig workers, to March 14 (after which no new applicants) through April 5, 2021.
The bill also provides an extra benefit of $100 per week for certain workers who have both wage and self-employment income but whose base UI benefit calculation doesn’t take their self-employment into account.
A new round of stimulus checks are in the mail, and you should receive it by January 15th.
CNET.COM
Second stimulus check: IRS has 11 days to send out payments. When will yours arrive?
Thanks for your friendship, and for your business in 2020, and (hopefully) in 2021. Happy New Year to all of you!
Good news for struggling restaurants and business owners:
The new stimulus bill included the restoration of the 100 percent business meals deduction for two years (it was 50 percent).
Restaurants have been forced to close their doors to in-house dining in some states and limit capacity in others, and over 100,000 restaurants have closed permanently as a result so far.
The new 5,500+ page Covid Relief Bill is massive, and it will take many weeks to digest everything included in the legislation.
Here's what we know about business relief and PPP funds:
There is now streamlined forgiveness for PPP loans under $150K. This is a significant development for many so check with your lender about how they want that now to be handled.
There is also now an additional $284B in PPP funding for impacted businesses to access.
More on this in days to come...
Use your FSA funds before year-end.
Money set aside in a flexible spending account must be spent by the end of the year, else the funds are lost.
But some employers allow a two-and-a-half month grace period, so check with your employer to see what your personal deadline is for utilizing your FSA savings.
(You can spend FSA funds to pay health deductibles and copayments, but not insurance premiums. You can spend FSA funds on prescription medications, medical equipment and supplies, and other permitted medical and dental expenses. Here's a list of what's allowed: https://bit.ly/3rE37Qk )
More (easily-digestible) news from the latest stimulus bill from Congress:
College students and parents with federal student loans will receive an additional extension on student loan payments, and won't be required to make payments on federal student loans until April 1, 2021. This includes both principal and interest payments.
Renters and landlords, the second coronavirus relief bill affects you.
This new act extends the moratorium on evictions under the CARES Act, designed to protect renters from eviction, until January 31, 2021.
That means, if you are a renter, you have one more month to get right. For landlords, you need to know that you will have to wait one more month.
So you don't have to read all 5,500 pages of the second Covid Relief Bill (?!) or the selectively worded news reports, we're working this week to break it down into what you need to know. Today, we're talking about changes to child tax credits.
There is now a special temporary rule allowing lower-income people to use their earned income from tax year 2019 to determine the Earned Income Tax Credit and the refundable portion of the Child Tax Credit (i.e., the Additional Child Tax Credit) in the 2020 tax year. This is very good news.
Taxpayers who filed returns through H&R Block and TurboTax in recent years are experiencing a delay in receiving their second round of stimulus checks. The issue is for those who had their tax prep fee deducted from their refund, causing stimulus payments to be sent to temporary accounts set up for that purpose.
"The IRS says that the financial institutions that received the funds will return them to the IRS, and then the IRS will reissue payments to the right accounts. This will cause delays in people receiving their payments."
Maybe ... next time ... try a different solution? 🤷♀️
CNBC.COM
H&R Block and TurboTax customers report issues with second stimulus check deposit
We're digging into the new Covid Relief Bill this week and breaking it down into simple info you can digest. (Because: 5,500 pages?!)
Apart from the $600 stimulus checks coming, here is more good news for those receiving unemployment:
They tacked on an additional $300 per week for all workers receiving unemployment benefits, from Dec. 26, 2020 to March 14, 2021. The bill also extended the "PUA", a temporary federal program covering self-employed and gig workers, to March 14 (after which no new applicants) through April 5, 2021.
The bill also provides an extra benefit of $100 per week for certain workers who have both wage and self-employment income but whose base UI benefit calculation doesn’t take their self-employment into account.
A new round of stimulus checks are in the mail, and you should receive it by January 15th.
CNET.COM
Second stimulus check: IRS has 11 days to send out payments. When will yours arrive?
Business owners:
Beginning Jan. 1, 2021 (and through June 30, 2021), the new relief bill expanded the Employee Retention Credit.
- The bill increases the payroll tax credit rate from 50 percent to 70 percent of qualified wages.
- Also it expands eligibility for the credit by reducing the required year-over-year gross receipts decline from 50% to 20% and provides a safe harbor allowing employers to use prior quarter gross receipts to determine eligibility. This might not seem significant, but for the right business, this is VERY good news.
- The limit on per-employee creditable wages is increased from $10,000 for the year to $10,000 for each quarter. Much more generous.
- The 100-employee delineation for determining the relevant qualified wage base increases to employers with 500 or fewer employees.
- Employers who receive PPP loans may still qualify for the ERTC with respect to wages that are not paid for with forgiven PPP proceeds. Previously, you had to choose one program or the other ... now, as long as you qualify for both, you can use both.
How about some good news? Here's an inspirational story about serving those we love and reminding us we're never too old to do great things. https://bit.ly/3snnbXr
MSN.COM
Great-grandmother earns college degree at 90 years old
Check on the status of your latest stimulus payment here:
https://bit.ly/3ciFvIs
IRS.GOV
Get My Payment | Internal Revenue Service
More (easily-digestible) news from the latest stimulus bill from Congress:
College students and parents with federal student loans will receive an additional extension on student loan payments, and won't be required to make payments on federal student loans until April 1, 2021. This includes both principal and interest payments.
Renters and landlords, the second coronavirus relief bill affects you.
This new act extends the moratorium on evictions under the CARES Act, designed to protect renters from eviction, until January 31, 2021.
That means, if you are a renter, you have one more month to get right. For landlords, you need to know that you will have to wait one more month.
Q&A on the PPP
Question: If I received the "grant" portion of the EIDL, is this considered taxable income?
Answer: No, it is not taxable income.
Eberhart Accounting and Tax Services updated their business hours.
Eberhart Accounting and Tax Services updated their info in the about section.
Q&A on the PPP
Question: If I received the first PPP, should I include this number in calculating whether I "lost 25%+" to qualify for the second round?
Answer: As you might remember, the requirement in order to receive a second PPP is that the small business has less than 300 employees and can demonstrate a revenue reduction of 25 percent. But that revenue reduction figure should NOT include any funds from the first PPP.
Also, you can calculate this either by quarter, or by fiscal year -- whichever is more advantageous. Many area small businesses need help with these calculations ... that’s what we’re here for.
We like to have a little fun laughing at the newest TurboTax commercials that pop up this time of year. Last year, it was "all people are tax people". This year, they're promoting their "live" feature with commercials of a floating desk answering various deduction questions.
It's clever, but it glides over what it is and isn't -- relying upon software to do your taxes can be a very expensive mistake. And that's not even mentioning the armies of bored, underpaid "tax experts" who are "at your disposal", apparently.
Now, if you'll pardon the slightly shameless plug...
Every year, we unwind the messes of dozens (or more) of tax clients who went this self-prepared, software route -- and who missed out on the kind of personalized attention that we provide here. Yes, they have experts that will "file for you" ...
... but there is MUCH more to a tax strategy than simple "filing".
The GOOD news is that we can go back and amend tax returns from the last 3 years, so if this is you, no shame -- we'll fix this stuff for you, and ensure you get back everything you deserve to.
According to a recent report, the IRS is apparently understaffed, overstretched and waaaay behind on collections notices, and other such things.
Which is another reason to work directly with a qualified tax pro. We have a specialized line to the IRS and can often contact them on your behalf. We still have to wait on long hold times, but it's far superior to the general public lines.
But that gives us time to ensure that everything is properly handled, and every possible deduction is taken.
The Families First virus-related Tax Credit has been extended through March 31, 2021. Many employers had been required to keep paying employees forced to miss work due to health restrictions (e.g. staying home with children while schools were closed), but offered a tax credit to help cover the cost.
Employers no longer must pay such workers. But the new bill extends the refundable tax credit through the first quarter for those bosses who are still doing so.
IRS.GOV
COVID-19-Related Tax Credits for Paid Leave Provided by Small and Midsize Businesses FAQs | Internal Revenue Service
The plethora of new tax breaks and credits from the two big COVID relief bills are not automatically applied to your taxes. You have to know about them and apply the appropriate information and forms to your return manually.
Yet another reason to confer with a professional who can help you do that.
A new benefit from the newest stimulus package...
The $300 ($600 for joint returns) above-the-line charitable giving deduction for all taxpayers, whether they itemize or not, has been extended through the end of 2021.
Corporations will also be allowed to deduct up to 25% of their taxable income for charitable contributions, which is an increase from the normal 10% allowed.
Have you heard about The Work Opportunity Tax Credit?
This is a new credit available for business owners as part of the most recent relief bill.
It's a nice bonus, depending on your hiring practices and the state of your business. This is a credit for hiring a person from certain categories (veterans, ex-felons, welfare recipients) but, more pertinent for many: people who have been jobless for more than six months. The credit, which is calculated per employee, ranges from $1,200 to $9,600, and you would take this on your BUSINESS tax return. This is also available for pass-throughs (i.e. S-Corps, Partnerships).
Be sure to bring this up when you file your taxes, and keep it in mind for future hires.
IRS.GOV
Work Opportunity Tax Credit | Internal Revenue Service
This is what you'll need to bring in for your tax appointment this year. This list has been updated to reflect both stimulus bills and their respective benefits.
Q&A on the PPP
Question: If I received the "grant" portion of the EIDL, is this considered taxable income?
Answer: No, it is not taxable income.
Partnerships, LLCs and S-Corps:
Circle March 15th on your calendar again. This is your business return deadline.
The IRS only has 10 years to collect your unpaid tax debt.
After 10 years expires, the IRS must, by law, put a credit on your account for the amount that cannot be collected, and move your account balance to zero. The time to collect begins when the IRS first puts a balance due on its books, and ends 10 years later. The end is known as the "IRS collection statute expiration date".
By law, owing the IRS is not forever.
And, of course, with our help, it's much, much less.
This is going to be a busy year for us (and most tax professionals, honestly). Because of the stimulus payments, extra unemployment benefits, PPP and EIDL loans, payroll tax deferrals, and the many other short-term tax credits and options available, we're already seeing more traffic in our office than usual this time of year.
So it would be wise to get an early jump on things, get questions answered, and help us get your process started smoothly ... because appointments are not going to be as readily available the further we get into tax season.
Contact us to get started.
Unemployment benefits are taxable in most states. (Check the article for the states that are exempt.)
If you don't get taxes withheld from your unemployment checks automatically or make estimated quarterly payments based on the benefits you received, the taxes will be due when you file your annual return. With all of the extra benefits available in 2020, that means you might be slapped with a tax bill that you didn't expect.
We have ways of helping you figure out those payments, if needed.
CNN.COM
If you received unemployment last year, you could be in for a surprise at tax time
Eberhart Accounting and Tax Services updated their business hours.
The Families First virus-related Tax Credit has been extended through March 31, 2021. Many employers had been required to keep paying employees forced to miss work due to health restrictions (e.g. staying home with children while schools were closed), but offered a tax credit to help cover the cost.
Employers no longer must pay such workers. But the new bill extends the refundable tax credit through the first quarter for those bosses who are still doing so.
IRS.GOV
COVID-19-Related Tax Credits for Paid Leave Provided by Small and Midsize Businesses FAQs | Internal Revenue Service
The rise of self-employment and the side hustle is an exciting trend for the US economy. If this is you, there are important deductions you'll want to make use of to make your venture as profitable as possible.
If you file your taxes with us, we're always looking out for these money-savers. Let us know if you have questions.
MONEY.USNEWS.COM
15 Self-Employment Tax Deductions
In the realm of preparing your tax return, I urge you ... do NOT fall prey to the thinking that a software program or talking heads on a floating desk can suffice to enable you to preserve your resources or properly leverage the multiplicity of credits, loopholes and deductions available.
Give yourself the gift of financial peace of mind during tax season, and do it with someone who knows how to do it right.
Lowered gas and insurance costs in 2020 led the IRS to reduce the mileage deduction rates for 2021. This is now what you can deduct for driving for business purposes this year:
- 56 cents/mile for business (down from 57.5)
- 16 cents/mile for medical or moving (down from 17)
- 14 cents/mile for charitable purposes
But with gas prices seemingly on the way up again in 2021, we'll probably see mileage rates affected accordingly next year.
Depending on how you handle your 2020 taxes, you'll end up in one of two groups:
1) Sitting on top of a mountain of tax benefits that are available to those who use them effectively, or
2) Crying at the bottom of a pit of missed tax opportunities that could have eased the financial strain of 2020.
We're here to help YOU process tax season. No matter what happened during the donkey that was "2020" ... we're going to ensure that your taxes are as locked tight, cost-efficient and SAVINGS-OPTIMIZED for you as legally and ethically possible.
Partnerships, LLCs and S-Corps:
Circle March 15th on your calendar again. This is your business return deadline.
The IRS only has 10 years to collect your unpaid tax debt.
After 10 years expires, the IRS must, by law, put a credit on your account for the amount that cannot be collected, and move your account balance to zero. The time to collect begins when the IRS first puts a balance due on its books, and ends 10 years later. The end is known as the "IRS collection statute expiration date".
By law, owing the IRS is not forever.
And, of course, with our help, it's much, much less.
Even though the IRS delayed the opening of tax season this year, don't expect them to extend the filing deadline as well. The IRS has stated they have no plans to extend the April 15th tax deadline again this year.
Not all letters from the IRS involve full-blown audits. They might, for example, dispute your income reporting, cryptocurrency gains or losses, high rental losses, or home office expenses.
Though not an audit (yet), these types of notifications should absolutely be taken seriously. Let us know if you receive an IRS letter like this.
CNBC.COM
Your tax return could be flagged by the IRS. Here’s when it may happen
Today's the day, everyone! Tax Season is officially open.
Because of the IRS' delayed opening, this year's filing window is shorter than normal. Time is of the essence.
As you know, your 2020 taxes aren't going to look like every other year's, so get your appointment scheduled with a qualified pro ASAP. (That's us.) 😊
If you have an outstanding debt with the IRS, by law, the IRS must "consider" settling your debt.
We're talking here about the Offer in Compromise (OIC), and they are indeed authorized to settle for less than the full amount that you owe. In fact, they always have to listen to an offer.
But be careful -- not everyone qualifies for an offer in compromise. The IRS has very rigid guidelines for examining an offer in compromise. The IRS will look at your household income, living expenses and asset values, and determine if they can collect the FULL amount owed from you. In most cases, to accept a compromise, the IRS has to be convinced that they will never collect the full amount owed from you. If so, then they can agree to settle for a lower amount, representing what can be paid and recovered.
Usually, you need help for this process.
The rise of self-employment and the side hustle is an exciting trend for the US economy. If this is you, there are important deductions you'll want to make use of to make your venture as profitable as possible.
If you file your taxes with us, we're always looking out for these money-savers. Let us know if you have questions.
MONEY.USNEWS.COM
15 Self-Employment Tax Deductions
In the realm of preparing your tax return, I urge you ... do NOT fall prey to the thinking that a software program or talking heads on a floating desk can suffice to enable you to preserve your resources or properly leverage the multiplicity of credits, loopholes and deductions available.
Give yourself the gift of financial peace of mind during tax season, and do it with someone who knows how to do it right.
Some Friday humor...
(Good for a laugh, not actual tax advice!) ;)
"I'm not going to pay taxes. When they say I'm going to prison, I'll say no, prisons cost taxpayers a lot of money. You keep what it would have cost to incarcerate me, and we'll call it even."
- Jimmy Kimmel
Though the IRS began accepting 2020 returns last Friday, they won't start issuing refunds until the first week of March.
Here are some other key pieces of info you'll want to know for this year's tax season.
IRS.GOV
2021 tax filing season begins Feb. 12; IRS outlines steps to speed refunds during pandemic | Internal Revenue Service
With new PPP loans for small business owners, credits aplenty in all of the variety of stimulus bills, DELAYS from the IRS, fraudulent unemployment claims (yes, this is a thing) ... well, let's just say that this is going to be an interesting tax season ... for everyone.
Again.
We are here to help you navigate these (white water rapid) waters.
Even though the IRS delayed the opening of tax season this year, don't expect them to extend the filing deadline as well. The IRS has stated they have no plans to extend the April 15th tax deadline again this year.
Not all letters from the IRS involve full-blown audits. They might, for example, dispute your income reporting, cryptocurrency gains or losses, high rental losses, or home office expenses.
Though not an audit (yet), these types of notifications should absolutely be taken seriously. Let us know if you receive an IRS letter like this.
CNBC.COM
Your tax return could be flagged by the IRS. Here’s when it may happen
Today's the day, everyone! Tax Season is officially open.
Because of the IRS' delayed opening, this year's filing window is shorter than normal. Time is of the essence.
As you know, your 2020 taxes aren't going to look like every other year's, so get your appointment scheduled with a qualified pro ASAP. (That's us.) 😊
The IRS can only levy or seize your property when it results in financial recovery. This is known as the "no equity rule".
In other words, the IRS can only seize your property if it results in payment to them. For example, if you have a Camaro that is worth $10,000 and has a $10,000 loan on it, an IRS seizure will only get your bank paid on the loan. There will be nothing left for the IRS as there is no equity in it for them. Because of that, they legally cannot seize it. Same is true for your house.
The no equity law eliminates the vast majority of IRS seizures.
We know the tax world can be downright confusing, so today we're opening up the floor for Q&A: what questions can we answer, to help clarify the mystery world of paying Uncle Sam his dues?
Have you seen this list yet? This is what you'll need for your tax appointment this year. This list has been updated to reflect both stimulus bills and their respective benefits.
Changes have been made to the Paycheck Protection Program (PPP) to benefit small business owners. As the revamped PPP goes into effect TOMORROW ... take a look at the changes and details below.
BIT.LY
PPP Revamped To Benefit Smallest Businesses; Changes Start Wednesday
A pandemic-induced work-from-home situation does NOT guarantee that you qualify for the home office deduction. As always with the IRS, there are stipulations, and a typical W-2 employee will not qualify.
MARKETWATCH.COM
Can you claim the home office tax deduction if you’ve been working at home? Read this first
Some Friday humor...
(Good for a laugh, not actual tax advice!) ;)
"I'm not going to pay taxes. When they say I'm going to prison, I'll say no, prisons cost taxpayers a lot of money. You keep what it would have cost to incarcerate me, and we'll call it even."
- Jimmy Kimmel
2020 Tax Filing Tip:
If your income significantly increased in 2020 versus 2019 (i.e. if it took you OVER the threshold for the next round of stimulus checks), you should WAIT to file your 2020 taxes.
Here are the income limits in the current Senate bill (these are not yet final):
- Single filers with AGIs of 75 K or less
- Head-of-household filers with AGIs of 112,500 or less
- Married joint filers with AGIs of 150 K or less
The phaseouts happen fast. If your income gets above 160, then you'll be out of luck.
Being a tax professional is NEVER boring (especially in the last year).
Here's the latest news we're tracking: the new Senate version of the "American Rescue Plan" includes provisions that will impact people who have already filed their taxes.
NOW the first $10,200 of unemployment insurance is NOT taxable (until this past weekend, all of it was considered taxable income).
That means retroactive changes will have to be made to returns based on legislation that is still being passed. (We'll keep you updated if it does. The Senate version has to go through reconciliation with the House bill.)
This is why it really helps to have a live person in your corner. Get in touch with us if you need help understanding all of the changes.
The Senate passed the latest stimulus bill this weekend -- with some provisions -- so it's now being sent back to the House for approval.
Here are some of the changes in the Senate-approved bill:
- Lowers phase-out provisions for stimulus checks
- Provides $300/week in federal unemployment benefits through Sept. 6 and makes the first $10,200 in unemployment benefits tax-free in 2020 for households making less than $150,000 per year
- Removes federal minimum wage hike
- Removes funding for NY bridge and San Francisco railway projects
We'll put something out more definitively once it's been signed by the President.
This would be a great chance to get on our email list if you're not already, so toddle on over to our website and get on there to get the breakdown when it's ready.
CNB.CX
The Senate just passed the American Rescue Plan—here's how it differs from the House version
Here's what you need to know about the stimulus payments and your 2020 taxes:
Both the first stimulus payment from the March CARES Act and the second stimulus payment from the December stimulus bill are non-taxable events. In other words, you should NOT owe tax from them. Further, they do NOT count as income for determining whether you're eligible for government assistance or benefit payments.
If you missed them somehow and were eligible, that's when you claim the missing payments as a Recovery Rebate Credit on your 2020 tax return (we can help with that). That means that it will simply either increase the size of your total tax refund or lower the amount of taxes you owe.
If you don't usually file tax returns because you are under the income threshold, but are owed the stimulus payment, you will need to file a 2020 return. It doesn't mean that you'll have to pay tax; it is just what you need to do in order to collect the stimulus payments.
If you received the first round of PPP, you still might be eligible to apply again ("Second Draw" PPP). Your business is eligible for this second draw if you:
1) Previously received a First Draw PPP Loan and will or have used the full amount only for authorized uses;
2) Have no more than 300 employees; and
3) You can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
That final provision is a nice one because it means that we can take a look at a variety of circumstances that might make you eligible. Let us know if you need help.
There is a special window for smaller and minority-owned businesses to apply for new PPP funds before big firms -- a window that ends Tuesday, March 9th.
This is important because in 2020 (and especially in the first round of funding) many businesses missed out on receiving these loans because the program funds were depleted quickly. That was less of an issue in the second round of funding, but who knows what will happen with this "Second Draw".
Contact your bank or lender to apply ASAP if you qualify.
In certain odd cases, it might actually make sense to file "married filing separately" for your 2020 taxes even though you will (as a result) pay slightly more in taxes -- because by doing so, you will be able to receive a greater stimulus payment. It would then outweigh the greater tax you might pay.
This will not be the case for most, and it mostly will concern those filers whose income hovers around the phaseout thresholds.
If this is you, get in touch with us.
"When will I get my stimulus check?"
Some payments have already started to arrive via direct deposit. Technically, the IRS has until the end of 2021 to issue the payments. Like in the last two rounds, it depends on how and when you last filed.
The American Rescue Act passed, which means there are a host of new provisions available for taxpayers and businesses. We'll break these down in more detail in future days, but here are some of the broad strokes:
- $1,400 stimulus checks for individuals AND dependents
- $300/week federal unemployment insurance payments
- Expanded child tax credit to $3,000 for children ages 6-17 and $3,600 for children under age 6
- $7.25 billion in new PPP funds
NPR.ORG
Here's What's In The American Rescue Plan
2020 Tax Filing Tip:
If your income significantly increased in 2020 versus 2019 (i.e. if it took you OVER the threshold for the next round of stimulus checks), you should WAIT to file your 2020 taxes.
Here are the income limits in the current Senate bill (these are not yet final):
- Single filers with AGIs of 75 K or less
- Head-of-household filers with AGIs of 112,500 or less
- Married joint filers with AGIs of 150 K or less
The phaseouts happen fast. If your income gets above 160, then you'll be out of luck.
Being a tax professional is NEVER boring (especially in the last year).
Here's the latest news we're tracking: the new Senate version of the "American Rescue Plan" includes provisions that will impact people who have already filed their taxes.
NOW the first $10,200 of unemployment insurance is NOT taxable (until this past weekend, all of it was considered taxable income).
That means retroactive changes will have to be made to returns based on legislation that is still being passed. (We'll keep you updated if it does. The Senate version has to go through reconciliation with the House bill.)
This is why it really helps to have a live person in your corner. Get in touch with us if you need help understanding all of the changes.
As part of the recent stimulus bill, unemployment is now (partially) non-taxable (for most).
The first $10,200 of unemployment benefits are untaxable -- but only for those whose income is below 150K. This is a very real benefit for many, probably meaning about $1,500 in savings.
But if you already filed your 2020 return, don't amend it. If you are due a refund for these unemployment taxes, the IRS will automatically issue it.
CNBC.COM
$10,200 unemployment tax break: IRS plans to automatically process refunds
For businesses who received EIDLs from the SBA, payment on those loans has now been deferred until 2022.
OFFICIAL NEWS:
The April 15th tax filing deadline has been extended for all filers to May 17th.
Also from the IRS: "Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax."
The House has voted 415-3 to extend the PPP application deadline for businesses by 60 days -- from March 31 to May 31, plus an additional 30 days for application processing.
The PPP Extension Act of 2021 will now be considered in the Senate.
As always, we'll keep you updated with further news.
In certain odd cases, it might actually make sense to file "married filing separately" for your 2020 taxes even though you will (as a result) pay slightly more in taxes -- because by doing so, you will be able to receive a greater stimulus payment. It would then outweigh the greater tax you might pay.
This will not be the case for most, and it mostly will concern those filers whose income hovers around the phaseout thresholds.
If this is you, get in touch with us.
"When will I get my stimulus check?"
Some payments have already started to arrive via direct deposit. Technically, the IRS has until the end of 2021 to issue the payments. Like in the last two rounds, it depends on how and when you last filed.
The new unemployment tax break is available to people who make less than $150K. The IRS is now saying that unemployment benefits received in 2020 do not count toward your adjusted gross income, making more people eligible for the benefit.
CNBC.COM
IRS makes more people eligible for $10,200 unemployment tax break
The IRS has started issuing the third round of stimulus payments. No action is needed by most taxpayers. Payments will be issued automatically by direct deposit and through the mail as a check or debit card, usually via the same way they received the first and second stimulus checks.
Most people will get $1,400 for themselves and $1,400 for each qualifying dependent claimed on their tax return.
You can check the Get My Payment tool on IRS.gov for status of this payment.
IRS.GOV
Get My Payment | Internal Revenue Service
If you work from home as an employee you still cannot take a deduction for your home office. However, if you have a business or are self-employed, you can take that deduction.
As part of the recent stimulus bill, unemployment is now (partially) non-taxable (for most).
The first $10,200 of unemployment benefits are untaxable -- but only for those whose income is below 150K. This is a very real benefit for many, probably meaning about $1,500 in savings.
But if you already filed your 2020 return, don't amend it. If you are due a refund for these unemployment taxes, the IRS will automatically issue it.
CNBC.COM
$10,200 unemployment tax break: IRS plans to automatically process refunds
For businesses who received EIDLs from the SBA, payment on those loans has now been deferred until 2022.
