Massi Hadaegh CPA, Inc.

House joins Senate in approving 5-week PPP extension! The extension is intended to provide more time for small businesses to apply for the approximately $129 billion in PPP funding remaining. The PPP was launched in early April as the COVID-19 pandemic battered the U.S. economy and forced many businesses to close. The program provides forgivable loans that small businesses and other qualifying entities can use to cover payroll and other select costs.

On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA) in an attempt to address many concerns expressed by the small business community around the Paycheck Protection Program (PPP) aimed at providing COVID-19 relief.

PPP Forgiveness Changes Coming as Senate Passes House Bill The U.S. Senate passed the House version of Paycheck Protection Program (PPP) legislation Wednesday night, extending the time allotted to spend the funds from eight-week period to 24 weeks. Following is a summary of the legislation’s main points:... 1. The payroll expenditure requirement drops to 60% from 75% but is now a cliff, meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven. 2. Current PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. New PPP borrowers will have a 24-week covered period, but the covered period can’t extend beyond Dec. 31, 2020. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness. 3. Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30. 4. The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. New bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions. 5. New borrowers now have five years to repay the loan instead of two. Existing PPP loans can be extended up to 5 years if the lender and borrower agree. The interest rate remains at 1%. 6. The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act. 7. June 30 remains the deadline for applying to receive a PPP loan. #PPP #PaycheckProtectionProgram #SBA #Loan

IRS Denies Tax Deductions For Wages, Rent Paid With Forgivable PPP Loans IRS notice confirms you can’t claim tax deductions, even for the wages, rent, etc. that are normally fully deductible.

IRS Economic Impact Payment: Update Your Direct Deposit IRS has released a new web tool that will allow taxpayers to update their direct deposit information to receive their stimulus checks (Economic Impact Payments) more quickly. This tool, which is now available, is available to those taxpayers who have filed 2018 and/or 2019 tax returns and is separate from the tool used by non-filers. The new tool, Get My Payment, which is available now, will: ... Provide you with the status of your payment, including the date your payment is scheduled to be deposited into your bank account or mailed; Advise you of your payment type; and Allow eligible taxpayers a chance to provide bank account information to receive payments more quickly rather than waiting for a paper check. This feature will be unavailable if the Economic Impact Payment has already been scheduled for delivery. Click Here: https://www.irs.gov/coronavirus/get-my-payment Entering bank or financial account information will allow the IRS to deposit your payment directly into your account. Otherwise, your payment will be mailed to you as a paper check (that will slow the receipt of your check).

Taxpayers Should be Aware of Coronavirus-Related Scams Taxpayers should be on the lookout for IRS impersonation calls, texts and email phishing attempts about the coronavirus or COVID-19 Economic Impact Payments. These scams can lead to tax-related fraud and identity theft. Here’s what taxpayers should know:... The IRS will not call, email or text you to verify or request your financial, banking or personal information. Watch out for websites and social media attempts to request money or personal information. The official website is IRS.gov. Don't open surprise emails that look like they’re coming from the IRS or click on attachments or links. Taxpayers should not provide personal or financial information or engage with potential scammers online or over the phone. Forward suspicious emails to [email protected], then delete. Go to IRS.gov for the most up-to-date information. Here’s what people should know about the Economic Impact Payments: The IRS will automatically deposit Economic Impact Payments into the bank account taxpayers provided on their 2019 or 2018 tax return for a direct deposit of their tax refund. Those without a direct deposit account on file may be able to provide their banking information online through a new secure tool, Get My Payment. Anyone who is eligible for an Economic Impact Payment and doesn’t provide direct deposit information will receive a payment mailed to the last address the IRS has on file. The IRS does not charge a fee to issue the payment. Beware! Scammers may: Ask an individual to sign over their Economic Impact Payment check to them. Ask for verification of personal or banking information. Suggest that they can get someone tax refund or Economic Impact Payment faster by working on their behalf. Issue a bogus check, often in an odd amount, then tell a person to call a number or verify information online in order to cash it. Source: irs.gov #taxtips

State of California - Franchise Tax Board Updates COVID-19 Economic impact Payments Are the payments that individuals receive from the federal government (i.e., $1,200 [$2,400 for individuals filing a joint return] and $500 per qualifying child) under the recently enacted federal CARES Act subject to California income tax?... - No, these payments are not subject to California income tax. Is the emergency increase in unemployment compensation benefits (in the amount of $600 per week) that individuals receive under the recently enacted federal CARES Act subject to California income tax? - No, these payments are not subject to California income tax. Does California conform to the federal early withdrawal penalty waivers for distributions from qualified retirement accounts under the recently enacted federal CARES Act? - Yes, the federal early withdrawal penalty waivers for distributions from qualified retirement accounts under the federal CARES Act also applies for California income tax purposes. #TaxTips #COVID19 #FTB

IRS Coronavirus Stimulus Check: What You Need to Know Distribution of economic impact payments (up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child) will begin in the next two weeks and will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment. Who is eligible for the economic...Continue reading

Updated Tax Deadline Notice 3/21/2020: ______________________________________________ Tax Day now July 15: IRS and FTB of California extended filing deadline and tax payments regardless of amount owed to July 15.... The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020. Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension. Franchise Tax Board of California is also postponing until July 15 the filing and payment deadlines for all individuals and business entities for: 2019 tax returns 2019 tax return payments 2020 1st and 2nd quarter estimate payments 2020 LLC taxes and fees 2020 Non-wage withholding payments Sources: irs.gov; ftb.ca.gov

IRS Payment Deadline Extended to July 15, 2020 ____________________________________ The Treasury Department and the IRS are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak. The filing deadline for tax returns ~~REMAINS~~ April 15, 2020. The IRS urges taxpayers who are owed a refund to file as quickly as possible. For those who can’t file by the April 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is e...ligible to request a six-month extension to file their return. This payment relief includes: Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief. Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due. This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020. Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15. Source: irs.gov

Treasury Secretary Steven Mnuchin said Tuesday that taxpayers can delay paying their income taxes on as much as $1 million in taxes owed for up to 90 days. Corporate filers would get the same length of time to pay amounts due on up to $10 million in taxes owed, Mnuchin said. During that three-month deferral period, taxpayers won’t be subject to interest and penalties, he said.... State of California is also granting a 60-day delay for affected individuals and businesses unable to file on time. #tax

Gathering Records Before Preparing Tax Return Makes Filing Go Smoother As taxpayers are getting ready to file their taxes, one of the first things they’ll do is gather their records. To avoid refund delays, taxpayers should gather all year-end income documents before filing a 2019 tax return. It’s important for taxpayers to have all the needed documents on hand before starting to prepare their return. Doing so helps them file a complete and accurate tax return. Here are some ...things taxpayers need to have before they begin doing their taxes. Social Security numbers of everyone listed on the tax return. Many taxpayers have these number memorized. Still, it’s a good idea to have them on hand to double check that the number on the tax return is correct. An SSN with one number wrong or two numbers switched will cause processing delays. Bank account and routing numbers. People will need these for direct deposit refunds. Direct deposit is the fastest way for taxpayers to get their money and avoids a check getting lost, stolen or returned to IRS as undeliverable. Forms W-2 from employers. Forms 1099 from banks and other payers. Any documents that show income, including income from virtual currency transactions. Taxpayers should keep records showing receipts, sales, exchanges or deposits of virtual currency and the fair market value of the virtual currency. Forms 1095-A, Health Insurance Marketplace Statement. Taxpayers will need this form to reconcile advance payments or claim the premium tax credit. The taxpayer’s adjusted gross income from their last year’s tax return. People using a software product for the first time will need their 2018 AGI to sign their tax return. Those using the same tax software they used last year won’t need to enter their prior year information to electronically sign their 2019 tax return. Forms usually start arriving by mail or are available online from employers and financial institutions in January. Taxpayers should review them carefully. If any information shown on the forms is inaccurate, the taxpayer should contact the payer ASAP for a correction. #IRSTaxTip