Business Management Associates

Get ready to file Form 941 Employer's Quarterly Federal Tax Return (and other forms needed) for the 3rd quarter which deadline is October 31, 2021. Contact us!

Tax Relief for Victims of Hurricane Ida Individuals and business tax returns that had a valid extension to file their 2020 return, now are due until January 3, 2022, for any area designated by the Federal Emergency Management Agency (FEMA). Also, it applies to quarterly estimated income tax payments and quarterly payroll.

Meals and food expenses deductions for 2021 and 2022. IRS issued notice 2021-25 on April 8, 2021, applying a temporary deduction rate of 100 % for restaurant meals, not including prepackaged grocery meals. Nonetheless, 50% meal deduction still applies for purposes of Section 274 for all other entertainment and business meal expenses.

Tax breaks for charitable donations In the latest provisions of the coronavirus relief bill, taxpayers are able to receive a $300 tax break for charitable donations made before December 31, 2020. The passing of the $2 trillion coronavirus relief bill has resulted in some provisions which provide relief to households and flexibility in retirement savings. This will be beneficial to those who would like to save a little on tax deductions while supporting those in need.

Tax breaks for charitable donations In the latest provisions of the coronavirus relief bill, taxpayers are able to receive a $300 tax break for charitable donations made before December 31, 2020. The passing of the $2 trillion coronavirus relief bill has resulted in some provisions which provide relief to households and flexibility in retirement savings. This will be beneficial to those who would like to save a little on tax deductions while supporting those in need.

Upcoming October 15 Deadline . . The deadline for filing your 2019 tax return on extension is coming up quickly. The IRS currently recommends filing electronically, to continue following current social distancing rules and to speed up the process. Additionally, payment is also recommended to be done electronically as many checks sent into the IRS remain uncashed due to COVID-19. Although mailed payments will still be posted as the date received rather than the date processed..., electronic filing and payment significantly speeds up the whole process, so you won’t be left wondering what’s going on with your taxes. . . For anyone expecting a refund, the IRS also recommends the use of direct deposit as it is faster and more secure than having a paper check delivered in the mail. See more

Simplified PPP forgiveness process for loans of $50,000 or less . . The new SBA Form 3508S is available to borrowers with a loan of $50,000 or less. A new interim final rule allows users of the Form 3508S to be exempt from any reductions resulting from reductions in full-time-equivalent employees and reductions in employee’s salary or wages. This means users now have the option to use the Form 3508, Form 3508 EZ, and the Form 3508 S depending on loan amount and situation of t...he business. . . More than 68 percent of the 5.2 million PPP loans approved by the SBA will be eligible to use the new simplified form. Although these borrowers won’t need to make complicated calculations, they will still need to provide documentation of payroll and nonpayroll costs to the lender. See more

The Trump administration’s potential proposal for H-1B visa holders . . Foreign-born scientist and engineer H-1B visa holders could potentially be prevented from being allowed to work in America if the potential minimum wage proposal of $150,000 to $250,000 or more per year is approved. Currently, only about 5% of H-1B visa holders are paid at this rate, which would potentially eliminate 95% of highly-skilled H-1B visa holders currently and potentially working in the United States. This would lead to the exclusion of younger talent as this proposal would limit American companies to hire mid to late-career professionals. It could also harm startup companies, smaller firms, and companies trying to expand in the United States, and could also potentially encourage firms to offshore jobs abroad.

Stimulus Check Deadline Extension . . The deadline to claim your missing stimulus check through the IRS’s non-filers tool has been extended to November 21, 2020. Individuals are being urged to meet the deadline as the non-filers tool will no longer be available past the deadline. Any eligible individuals who don’t meet the November 21 deadline will still be eligible to receive the check, but will have to wait until next year to get it. .... . When using the IRS’s non-filers tool, eligible individuals will be asked to provide personal information. To get the payment quicker, individuals can choose to receive the amount via direct deposit. If this option is not selected, a paper check will be delivered in the mail and can be tracked with the use of the IRS’s GET MY PAYMENT tool. . . Individuals who are eligible to receive special tax benefits must file a regular tax return as soon as possible to determine if the individual is entitled to receive any stimulus payment. See more

October 15th deadline for stimulus checks . . Although a majority of people have received the first stimulus check without having to do anything, there are still nine million people who haven’t received their payment. Those nine million people are mainly comprised of those who don’t normally file taxes, which includes older adults, retirees, and SSDI recipients. Those eligible recipients should have received an IRS Notice 1444-A on September 24th with instructions on how to u...se the IRS Non-filers tool in which eligible recipients must provide information to claim the stimulus payment. . . The deadline to claim the $1,200 stimulus check ends on Oct 15,2020. . . If this deadline is missed, the only way to claim payment will be to file for federal income tax return. See more

Upcoming October 15 Deadline . . The deadline for filing your 2019 tax return on extension is coming up quickly. The IRS currently recommends filing electronically, to continue following current social distancing rules and to speed up the process. Additionally, payment is also recommended to be done electronically as many checks sent into the IRS remain uncashed due to COVID-19. Although mailed payments will still be posted as the date received rather than the date processed..., electronic filing and payment significantly speeds up the whole process, so you won’t be left wondering what’s going on with your taxes. . . For anyone expecting a refund, the IRS also recommends the use of direct deposit as it is faster and more secure than having a paper check delivered in the mail. See more

Main Street Loan Access . . Since the pandemic started, the Federal Reserve is still trying to determine the best solution for business lending. Currently only 0.2% of the $600 billion relief program has been processed, so the Fed is continuing to update guidance for banks. .... . The Federal Reserve and the Treasury Department are now being pressured to allow commercial real estate businesses to access the Main Street Lending Program. Many believe that the funds should be made available to help small hotels and other indebted companies as these types of businesses are not allowed to take on new debt thus are unable to apply for any type of pandemic relief. . . The Fed and Treasury are considering expanding the loans to indebted companies but have decided for now that the conditions do not warrant such changes. This decision was made because these businesses are able to receive financing through other means. . . Fed Chairman Jerome Powell believes that the Main Street program would be useful to smaller business with limited payroll if they were able to receive a loan below the minimum $250,000. The main problem is that loans under $100,00 tend to use a lot of personal guarantees and that is not something they currently have the capabilities for. . . The Fed is going to continue doing everything that they can to work with banks to come up with the best regulatory and supervisory adjustments to serve businesses during this time.Main Street Loan Access Since the pandemic started, the Federal Reserve is still trying to determine the best solution for business lending. Currently only 0.2% of the $600 billion relief program has been processed, so the Fed is continuing to update guidance for banks. The Federal Reserve and the Treasury Department are now being pressured to allow commercial real estate businesses to access the Main Street Lending Program. Many believe that the funds should be made available to help small hotels and other indebted companies as these types of businesses are not allowed to take on new debt thus are unable to apply for any type of pandemic relief. The Fed and Treasury are considering expanding the loans to indebted companies but have decided for now that the conditions do not warrant such changes. This decision was made because these businesses are able to receive financing through other means. Fed Chairman Jerome Powell believes that the Main Street program would be useful to smaller business with limited payroll if they were able to receive a loan below the minimum $250,000. The main problem is that loans under $100,00 tend to use a lot of personal guarantees and that is not something they currently have the capabilities for. The Fed is going to continue doing everything that they can to work with banks to come up with the best regulatory and supervisory adjustments to serve businesses during this time.

Despite the COVID-19 pandemic, students are going back to school this fall, either remotely, in-person or under a hybrid schedule. In any event, parents may be eligible for certain tax breaks to help defray the cost of education. Here is a summary of some of the tax breaks available for education. . . 1. Higher education tax credits. Generally, you may be able to claim either one of two tax credits for higher education expenses but not both.... With the American Opportunity Tax Credit (AOTC), you can save a maximum of $2,500 from your tax bill for each full-time college or grad school student. This applies to qualified expenses including tuition, room and board, books and computer equipment and other supplies. But the credit is phased out for moderate-to-upper income taxpayers. No credit is allowed if your modified adjusted gross income (MAGI) is over $90,000 ($180,000 for joint filers). The Lifetime Learning Credit (LLC) is similar to the AOTC, but there are a few important distinctions. In this case, the maximum credit is $2,000 instead of $2,500. Furthermore, this is the overall credit allowed to a taxpayer regardless of the number of students in the family. However, the LLC is also phased out under income ranges even lower than the AOTC. You can’t claim the credit if your MAGI is $68,000 or more ($136,000 or more if you file a joint return). For these reasons, the AOTC is generally preferable to the LLC. But parents have still another option. . . 2. Tuition-and-fees deduction. As an alternative to either of the credits above, parents may claim an above-the-line deduction for tuition and related fees. This deduction is either $4,000 or $2,000, depending on the taxpayer’s MAGI, before it is phased out. No deduction is allowed for MAGI above $80,000 for single filers and $160,000 for joint filers. The tuition-and-fees deduction, which has been extended numerous times, is currently scheduled to expire after 2020. However, it’s likely to be revived again by Congress. In addition to these tax breaks, there are other ways to save and pay for college on a tax advantaged basis. These include using Section 529 plans and Coverdell Education Savings Accounts. There are limits on contributions to these saving vehicles. . . Note: Thanks to a provision in the Tax Cuts and Jobs Act, a 529 plan can now be used to pay for up to $10,000 annually for a child’s tuition at a private or religious elementary or secondary school. https://businessmanagementassoc.com/covid-19-update-educat/

THE TRUTH ABOUT YOUR TAX DEBT . There are approximately 8 million* individuals and business owners who have tax debt, and the IRS is going after them with unprecedented levels of aggressionfor instance, property seizures have increased by 230%** in the last decade. . The IRS likely has access to all of your financial information, including both personal and business assets.... Evading tax debt can come with very heavy prices: felony conviction, 5 years imprisonment, fines as high as $250,000 and the expensive cost of prosecution***(26 USC 7201). . The IRS intends to revoke and deny passports to delinquent taxpayers under a new law called FAST Act (new section 7345 of the tax code). . If a taxpayer has assets and owes back taxes, then that tax debt takes priority, in the eyes of the IRS, over everything else, including your home, cars, investments, business and paycheck. . These days, it's more important than ever to have an advocate who can take the IRS head-on, armed with a vast knowledge of the tax debt relief programs that can save you thousands. Dealing with the IRS can be daunting, so having representation that works with the IRS all the time and knows how to negotiate on your behalf can get you the best results. See more

Thousands of small businesses are closing down amid the Covid-19 pandemic, with restaurants holding a strong lead ahead of retail and beauty. Despite restaurants catering to customers with outside seating and take-out, revenue continues to decline as they continue to remain closed for dine-in. The pandemic has caused continued business operations to be a huge gamble as sales drop. Hundreds of small businesses have applied for bankruptcy from February to July, while a lot of b...usiness owners are trying to close down before they are forced into bankruptcy. . . Covid Bankruptcy may be a lifeline for businesses to survive Covid. . . Chapter 7 vs Chapter 11 vs Subchapter 5 . . CH 11 - Options to remain operational but buy some time to renegotiate debt. CH 5 Intended for small businesses to file and quickly process bankruptcy. Allows owners to retain interest in business while restructuring debt. Ch 7 Complete liquidation. See more

Approximately $13.9 million in interest payments were made to taxpayers who filed their 2019 federal income tax returns & are receiving refunds. The interest payments average about $18 & will be paid out to taxpayers who filed a 2019 return by this year’s JULY 15 deadline. Most interest payments will be issued separately from tax refunds. By law, these interest payments are taxable & taxpayers who receive them MUST report the interest on the 2020 federal income tax return they file next year. In January 2021, the IRS will send taxpayers a Form 1099-INT to anyone who receives interest totaling at least $10.

All Required Minimum Distributions (RMD) have been suspended for 2020. All RMDs taken before January 1st may be rolled back into their retirement account until AUGUST 31, 2020! RMDs from tax-deferred retirement accounts now begin at age 72 for anyone who turns 70 & 1/2 after December 31st, 2019. If you turned 70 & 1/2 before 2019, the old law still applies which states you MUST take your first RMD by APRIL 1st, 2020 and continue to take your RMDs by the end of each calendar year. Failure to do so could result in a 50% penalty on the portion not withdrawn.

Starting August 10th, 2020, the Rebuild VA Grant Fund program will be available for struggling businesses in Virginia! The program is meant to assist small businesses and non-profit organizations in getting back on their feet due to circumstances from COVID-19. Businesses approved for the grant can receive up to three times their monthly expenses with a maximum of $10,000! This grant can help businesses including restaurants, brick and mortar retail, fitness facilities, personal care services, entertainment/public amusement facilities, and campgrounds.

The IRS has given direction to businesses to report the wage amounts of qualified sick/family medical leave paid to employees under the Families First Act passed in response to COVID-19. The act allows employees at companies with 500 or less employees to receive paid sick/family medical leave due to circumstances where employees are unable to work because of COVID-19. Employers will be required to report sick/family medical leave amounts on Form W-2, Box 14 or in a separate statement. These requirements are intended to provide employees pertinent information to claim qualified sick/family medical leave equivalent credits under this act.