Pronto Income Tax

Taxpayers who filed returns through H&R Block and TurboTax in recent years are experiencing a delay in receiving their second round of stimulus checks. The issue is for those who had their tax prep fee deducted from their refund, causing stimulus payments to be sent to temporary accounts set up for that purpose. "The IRS says that the financial institutions that received the funds will return them to the IRS, and then the IRS will reissue payments to the right accounts. This will cause delays in people receiving their payments." Maybe ... next time ... try a different solution?

We're digging into the new Covid Relief Bill this week and breaking it down into simple info you can digest. (Because: 5,500 pages?!) Apart from the $600 stimulus checks coming, here is more good news for those receiving unemployment: They tacked on an additional $300 per week for all workers receiving unemployment benefits, from Dec. 26, 2020 to March 14, 2021. The bill also extended the "PUA", a temporary federal program covering self-employed and gig workers, to March 14 (...after which no new applicants) through April 5, 2021. The bill also provides an extra benefit of $100 per week for certain workers who have both wage and self-employment income but whose base UI benefit calculation doesn’t take their self-employment into account.

A new round of stimulus checks are in the mail, and you should receive it by January 15th.

Thanks for your friendship, and for your business in 2020, and (hopefully) in 2021. Happy New Year to all of you!

Good news for struggling restaurants and business owners: The new stimulus bill included the restoration of the 100 percent business meals deduction for two years (it was 50 percent). Restaurants have been forced to close their doors to in-house dining in some states and limit capacity in others, and over 100,000 restaurants have closed permanently as a result so far.

The new 5,500+ page Covid Relief Bill is massive, and it will take many weeks to digest everything included in the legislation. Here's what we know about business relief and PPP funds: There is now streamlined forgiveness for PPP loans under $150K. This is a significant development for many so check with your lender about how they want that now to be handled.... There is also now an additional $284B in PPP funding for impacted businesses to access. More on this in days to come...

Regardless of what happens this week, we must all somehow move forward together and now is when the real work begins. While the nation's eyes are fixated on political things, we're spending our days working hard on behalf of our clients, talking through tax-advantaged financial moves, entity formations, retirement options, and more. Because both Republicans and Democrats deserve amazing tax and accounting service. Simply put, we're here for you, no matter what's happening.

Use your FSA funds before year-end. Money set aside in a flexible spending account must be spent by the end of the year, else the funds are lost. But some employers allow a two-and-a-half month grace period, so check with your employer to see what your personal deadline is for utilizing your FSA savings.... (You can spend FSA funds to pay health deductibles and copayments, but not insurance premiums. You can spend FSA funds on prescription medications, medical equipment and supplies, and other permitted medical and dental expenses. Here's a list of what's allowed: https://bit.ly/3rE37Qk )

"The future of this republic is in the hands of the American voter." - Dwight D. Eisenhower This is true everyday, but especially important on this day in 2020. No matter what divides us and no matter who wins today, we are all American.

Trump signed the second stimulus bill over the weekend. While he is still advocating for changes to the bill -- more changes might be coming -- Americans will be receiving a second round of stimulus checks, continued unemployment benefits, rental assistance, and more PPP funds. The bill also includes additional earmarked funds for education, vaccine distribution, and child care.

The standard deduction is increasing in 2021, and new tax brackets and tax rates have been released. "Note: These rates remain in place no matter what happens in November 2020. For these rates to change, Congress would have to vote to change the tax rates."

Taxpayers collectively spend six billion hours annually -- or 8,758 lifetimes -- trying to comply with the tax code. Fortunately, YOU don't have to be the one doing all the heavy lifting. We are on your side.

Here's a feel-good story about the "secret" to finding wealth... A rich farmer liked to ride around his vast estate so he could enjoy his great wealth. One day, while riding his favorite horse, he saw Hans, an old tenant farmer, sitting under a tree. Annoyed because Hans wasn't hard at work, he halted his horse and asked, "What are you doing there?" Hans replied, "I was just taking a minute to be thankful for my meal." And the farmer saw Hans eating a modest lunch of rice and... beans. "If that was my lunch, I wouldn't be giving thanks for it," the farmer said. "It's all I have," said Hans, "but it's all I need, so I give thanks." The farmer was about to ride on when Hans called out to him. "I thought I should tell you that I had a dream this morning. A voice said to me, 'The richest man in the valley will die tonight.' I just thought you should know." The farmer rode away, but Hans' words worried him. He was the richest man in the valley, wasn't he? So he called his doctor when he got back to his mansion. The doctor came out and looked him over, but found nothing wrong with him. The farmer went to bed, still worried, and slept fitfully. When he woke the next morning he thought, "Well, there was nothing to that dream after all. Here I am, alive and well." Then a servant knocked at his door. "What is it?" the farmer asked. "It's about that old tenant farmer, Hans, sir," the servant said. "What about it?" "He died in his sleep last night, sir."

Save ALL of your tax returns. After you file, save the paper and/or electronic copies with the rest of that year's financial documents for at least 7 years. If the IRS suspects you underreported your gross income by 25% or more, they have up to six years to challenge your return. And because we can all file for an extension at the October 15 deadline, you must keep your records for at least seven years. Regardless of those rules, though, if the IRS suspects you filed a fraudulent return, no statute of limitations applies. Because the IRS is run and organized by fallible people (with all of their attendant biases, emotions, etc.), we suggest keeping your tax returns and documents forever.

The greatest gift we can give this season is love. Let our hearts be open not to just those who are close to us, but to all humanity. Let us be slow to judge and quick to forgive, and show patience and empathy. Happy Holiday from our homes to yours.

Good news? "The US economy added 1.37 million jobs in August ... the fourth consecutive month of job growth. Additionally, the US unemployment rate in August fell to 8.4%. This mark was down from 10.2% in July and better than April's historically high 14.7% unemployment rate that happened to be the highest on record since the Great Depression. Still, the number of permanent job losses increased by 534,000 to 3.4 million, inspiring more Americans to pursue their own start-up ventures."

Now that Tax Year 2019 is fully in the rearview mirror, we only have a couple months left to make changes that will affect TY2020. If you are interested in exploring different options for getting ahead of any tax issues before they bite you ... get in touch with us right away. Times a'wasting.

The new stimulus bill passed. For businesses, there will be forgiveness for all PPP loans below $150k, and deductibility of PPP expenses. So after the new year when the SBA has time to build the new forms, people can apply for forgiveness whenever they want now. Plus new PPP and tax credits, which are all gated on proving revenue loss. Anyone whose business is down more than 25% from the prior year could be eligible for some more financial aid.... Here is a link to the full bill, if you want to review the 5,600 pages (the longest in history)... https://rules.house.gov//f/BILLS-116HR133SA-RCP-116-68.pdf

Congress has officially passed a new stimulus bill. The legislation includes a new round of stimulus checks to individuals and families, an extension of unemployment insurance, funding for more business loans, vaccine funding, renter support, and education funds.

The IRS has apparently caught up on processing their backlogged mail that stacked up during COVID closures. Or, good enough, they say. They are now resuming the mailings of tax-due notices to taxpayers with outstanding tax bills. If you receive one of these notices, give us a call immediately.

Congress finally agreed on another stimulus deal over the weekend, and an official vote is forthcoming. This legislation does include more stimulus checks to individuals and families: $600 for adults and $600 per child.

Keeping personal and business separate is extremely important for your taxes. While there is some room for dual purpose expenses, far-reaching claims are easy pickings for IRS auditors.

It's been one difficult year for small business owners. Here are a few ways to help reduce your tax burden. (We can help with this.)

How long should you be keeping your records? Even in the days of cloud-document storage, it's important to have hard copies lying around -- in a safe place, of course. If you don't have a full safe, these are the sort of documents for which you may want to invest in a fire safe, at least.

"Hope someone can use some of these baseballs in the batting cages. I found them cleaning my garage. I pitched them to my son and grandson for countless rounds. My son is now 46 y/o and my grandson is 23 y/o. I am 72 and what I won't give to pitch a couple of buckets to them. They have both moved away. If you are a father cherish these times. You won't believe how quickly they will be gone. God bless P.S. Give them a hug and tell them you love them every chance you get."

Those who reach their financial goals usually carry a willingness to live beneath their means for as long as it takes. While their peers are showing a tendency toward embracing the good life at the first sign of prosperity, the would-be wealthy take a pass on all of that. A drive to save large amounts of money causes frugal spending habits, which then enable the ability to make purchases without using debt. It's a domino effect.

A new QR code feature aims to help you access your taxpayer account info easier when receiving an overdue tax notice from the IRS. If you just need help setting up logistics to pay your bill, this will help you. But if you do not agree with their numbers or you can't pay, you will still want professional assistance.

Do you get a knot in your gut when your spouse asks you how the finances are looking? Do you practice a financial policy of "Don't ask, Don't tell"? One of the best tools we've seen to keep your spouse or business partner in the loop about your finances is the simple concept of the monthly financial report. Here are some of the major benefits...

There's lots of tax talk in this election season, as in every other, as both candidates are making promises about their tax policies. The BEST advice we can give about what to do for your individual and business tax plan right now is: wait and see. If new tax legislation is passed in 2021, it probably won't be effective until 2022. Congress very rarely makes tax changes that are retroactive. So ... wait and see. Then, we will listen together to see what whichever President we have says about their tax plans ... and react accordingly.

Organizing your financial world can feel like a daunting task, but some SIMPLE steps will go a long way. Watch our video -- doesn't this seem really doable?

There are some significant actions you can take NOW to positively affect your 2020 tax filing next year. (Read: to keep more money in your pocket.) 1) Look ahead to 2021 -- project what your income might be, then make withholding and tax moves accordingly. 2) Adjust your withholding -- you still have 1-2 paychecks to catch up on any overpayments or underpayments for this year.... 3) Spend down your FSA (if you have one) -- don't let these funds go to waste. 4) Give to charity -- even if you take the standard deduction, you can ALSO deduct up to $300 in cash giving. DO IT. 5) If you can, give tax-free gifts to family -- if you have means, this is the simplest way to avoid estate taxes. You can give up to $15K tax free. 6) Max out workplace retirement accounts -- if you still get this sort of perk, you only have a couple more weeks to maximize it. 7) Gather your virtual currency docs if you have them. The IRS is scrutinizing these starting NOW.

We're looking for some good news today. Post a link to a feel-good article or post in the comments, and let's all dwell on some positivity together.

If you have ANY cryptocurrency transactions in your history, you must make sure that they are properly reported. Just because it's encrypted ... doesn't mean that it's not taxable.

To answer the questions we often get around here from clients facing tough times, this video summarizes a step-by-step process which we often help people work through.

If your business took a PPP loan, there isn't any tax benefit to be gained by delaying the forgiveness process. So ... it's a good idea to start on that. We're here to help.

Here's what happens when you allow bot software to do things that only humans should. This movie script was the result when a man asked a bot to watch over 1,000 hours of Hallmark Christmas movies and then write a Christmas movie script of its own. So ... do you really want software to determine how well you are doing with your taxes? Didn't think so.

Don't look for further widespread penalty relief when it comes to your IRS debt. There are, however, certain relief requests that can be submitted and that will be handled on a case-by-case basis.

The problem with "Googling for financial advice" is that you'll often get the blandest or reheated leftovers for advice. The "content farm" websites out there churn out the same old information, and it's simply not applicable in every situation. That's why it's always helpful to have someone who can speak into your specific situation. (Which, ahem, is what we're here for.)

The IRS recently ruled definitively that expenses paid for with PPP proceeds are NOT deductible. This has been an open question, and it is STILL a bit of an open question ... but what they clarified is that the timing of the forgiveness won't affect the tax treatment of these expenses. Essentially, if a business "reasonably believes that a PPP loan will be forgiven in the future", expenses related to the loan aren’t deductible whether or not the business has filed for forgiv...eness. But also -- if a business does NOT apply for forgiveness, or is denied, those expenses will be deductible. It's worth a conversation with us for planning purposes if you need guidance.

With the increased standard deduction this past year, some smaller charities began to see a decrease in donations. This year might be worse. Which means that you if you HAVE the "means", this is a great year to consider giving. In a tax-advantaged way, of course.... And since it's Giving Tuesday, it's a great day to go ahead and head over to your favorite charity and make it happen.

A financial tip on this Cyber Monday: Don't spend money you don't have. Which is especially tempting when shopping online, with a credit card, during "the best prices of the year". Stick to a budget, and resist the drama that retail marketers create.

This is a year in which your local, small businesses need your support more than ever. So let's get out there and shop small tomorrow. We certainly will!

This is a year in which we might not feel so ... ready ... to take a day to focus on being thankful. But let's try. We'll start: We are thankful for a profession that enabled our office to provide REAL help and REAL guidance during a time of REAL need in our nation. We feel like we made a difference in the lives of our clients and friends this year, helping to be a light of direction and guidance in uncharted territory.... While we grieve over the economic realities facing us all, we are thankful for an opportunity to make a real difference in the midst of it. Now ... how about you?

"Tomorrow is often the busiest day of the week." -Spanish Proverb We've heard clients say "next year" countless times when we bring up the subject of tax planning. Make this year the year that you look proactively at your taxes -- both personal and business -- and let us help improve the bottom line for you. There's still time.

What are the most important tasks in your business? Taking care of customers and growing revenue. Add any trendy business philosophy you want on top of that, and it still gets down to the same thing. EVERYONE on your business team should either be adding revenue or helping to control expenses. We suggest you (constantly) ask your staff -- and yourself -- what they can do to help.

Entrepreneurism and small businesses are powerful forces in this country.

Write your representatives to let them know what you think about this proposed new tax on remote workers.

As you plan for your giving budget in this holiday season, remember that THIS YEAR ONLY (per the CARES Act), you can take the standard deduction, as well as up to $300 of cash donations. It has to be cash though, and it's up to $300 per return, so if you file jointly, it's still only $300. (Since most people use the new higher standard deduction, charitable giving is not deductible. But this year, you can claim up to $300 on top of that standard deduction.)

As that old "going on a bear hunt" ditty says: Can't go over, can't go under it ... gotta go through it. That is 2020, for most of us. If numbness is setting in, unplug a little. Stay off social media. Only read important content (like THIS, naturally). ... Focus on your domain and build the financial and relationship fortress you need to carry you through whatever might come.

Now is a very good time to get your ducks in a row before year-end on any looming cashflow issues you or your business might be facing ... because the IRS is energized to audit and examine every possible source of federal revenue that they can manage to find. YOU, by the way, are the primary source of their revenue ... and they will definitely be watching for ways to get in your wallet. WE are here to help you keep as much in your wallet as legally possible.

If you're looking at college costs for next year, here are a few handy tips to help you collect the tax info you'll need to apply for financial aid.

There is a new category of tax returns that the IRS will be heavily scrutinizing: cryptocurrency. The IRS has made an important change to 2020 tax forms to identify this type of financial exchange. In 2019, the virtual currency question was only found on Schedule 1: Additional Income and Adjustments to Income, which meant that regular W-2 filers with no other business or rental income or income adjustments would not have to answer this question.... But ... in 2020, the IRS has moved the question to the front of the Form 1040. That means everyone will need to answer this question: "At any time during 2020, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?" The IRS is getting smart about the ways that people are avoiding them. So: answer that question properly, or you could be found guilty of perjury.

Do you need to adjust your withholding before year-end? By now, you should be able to look at what your income will most likely be, and you can keep more of it in your pocket instead of "loaning" it to Uncle Sam via withholding, and getting it back via refund. Conversely, you can make sure you don't get slapped by a bill. (Remember, unemployment compensation is usually taxable.)

If you have a veteran in your family, feel free to pass along this handy list of freebies available today and throughout the month. It's a (very) small way to say thank you. Thank you for your service, Veterans!

Your financial situation is likely to be impacted MOST by one simple factor: whether you make decisions with the future in mind ... or not. The year 2020 will come to an end (thank goodness). And with it will end any opportunity you might have to make tax-related changes to your financial situation. Most tax planning strategies (for you and/or your business) completely dry up after 12/31, so take a look at these and let's talk if you think you could use some help...

Beware of stimulus-related texts that look like this (but are phishing scams): "You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account. Continue here to accept this payment."

Starting this Veteran’s Day on November 11, the Department of the Interior has made it possible for anyone who’s worked in the US Armed Forces, including the National Guard and Reserves, to visit national parks for free. The department currently waives fees for active-duty military service members, so now former military will also have lifetime free access.

The work of a business owner is about planning, focus and execution (and later ... harvesting) vs. chasing the fad of the week, getting distracted and wasting time -- time you can't ever get back. How many times did you look at social media today to gawk at political train wrecks? How much of your headspace is currently taken up with "pressing" client/staff questions? How many rabbits can you chase at one time? Now, more than ever: Plan, focus, execute and harvest.

Well, with yesterday's extended tax deadline behind us, one crazy and wild and completely unprecedented tax season comes to a close. Thank you for entrusting us with something as close to you as your finances -- we know how important each dollar is to each of you, and we're committed to helping you keep as many of them as you legally can. (And now, it's time for a very long nap this weekend, before we gear up for next year.)

The day has come. All 2019 returns that were given an extension to file are due to be submitted today, which means our most recent marathon is coming to an end. Next tax season is now not so very far away (along with the tax ramifications of what THIS tax season delivered). Are you ready for that? You will be ... with our help.

We've been telling you about some tax professional rumors circulating about "automatic forgiveness" for PPP loans under $150K. Well, they did it! Except it is for even smaller loans (under $50K). And it's not "automatic", but it is very, very easy. Here is the simplified application if your loan falls in that category. https://bit.ly/318OOYh

Here are some questions to consider for your 2020 taxes that will set you up for long-term success. We're here to help you walk through these answers and how to affect your tax status in a positive way. 1) Have you had a significant change in your wage income this year? 2) Have you taken capital gains or losses this year? Are you planning to? 3) Did you start or sell a business this year?... 4) Did you purchase real estate? 5) Did you make your full contributions to retirement accounts? 6) Have you considered a Roth IRA? 7) Did you withdraw from retirement accounts, and for what purpose? See more

Extension deadline is on THURSDAY, folks. Filing a tax return late (without reasonable cause) results in a 5% late FILING penalty (on whatever it is that you owe -- and the IRS will figure it for you if you don't), and an additional 5% for every month you wait to file. PLUS there is an additional 0.5% to 1% late PAYMENT penalty (per month) on whatever it is you owe. NOTE: this is ON TOP of late filing penalties. Then (yikes), interest accrues on both the late tax filing penal...ties AND the late payment penalties. That's a lot of penalty. And at least the first one is completely avoidable. If you can't pay the tax due on October 15, still file ... and talk to us about helping you set up an installment agreement or working out an offer in compromise to cover what you owe.

Another PPP loan update for businesses: If your PPP loan was less than $50K, a couple of time-consuming requirements have been removed from the forgiveness application, making the process *a little bit* less complicated. Automatic forgiveness for certain loans, while still being discussed, is not yet available.

If you filed an extension on your 2019 taxes (like many Americans), your extended deadline is a week away (on Oct. 15).

There is a difference between income and wealth. Tax returns aren't about wealth -- they're about "income", and how that is defined. Business owners have access to powerful tax advantages that wage earners do not. This is true for smart business owners the world over.... This is why we do what we do ... to increase those advantages on YOUR behalf. We've got you covered on the taxation front.

The IRS just pushed back a deadline for non-filers who have yet to receive their stimulus check. The new deadline for non-filers to supply the IRS with their information is Nov. 21.

There are two tax codes in this country: 1) One code is for those who don't get someone to help them use it, and 2) The other code is for those who take every available legal deduction.... Our job is to help make the tax code work for YOU.