Estrada Phuong A Professional Accountancy Corporation

EXTEND CA TAX RETURNS WITH PPP LOANS IN 2020 AB 80, the bill that would allow up to $150,000 of expenses to be deducted if paid with PPP forgiven loan amounts has not yet passed. There has been no activity, and we can't get good information on when and if it will pass, and what will actually be included in the final bill. Here are a few important things to know:... We suggest you extend any returns if you received a PPP loan or had EIDL or other federal grant payments until we know the details; Consider filing extensions for your returns if you have already filed. You may be able to file a superseded return, rather than an amended return. Esthela Estrada Info provided by Spidell

Dear Clients, You have until 1/31/21 to request a 2020 retroactive EMPLOYEE RETENTION CREDIT ON ONLY $10,000 OF WAGES PER EMPLOYEE. ADP- INFORMED ME THAT YOU MUST CONTACT "CLIENT SERVICES" NO LATER THAN 1/15/21 TO BE ABLE TO REQUEST THE TAX CREDIT, NO EXCEPTIONS.PAYCHEX- NO INFO RECEIVED, BUT I WOULD ASSUME 1/15/21 WOULD ALSO SEEM TO BE REASONABLE. REQUIREMENTS:You must have had 50% decrease in gross revenues in a 2020 quarter as compared to the same quarter in 2019.ORYou must have been asked to close your doors due to Covid BENEFITS: The tax credit could be as high as $5000

Good News for Businesses: For the years 2021 and 2022, Employees' and Clients' meals PURCHASED AT A RESTAURANT , WILL BE 100% DEDUCTIBLE.

California law requires all employers of 5 or more employees to provide 1 hour of sexual harassment and abusive conduct prevention training to nonsupervisory employees and 2 hours of sexual harassment and abusive conduct prevention training to supervisors and managers once every two years. The state provides free classes, and the address is as follows: https://www.dfeh.ca.gov/shpt/... Alternatively, if you prefer to have a professional conduct the classes, please contact me and I will connect you with a professional.

TAX RELATED PROPOSITIONS 1. Proposition 15 did not pass (51.7% no votes to 48.3% yes votes). Proposition 15 would have assessed most nonresidential property at fair market value; 2. Proposition 19 passed (51.5% yes votes to 48.5% no votes). Proposition 19 revises the parent/child property tax base-year transfer and expands the property-tax base transfers for seniors, disabled persons, and disaster victims; and 3. Proposition 22 passed (58.4% yes votes to 41.6% no votes). Prop...osition 22 allows app-based drivers to remain independent contractors and requires the companies that hire them to pay certain benefits (e.g., specified wage guarantees, health care stipends) if certain conditions are met. Courtesy of Spidell

Dear Client, Banks are starting to accept PPP debt forgiveness applications. The U.S. Small Business Administration (SBA) released a simpler loan forgiveness application of 2 pages for Paycheck Protection Program (PPP) loans of $50,000 or less. This action streamlines the PPP forgiveness process to provide financial and administrative burden on PPP lenders and borrowers.... For PPP Loans of $50,000 or less, loan forgiveness is allowable even if the business had to lay off employees or reduce employee pay. For PPP Loans above $50,000, a reduction in employment may result in a reduction of the amount of the loan forgiven Regardless of whether the borrower uses the new simplified form or other application forms (3508 or 3508EZ) for loan forgiveness, lenders must confirm that the documents have been received and verify that the borrower has accurately detailed the dollar amounts listed on the forms. What does it all mean for you (the borrower)? It means that your lender will determine what documents they will need for the forgiveness, and that your documents must always be ready for an audit from the SBA for at least 10 years. IS the PPP Loan Taxable? No, both the IRS and California will not consider the PPP loan to be income; however, the expenses paid with the PPP Loan (payroll, rent, utilities, etc.) will not be deductible. In essence, the PPP Loan will create income by disallowing the expenses paid. There is a very small probability that Congress may change its mind and allow the deductibility of the expenses. Should I apply for forgiveness now? Yes, you may; however, if laws and requirements change in the future, you may not be entitled to utilize the new rules. Repayments of a PPP loan balance owed to the government must begin 10 months after the loan forgiveness deferral period ends. What can we do for you? We can direct you to your Lender to fill out the simplified form if your PPP loan was $50, 000 or less or we can assist you with the process at our hourly rate. We request a retainer of $550. When will the Loan Forgiveness process begin and end? We will begin the process in November 2, 2020 and end no later than May 31, 2021; we will not accept any applications or data after May 31, 2021. Please note that we will not be processing any forgiveness applications during the months of February, March and April 2021. If you would like to proceed with our PPP Loan forgiveness assistance, please do the following: 1. Sign and date the attached Engagement Letter; 2. Send us a $500 retainer; 3. Let us know if you want to apply in November 2020, January 2021 or May 2021.

PROPERTY TAX CONTROVERSY IN THE NOVEMBER BALLOT Split-roll measure The passage of Proposition 15, also called the split-roll measure, would repeal Proposition 13 protections for nonresidential commercial and industrial properties. These property owners would be required to pay property tax based on market value, instead of on the original purchase price indexed by no more than 2% per year. Residential properties, agricultural land, small businesses, and commercial and indus...Continue reading

The Employee Retention Credit The Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50 percent of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021. Eligible employers can get immediate access to the credit by reducing employment tax deposits they are otherwise required to make. Also, if the employer's employment tax deposits are not sufficient to cover the credit, the emplo...yer may get an advance payment from the IRS. For each employee, wages up to $10,000 can be counted to determine the amount of the 50% credit. Because this credit can apply to wages already paid after March 12, 2020, many struggling employers can get access to this credit by reducing upcoming deposits or requesting an advance credit on Form 7200, Advance of Employer Credits Due To COVID-19. Employers are eligible for the credit if they operate a trade or business during calendar year 2020 and experience either: the full or partial suspension of the operation of their trade or business during any calendar quarter because of governmental orders limiting commerce, travel, or group meetings due to COVID-19, or a significant decline in gross receipts. A significant decline in gross receipts begins: on the first day of the first calendar quarter of 2020 for which an employer’s gross receipts are less than 50% of its gross receipts for the same calendar quarter in 2019. See more

RECENT FORGIVENESS GUIDANCE FOR THE PPP LOAN FORGIVENESS: You, the borrower, may not be responsible for repayment of the loan if you use all the funds for forgivable expenses. Lenders will follow SBA guidance to determine the amount that is forgivable and will require an application with supporting documentation.... ELIGIBLE EXPENSES: Your loan funds can be used for: Payroll, including benefits, to retain employees. Mortgage interest payments for mortgages incurred prior to February 15, 2020. Rent payments on leases dated before February 15, 2020. Utility payments under service agreements dated before February 15, 2020. ADDITIONAL REQUIREMENTS: Expenses MUST BE INCURRED AND PAID WITHIN THE 8-WEEK period that begins on the date when you received your loan funds. 2. No more than 25% of the loan forgiveness amount can be attributed to non-payroll expenses (e.g., mortgage interest, rent, or utility payments). 3. Retain existing full-time employee headcount. 4. Maintain at least 75% of existing employee compensation levels. 5. Keep track and document eligible expenses within the 8-week period. It will help with the forgiveness application process. Data from USBAnk

$1200 TAX REBATES The Government will be sending everyone with a valid Social Security number $1200 per person and $500 per child under the age of 17. For Singles income must be less than $ 75,000 ($99,000 phase out) For Married income must be less than $150,000($198,000 phase out)... It will be based on the 2018 or 2019 tax return that has been filed. HOW DO I GET THE PAYMENT? BY MAIL ( 4-6 WEEKS) OR BY DIRECT DEPOSIT (2-4 WEEKS) 1. TO REGISTER FOR DIRECT DEPOSIT- GO to www.IRS.GOV AND USE THE Get My Payment Tool 2. NOT REQUIRED TO FILE- If you have not filed a tax return in either 2018 or 2019, using the non-filer tool or other tax filings methods is the only way to receive the payment. You will provide your address and your bank information GO to www.IRS.GOV AND USE THE Economic Impact Payment Tool