The Accountancy

A busy schedule can keep you from getting to the gym and, as a result, can cause your physical fitness to decline. That's why many people are turning to at-home fitness programs that are simple to follow and don't require a lot of time or equipment. Depending on the results you're looking for and the time you have to dedicate to a fitness program, you have several options from which to choose. The following home fitness programs will inspire you to get started. 1. Jillian Mic...Continue reading

The IRS has granted relief for 125 cafeteria plans, health flexible spending arrangements and dependent care assistance programs. In Notice 2020-29, the IRS has: (https://www.irs.gov/pub/irs-drop/n-20-29.pdf) Extended claims periods for taxpayers to apply unused amounts remaining in a health FSA or dependent care assistance program for expenses incurred through December 31, 2020.... Expanded the ability of taxpayers to make mid-year elections for health coverage, health FSAs, and dependent care assistance programs, allowing them to respond to changes in needs as a result of the COVID-19 pandemic. Applied earlier relief for high deductible health plans to cover expenses related to COVID-19, and a temporary exemption for telehealth services retroactive to January 1, 2020. Notice 2020-33 (https://www.irs.gov/pub/irs-drop/n-20-33.pdf) increases the limit for unused health FSA carryover amounts from $500 to a maximum of $550, as adjusted annually for inflation. The drawbacks? The rules are very specific, and the notices go into great detail on how exactly the new rules work. Fortunately, Notice 2020-29 contains examples so those who have elected the relevant plans can see more clearly how to take advantage of the new rules. A summary of the rules is available in the IRS Newsroom. (https://www.irs.gov//irs-provides-tax-relief-through-incre) for more articles: https://theaccountancy.com/resources/blog/

Like most new government programs, the PPP has been followed by a stream of clarifying guidance from the relevant federal agencies. Whether you have such loans already or are seeking to get them, you should be aware of the details. Tax Responsibilities The IRS has clarified that no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan pursuant to the CARES Act. Al...so, the income associated with the loan forgiveness is excluded from gross income for purposes of the IRC. Further details are available in IRS Notice 2020-32. https://www.irs.gov/pub/irs-drop/n-20-32.pdf Disbursement Rules The SBA has issued guidance that answers questions about the PPP loans. A key question for businesses is whether a borrower can take multiple draws from a PPP loan and thereby delay the start of the eight-week covered period. No, says the SBA. The lender must make a one-time full disbursement of the PPP loan within 10 calendar days of loan approval. For the purposes of this rule, a loan is considered approved when the loan is assigned a loan number by the SBA. Further details are available in Docket Number SBA-2020-0022. https://home.treasury.gov//Interim-Final-Rule-on-Disbursem Corporate Group Loans The SBA addresses an issue much covered in the press: Can a single corporate group receive unlimited PPP loans? The answer is no. Notes the SBA: "To preserve the limited resources available to the PPP program, and in light of the previous lapse of PPP appropriations and the high demand for PPP loans, businesses that are part of a single corporate group shall in no event receive more than $20 million of PPP loans in the aggregate. For purposes of this limit, businesses are part of a single corporate group if they are majority owned, directly or indirectly, by a common parent." Further details are available in Docket Number SBA-2020-0023. https://home.treasury.gov//IFR--Corporate-Groups-and-Non-B Businesses should note that guidance is subject to change, and for the latest information, they should stay in touch with financial professionals.

The Coronavirus Aid, Relief and Economic Security Act contains a break for borrowers seeking student loan repayment delays. The upshot is that it's expected to take a bit of time for the benefits to be reflected in borrowers' accounts, but there are indications that relief will be applied retroactively, meaning the delay won't seriously disadvantage anyone. There's a lot of information that is still unclear regarding the program, and it is expected there will be more guidance... in the near future. According to the nonprofit Student Loan Borrower Assistance, payments will be suspended from March 13, 2020, through Sept. 30, 2020. Loan servicers will cease automatic payments during this period. No additional interest will accrue as a result, although some confusion about how interest will be calculated in the future remains. Also, there are a lot of limitations. Not every loan classified as a student loan is eligible. The act generally addresses only Direct Loans and Federal Family Education Loans currently owned by the U.S. Department of Education. Neither Perkins Loans nor commercially held FFELs are covered by the act. Private student loans are off the table as well, according to the SLBA, which says about 9 million federal student loan borrowers have at least one loan not covered under this program. A key provision also addresses credit reporting: If you do have a loan suspended under the program, it will not be reported as a default, but as a regularly scheduled payment. This is good news for students worried that this program would lead to a black mark on a future credit report. More information is available on the SLBA site and the Education Department site. https://studentaid.gov/announcements-events/coronavirus https://www.studentloanborrowerassistance.org/what-the-car/

The Employee Retention Credit has been designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by the coronavirus and quarantine. Who's eligible? All employers regardless of sizeincluding tax-exempt organizationsbut not state and local governments and their instrumentalities or small businesses that take small business loans. Qual...ifying employers fall into one of two categories: The employer's business is fully or partially suspended by government order due to COVID-19 during the calendar quarter. The employer's gross receipts are below 50% of the comparable quarter in 2019. Should your gross receipts rise above 80% of a comparable quarter in 2019, you no longer qualify after that quarter. Wages paid after March 12, 2020, and before January 1, 2021, are eligible for the credit. Wages taken into account aren't limited to cash payments they include a portion of the cost of employer-provided health care. Qualifying wages are based on the average number of a business's employees in 2019. Employers with fewer than 100 employees on average in 2019 base the credit on wages paid to all employees, regardless of whether they worked or not. If the employees worked full time and were paid for full-time work, the employer still receives the credit. For employers with more than 100 employees on average in 2019, the credit is allowed only for wages paid to employees who didn't work during the calendar quarter. How do you receive your credit if you think you're an eligible employer? You can be immediately reimbursed for the credit by reducing required deposits of payroll taxes that have been withheld from employees' wages by the amount of the credit. Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on quarterly employment tax returns or Form 941, beginning with the second quarter. If your employment tax deposits aren't sufficient to cover the credit, you may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19. You can request an advance of the Employee Retention Credit by submitting Form 7200. The Families First Coronavirus Relief Act (FFCRA) requires certain employers to pay sick or family leave wages to employees who are unable to work or telework due to certain circumstances related to COVID-19. Employers are entitled to a refundable tax credit for the required leave paid, up to specified limits. The same wages cannot be counted for both credits. Also, businesses may not receive the Employee Retention Credit if they also receive a Small Business Interruption Loan under the Paycheck Protection Program.

Dear Friends and Clients, We've received a lot of recent inquiries from many of you wanting to verify that deadlines to file and pay your federal and state taxes have been extended. We realize it is a little nerve-wracking to pay later than normal after having that April deadline ingrained in all of us for so long! We would like to confirm that you CAN pay now if you would like, but you DO NOT HAVE to pay until July 15th which is the new filing deadline. This includes both yo...ur 2019 taxes if you owed the government, as well as estimated payments for 1st quarter 2020 if you owe them. The latest statement from the IRS confirming this can be found here. https://www.irs.gov//irs-extends-more-tax-deadlines-to-cov Though the deadline has been extended, we do recommend that you file your return as soon as possible. For those that owe, this will allow you to determine how much you owe and plan accordingly. You are not required to pay the IRS or state taxing authorities when your return is e-filed, you still have until the July 15th deadline to pay. For those who are due a refund, you will get your money that much sooner. Additionally, as more information becomes available in relation to economic relief provided by the government, we're endeavoring to keep you informed every step of the way. A few recent clarifications to the CARES Act are covered below regarding IRA contributions and PPP Loans for the self-employed: Does the IRS relief provide me more time to contribute money to my IRA for 2019? Yes. Contributions can be made to your IRA, for a particular year, at any time during the year or by the due date for filing your return for that year. Because the due date for filing Federal income tax returns has been postponed to July 15, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020. For more details on IRA contributions, see Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs). https://www.irs.gov/publications/p590a Do self-employed people qualify for the PPP Loan? Yes. As of last Friday, April 10, 2020, self-employed individuals may apply for the SBA Paycheck Protection Program. For businesses without employees, you simply take the net self-employment earnings from Schedule C line 31, and/or Schedule 1 line 8, divide by 12 months to get your average monthly payroll cost. Then multiply by 2.5. What about self-employed deductions such as home office expense, self-employment tax deduction, self-employed retirement and health care deductions? How are those factored into the PPP calculation? They are not factored into the PPP calculation. What if you have multiple Schedule C businesses? If you have multiple Schedule C businesses, you can include the net self-employment earnings from each entity in the PPP calculation on one loan application. Please contact us if you have any questions. Best regards, The Accountancy

Dear Friends and Clients, We pray you and yours are safe and well. This post contains a link to a statement from Keith Knox, LA County Tax Collector which explains why they cannot extend the April 10 deadline to pay your property taxes. However, if you cannot pay by then, beginning on April 11, you may submit a request for penalty cancellation online. They have set up a special team to process these requests but please note you must demonstrate that you have been adversely im...pacted by the COVID-19 virus. https://ttc.lacounty.gov/ The link above also contains a video that shows you how to pay via E-Check. Please contact us if you have any questions. Best regards, The Accountancy

Dear Friends and Clients, We don’t need to recite the news. You all know by now the Coronavirus has impacted our lives in many ways. Whatever disruption it has caused in our daily lives, we certainly hope you and your loved ones are safe and well. This letter is long but has vital information for you to know about new legislation, IRS relief, property taxes, and how to make your tax filing interaction with our staff smoother. We urge you to try and read through the entirety ...Continue reading

IRS Clarifies Deductible Expenses The IRS is offering some updated rules as guidance for deductible expenses that may have been murky as a result of the Tax Cuts and Jobs Act. The rules being updated involve using optional standard mileage rates when figuring the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes, among other issues.... The full details are available in Revenue Procedure 2019-46 and Revenue Procedure 2019-48. There are more succinct rules to substantiate the amount of an employee's ordinary and necessary travel expenses reimbursed by an employer using the optional standard mileage rates. But know that you're not required to use this method and that you may substantiate your actual allowable expenses, provided you maintain adequate records. The TCJA suspended the miscellaneous itemized deduction for most employees with unreimbursed business expenses, including the costs of operating an automobile for business purposes. However, self-employed individuals and certain employees, armed forces reservists, qualifying state or local government officials, educators, and performing artists may continue to deduct unreimbursed business expenses during the suspension. The TCJA also suspended the deduction for moving expenses. However, this suspension doesn't apply to a member of the armed forces on active duty who moves pursuant to a military order and incident to a permanent change of station. The IRS has also made it clear that the TCJA amended prior rules to disallow a deduction for expenses for entertainment, amusement or recreation paid for or incurred after Dec. 31, 2017. Otherwise allowable meal expenses remain deductible if the food and beverages are purchased separately from the entertainment, or if the cost of the food and beverages is stated separately from the cost of the entertainment.

The SECURE Act and Other Last-Minute Tax Changes Despite all the gridlock in Washington, as well as an impeachment, the SECURE Act has passed. It changes a number of important retirement plan rules. The act runs over 120 pages, so the experts will be poring over it for some time. Meanwhile, a number of sources have weighed in on what they think are the key provisions. (Note that last-minute alterations and more detailed analysis may lead to additional changes in the coming w...Continue reading

Agile Advice in Uncertain Times We continually work hard to improve how we serve you. This uncompromising mindset is displayed every day in our team’s attitudes as we strive to build a better firm that serves the diverse needs of all our clients. Our firm seeks new and better ways to deliver world class service.... We will always maintain and enhance our professional expertise and capabilities. You can continue to rely on this value commitment. In recent years, we have strengthened our teams with exceptional talent, both technical and administrative. But now, we are also focused on how we communicate with you. We use the term marketing sparingly as it has been overused and confused for many different things. For us, quite simply, marketing means everything we do and everything we say. Our latest innovation is this newsletter. We hope you enjoy it, and find it meaningful with brief and relevant capsules of actionable ideas and advice. We welcome your feedback as we curate future editions. On behalf of all of us at The Accountancy, we thank you for being a steadfast advocate of our Firm. We could not exist, and much less thrive, without you. Please, keep telling your friends and family. We want to work with folks just like you! Sincerely, The Accountancy Team

What To Know About Getting a Tax Refund In a recent statement, the IRS noted that most taxpayers are issued refunds by the IRS in fewer than 21 days. If yours takes a bit longer, here are six things that may be affecting the timing of your refund:... Security reviewsThe IRS and its partners continue to strengthen security reviews to help protect against identity theft and refund fraud. Your tax return may be receiving additional review, which makes processing your refund take a bit longer. ErrorsIt can take longer for the IRS to process a tax return that has errors. Fortunately, electronic filing has reduced the number of errors, which are more common in paper returns. Incomplete returnsHere again, electronic returns make the most sense. It takes longer to process an incomplete return. The IRS contacts a taxpayer by mail when more info is needed to process the return. Earned income tax credit or additional child tax creditIf you claim the earned income tax credit (EITC) or additional child tax credit (ACTC) before mid-February, the IRS cannot issue refunds as quickly as others. The law requires the IRS to hold the entire refund. This includes the portion of the refund not associated with EITC or ACTC. Your bank or other financial institutions may not post your refund immediatelyIt can take time for banks or other financial institutions to post a refund to a taxpayer's account. Refund checks by mailIt can take even longer for a taxpayer to receive a refund check by mail. Direct deposit is a better bet. In an unusually poetic statement, the IRS explains that "tax returns, like snowflakes and thumbprints, are unique and individual. So too, is each taxpayer's refund." So keep this in mind. Fortunately, you can track your refund status online by entering your Social Security number and other key information. IRS Refunds information. For FTB refund info click here.