Yes it's time again for shameless begging and promotion. We thank you for nominating us and remember to cast your votes every day and tell your friends/ neighbors/people you don't know to cast their vote for us as well.
Can we go for 3 in a row?
Thanks again!
Lindstrom Sorenson & Associates
https://rrstar.gannettcontests.com/What-Rocks-2020/
RRSTAR.GANNETTCONTESTS.COM
What Rocks 2020
If you have missed this info thank to the Belvidere and Rockford Chambers of Commerce for this info relating to more "free" money to businesses.
https://www2.illinois.gov/dceo/SmallBizAssistance/Pages/C19DisadvantagedBusGrants.aspx
WWW2.ILLINOIS.GOV
Small Business Assistance
In case you were wondering about the PPP status at the SBA level here's a headline for you to ponder.
Banks grow concerned about PPP forgiveness
The process of forgiving Paycheck Protection Program loans is facing delays and complications as banks grapple with unresolved questions and what some describe as conflicting information. The Small Business Administration says it has not accepted or rejected any of 96,000 forgiveness applications received as of Thursday.
In all the PPP excitement I forgot this
https://www.indycar.com/News/2020/08/08-30-WWTR-Race-2-Recap
INDYCAR.COM
Newgarden Staves Off O’Ward at WWT Raceway for Second Win of Season
Thank you for voting for us. You still have more chances to stuff the ballot box through Friday.
https://rrstar.gannettcontests.com/What-Rocks-2020/gallery?group=365917
RRSTAR.GANNETTCONTESTS.COM
What Rocks 2020
Last chance to stuff the ballot box for Lindstrom Sorenson and did I mention that you could win $100 from the RRStar for voting? Pay for votes. I like this.
https://rrstar.gannettcontests.com/What-Rocks-2020/gallery?group=365917
RRSTAR.GANNETTCONTESTS.COM
What Rocks 2020
Today the IndyCar championship is on the line as our guy Josef Negarden tries to catch points leader Scott Dixon. Please tune one of your devices to NBCSN at 1:30 Central and root Josef on to his 3rd Indycar championship.
Admittedly we've been suffering from PPP burnout but about 2 weeks ago the SBA again simplified the PPP forgiveness process for loans less than $50,000, basically making them totally forgivable.
Even if you have less employees or reduced employee pay the SBA is now automatically forgiving everything under $50,000. New form 3508S is now two pages but you will still have to provide your lender with certain documentation.
The only rub now is if your lender is ready to accept and process this form. Some are, some are not. If they are ready to process 3508S then you should beat the Christmas rush. Remember if you need any help you can contact us for assistance. It gets more complicated if you received an EIDL grant.
In all cases you can apply for forgiveness any time before the maturity of the loan, but you must begin to make payments starting in 10 months after the end of your covered period.
Unless we have a second round of this stuff....In the meantime please support your local Illinois restaurants!!
Congratulations to long-time client and friend Todd Donnelly for having the #1 song in the country on Tikipod Radio. If Todd were truthful he would tell you the highlight of his career continues to be the time I appeared with his band Mr. Myers Band and sang Brown Eyed Girl.
TikiPod Radio
October 22 at 4:37 PM ·
Here's this week's Island Heat Top 20. Congrats to Todd Donnelly on his debut at Number 1 with "Easy on Yourself." Tune in Friday at 5 PM ET and Saturday at 10 AM ET to hear the countdown.
www.tikipod.net
Here's the little-publicized controversy raging behind the scenes with PPP forgiveness. I will try to keep a complicated subject simple.
Up until now, the IRS has consistently stated that you cannot deduct expenses paid with the PPP loan. Effectively making PPP taxable. I sincerely doubt Congress as a whole will ever get around to changing this interpretation to make it tax free.
So here comes the controversy. You have the loan. It has not yet been forgiven and there's little chance it will be by December 31. How do you prepare your 2020 tax return?
1. Deduct the expense as normal and don't recognize the PPP "income" until 2021 assuming that's when it is forgiven?
2. Treat the expenses as non-deductible in 2020 effectively treating the PPP as taxable this year even if you don't have forgiveness by December 31? Accounting principles would seem to not allow this. But wouldn't you be tempted to do this if a new administration and Congress sets its sights on increasing your taxes? Hmm.
3. Deduct the expenses as normal in 2020 and then amend 2020 if I get forgiveness in 2021. Assuming they say you can go backwards? This is messy.
4. But wait! I report my income on the cash basis! I got the cash! I want to pay tax now vs. roll the dice with a new Administration. But nobody said it was forgiven until they say it is.
5. Extend the filing of my business returns until next Sept/Oct and let the dust clear.
6. Hell if I know.
I tend to think #1 is the correct answer, with #5 coming in a close 2nd place but of course we are waiting for someone to say something....Some are looking to the SBA but this is clearly the job of the IRS.
So last week I opined that the IRS had not given us clear rules on when to recognize the PPP forgiveness income (aka not deduct the expenses) if you haven't yet received forgiveness. Demonstrating the amount of influence I have the IRS came out with a ruling literally the next day. And it of course is not simple. And there is a battle raging in the blogosphere over what the IRS did to take a simple matter and confuse it. We will try to distill the insanity for you.
Bottom line. If you got PPP this year you should really just pay tax on it (offset the deductible expenses) this year. End of story. Under the assumption that you reasonably expect forgiveness of most if not all of the PPP loan. Next year you may/will be forgiven and it technically becomes "nontaxable" income in 2021.
There is a second method where you deduct the expenses this year but report the "income" next year. This isn't really recommended as it opens you up for audit and how many tax attorneys do you want to hire and do you have time to litigate it in tax court with an uncertain outcome? I think we all know the answer to that.
Unless Congress gets around to changing the rule.....And then there's this:
https://www.journalofaccountancy.com/news/2020/nov/aicpa-members-push-for-deductibility-of-ppp-funded-expenses.html?utm_source=mnl:cpald&utm_medium=email&utm_campaign=24Nov2020
JOURNALOFACCOUNTANCY.COM
AICPA mobilizes members to push for deductibility of PPP-funded expenses
If you didn't know today is #GivingTuesday and many organizations have special matching donations going on this day due to the generosity of many individuals and charitable foundations and trusts.
Check out your favorite charity/organization to see what they have going on today. However, if you're just feeling kind might I suggest a donation to the Easterseals Academy in Machesney Park where daughter Erika works and support their work with Autistic children.
Today, due to the generosity of some foundations and individuals, your contribution to Easterseals will be TRIPLED. So $100 becomes $300. Not a bad deal. And this year EVERYONE gets a tax deduction of $300 on their 2020 income tax return whether or not they itemize. Win/win.
www.eastersealschicago.org. Select Easterseals Academy in Machesney Park. Just sayin'.
EASTERSEALSCHICAGO.ORG
www.eastersealschicago.org
New PPP loans? New Stimulus Checks? PPP Taxability? The long-awaited bill has passed but at this moment it has not been published nor dissected by commentators.
People are already calling us asking questions about the new bill. Please. Put. Down. The. Phone. The bill has not been published.
We will, as always, give you basic information on this new round of craziness but if you have specific questions:
1. PPP-call/e-mail your bank as they are the ones who will know all of the rules and will be responsible again for administering the latest PPP program.
2. Stimulus-please go to www.IRS.gov for constant updates on the newest round of stimulus checks.
The waiting is the hardest part.
https://www.youtube.com/watch?v=uMyCa35_mOg
YOUTUBE.COM
Tom Petty And The Heartbreakers - The Waiting (Official Music Video)
More on this to come as soon as the ink is dry. They just can't make it easy can they?
Lawmakers had also appeared to resolve a nettlesome dispute over whether businesses that received PPP loans, and had them forgiven, will be allowed to deduct the costs covered by those loans on their federal tax returns. Those costs would be deductible under a final agreement so long as a PPP recipient can show a loss in revenue in 2020 compared to prior years, according to a lawmaker briefed on the deal.
It's time to try and distill the latest round of PPP, stimulus and tax law changes. Here goes:
INDIVIDUALS
1. The new $600 stimulus checks are coming. The phase-outs are the same as before. It is based on your Adjusted Gross Income (go look at your 2019 tax return). NO stimulus if your AGI is over $87,000 single, $174,000 Married, $125,000 Head of Household. PLEASE go to www.irs.gov for more information and to check the status of your stimulus.
2. $600 for every family member UNDER age 17. Kids over 16 or in college are in no-man's land if you are claiming them. There is no family cap. If your family (married-joint) has 8 kids you get $6,000.
3. Payment will come via direct deposit. If you don't get DD it will come via check or debit card, or under a little-known provision you can also get Dave & Buster's game credits or lottery tickets.
4. The non-itemizer charitable deduction was raised for 2020-21 to $600 from $300 on a joint return. NO cash or clothing. Actual checks/debits are the only contributions that count.
5. Flexible spending accounts can now carry over unused benefits of up the the full annual amount from 2020 to 2021 and 2021 to 2022. So "use it or lose it" has been suspended.
6. Teachers can deduct "personal protective equipment", disinfectants, etc if they are actually in a classroom. But they are part of the whopping $250 educator deduction. Big deal.
BUSINESS
1. The small employer refundable payroll tax credits for paid sick & family leave has been extended through March 2021. So the 80 hour 100%/67% paid leave rules still apply. Any bets that gets extended to June?
2. Employee Retention Credit is increased and the revenue decline formula is now 20%. And the limit on wages per employee is now $10,000 per quarter, not $10,000 per year. Less than 500 employees. And now it does not matter if you got PPP or not. THIS ONE COULD BE HUGE.
3. You can now deduct 100% of business meals, including carry out or deliver meals for 2021 and 2022. So if your favorite restaurant is still closed you can have your client over for a meal and business discussions. Not that anyone wants to meet with you in person right now.
4. You can set up an employer education reimbursement plan and pay your eligible employee up to $5,250 toward their student loan payments. Be careful here. There are income limits and discrimination rules and your legal team needs to draw up an actual plan.
PPP 2-EVOLUTION (possibly to be followed by PPP3-Rise of the Lycans)
1. PPP2 is now open. If you got PPP1 you can get PPP2 as long as your income is 25% less in 2020 than any corresponding quarter in 2019 and you have less than 300 employees.
2. Same 2.5 times average 2019 payroll unless you're in the restaurant industry or any business with an NAICS code beginning with 72 (yes slot businesses with "food"). Then you get 3.5 times 2019 average payroll. Personally you Code 72 people should get even more since you're the "whipping boys" of the pandemic.
3. Same 60% payroll rule. Same 8/24 week periods. But NOW you can also count supplier costs for example. Yes that includes perishable goods within the 24 week window.
4. The EIDL grant you received is now NOT deducted from your PPP loan. So if your bank/SBA said you have to pay that portion of PPP back you're in luck. You don't
5. And finally, as predicted. PPP forgiveness is now treated as TAX EXEMPT income in the year of forgiveness. No limits on your deductions.
https://www.youtube.com/watch?v=6CB9OrGZ7-c
YOUTUBE.COM
Mark Knopfler, Eric Clapton, Sting & Phil Collins - Money for Nothing Live
HUGE thanks last week to Dr. Dan Lendman and State Street Animal Hospital for the Great Harvest goodies followed up by Nunzios pizza from Kip and Crimson Ridge. Getting an early start on reducing their 2020 taxes.
You know the saying, a well-fed accountant .....is eating too much.
Here is our personal and business short email blast from yesterday in cased you missed it. It's our attempt to try to further clarify what's going on.
As always, please go to IRS.gov for the status of your stimulus check as we do not control when you receive your check. If you are still questioning whether you will receive a check please refer to your copy of your 2019 Form 1040 Line 8b Adjusted Gross Income.
If you want to know about how to begin applying for PPP2 please call your bank.
Today it's Casey's breakfast pizza courtesy of Wendy Holder and Design Plumbing. AND 2 new pizza cutters for backup!
Now that I have 4 pizza cutters what's the over/under on when I end up with zero?
Don't like using FB as a job board but it's come to that. We are just exploding here and are in need of another bookkeeper to help assist with bookkeeping and review of small business accounting, preparation of payroll and sales tax returns. And whatever else we can think of.
It's a full-time position with health insurance (95% paid by us-who else does that?), 401(k), vacation. The candidate should have good knowledge of QuickBooks, accounting in general, and be willing to work with multiple businesses on a daily basis. Experience with payroll preparation would also be helpful.
Please send me an IM if you know anyone. And information can be sent to steve@lsallp.com. We are very willing to consider a wide range of experience levels.
https://www.youtube.com/watch?v=GH3bgLY0TnQ
LINDSTROM SORENSON & ASSOCIATES
Bookkeeper
Reminder: Because of all the end of year tax and stimulus madness the IRS will NOT allow transmission of tax returns to begin until Feb 12. We can begin to transmit them to our software provider on Feb 9.
Also, it is vital that you provide the correct information regarding your 2 stimulus payments. You will receive IRS Notice 1444 and 1444-B which will be needed to prepare your 2020 income tax returns. If you don't have them you will need to find your bank records to verify the EXACT amount of your stimulus payment. Without the exact amount your tax return will most likely be delayed.
I can't find an appropriate video to tag onto this so instead here's a fun little version of a classic.
https://www.youtube.com/watch?v=v6G3EGRUmCs
YOUTUBE.COM
I'm A Believer - MonaLisa Twins (The Monkees Cover) - NEW ALBUM!
HUGE thank you to Maria Frisella and John's Pizza for lunch today. Their food is wonderful, and on St Patrick's day if you're looking for the best corned beef I've ever had give them a try.
Just a reminder that this tax season (again) we are suspending all in-person appointments. In our current state it is unwise for Howie and myself to sit in a closed office for 8-10 hours, 5-6 days a week. It's a major inconvenience but until the craziness subsides (taxes AND virus) we are forced to do this for the next 10 weeks.
We ask that you drop off, fax, mail, email your documents. If you have specific questions or need other help please schedule a phone interview or Zoom call and we would be happy to accommodate you. We can send you a secure link to download documents.
If you've had your rabies shots we would be happy to schedule an in-person appointment. Please call 815-282-1288 or email Serena@lsallp.com or Susan@lsallp.com
Thank you for your understanding and hope to see you in the flesh sooner than later.
https://www.youtube.com/watch?v=OsjTO0yZQjk
YOUTUBE.COM
You Won't See Me (Remastered 2009)
Just like a college DJ I'm doing requests today. There's some confusion regarding PPP forgiveness and EIDL. In the original PPP1 you didn't get full forgiveness if you got the $10,000 (or less) EIDL grant. You in essence had to pay that back. In the mean time you remember hearing that Congress said the EIDL grant $ was going to be forgiven as well.
Of course the battleship doesn't turn that quickly. People are now getting bills for repayment of that portion of their PPP. Since you have a signed legal agreement between you, your bank and the SBA you have no choice but to make those payments until they tell you to stop. My assumption is that when the banks are told to officially forgive the EIDL portion of the PPP1 loan you'll somehow get your money back. Like they say, I stayed at a Holiday Inn Express once so I'm sure I'm 100% accurate here
.
If you want to know more only your bank knows and from what I know nothing has been finalized.
I know you didn't request this but you should check out these Filipino brothers. They are awesome.
https://www.youtube.com/watch?v=QzpC5HOhsN0J
YOUTUBE.COM
REO Brothers - New Kid In Town by The Eagles
So it's very possible that Congress is about to completely blow up this current tax filing season. Stay tuned for the final word.
Will you have to amend your return that you have already filed? Maybe.
Will your return and refund have to be delayed for an unknown number of days if the IRS has to change it's program, revise the 1040 and pass it along to all of the software companies? Maybe.
Will they extend filing to June 15? Maybe.
This is unprecedented.
Stay tuned.
If you're wondering (and you are), this is all about the potential non-taxability of unemployment benefits received in 2020
Why stop now? Let's just gut the entire Internal Revenue Code in the middle of tax season. We're on a roll.
I will have an update on the latest tax changes just passed as soon as the drugs wear off.
Oh and here is the AICPA's response to the IRS Clown Car.
In letters to Treasury and the IRS, the AICPA has requested that payment and filing deadlines be extended to June 15.
“This selective decision by the IRS unfortunately creates more bureaucracy and confusion and is out of sync with real world stresses that taxpayers, tax practitioners and small businesses are dealing with,” said Melancon.
OK after the Sunday rant apparently the IRS was working overtime anticipating the unemployment chaos and has already come up with the fix and an actual explanation on their web site today. Next up is waiting for all of the software companies to update their versions and get approval from the IRS. I'm guessing it's a priority at the moment.
Not sure yet about you people who had to pay back some or all of the Obamacare subsidy.
Baby steps.
https://www.youtube.com/watch?v=LyVg2u4stSQ
YOUTUBE.COM
REO Brothers - Getting Better | The Beatles
It's a party here now. As of 30 minutes ago our software can handle yesterday's change in unemployment taxation. So now we get to sift through and re-check and process over 100 returns being held up. It's not like accountants all over the country are all way behind or anything, and don't have anything better to do.
In the meantime the AICPA is asking tax preparers to petition their representatives to extend the tax filing date until June 15. As the IRS is still refusing to budge because as you know they are not at all behind in their processing...............
Green light. All systems go. (unless you repaid some Obamacare premium-they still don't want you to file)
When's the last time you heard this song? Reminding me of the time I ran into Rick James at the CherryVale Mall. True story.
https://www.youtube.com/watch?v=iWa-6g-TbgI
YOUTUBE.COM
Eddie Murphy - Party All the Time (Official Video)
In a surprising development the cash starved State of Illinois has jumped on board the Fed's non-taxable unemployment train. Illinois is saying the same thing as the IRS:
If you have filed already DON'T file an amended return. They are working on a way to isolate those returns and get you a refund. Some day. Some way.
Don't file your return yet until the bugs are worked out in the software (coming soon?) We probably have at least 100 returns we can't file at the moment sitting in a pile waiting for software updates. With more every day.
So much for the much-hoped Accountant Stimulus Plan where we could charge a bunch of money for amended tax returns.
https://www.youtube.com/watch?v=eH44d9UTDUs
YOUTUBE.COM
SOMEDAY SOMEWAY By Marshall Crenshaw