The LM Company, Inc. Tax and Accounting Services

The deadline to obtain a PPP loan is June 30. If you have not applied for it, you must do it now to ensure that you can obtain funds for your business. For business owners with employees, you can use 2019 payroll or 2 months of 2020 payroll records to apply. Loan is 2.5 times one month of payroll records. For sole proprietors the net on Schedule C is divided by 12 months to get a one month average and multiplied by 2.5 to get the loan amount.... For payroll loans, 60% of funds can now be used towards payroll instead of 75% and you have up to 24 weeks to use the funds instead of the original 8 weeks. If you need help applying for the PPP loan, feel free to message me.

For those that obtained a PPP loan since April, there have been modifications on the length of time and the percentage of its use:

The Small Business Administration is now processing applications for the PPP loan which helps business cover payroll expenses. Sole proprietors can now apply. The loan will be based on net income from self-employment. It is highly encouraged to apply through community banks and credit unions as they'll most likely help you process the loan than the large banks. Those that applied in the first phase but did not get a response, should get a response soon. Check with the bank wh...ere you applied to get a status. At this time funds for the EIDL loan are not available. I'll keep you posted if anything changes.

**Updates - Coronavirus Effect On Tax Season** I have partially updated the website to add content regarding the recent changes of the CARES Act such as the stimulus payments and individual tax changes. The business links are still being worked so I'll post a new message when the business content will be ready.... Go to: www.thelmctax.com for all the details

***NEW FLASH: Coronavirus Effect On Tax Season*** Today Treasury Secretary Steve Mnuchin has stated that the filing deadline has also been extended until July 15. Therefore all individuals and businesses whose tax deadline was on April 15 will have until July 15 to file and pay tax liabilities for 2019.... I will keep you posted on any new changes. There is rumor that part of the financial stimulus to aid taxpayers during the coronavirus crisis, the 10% early withdrawal penalty on IRA withdrawal up to $100,000 will be waived if it is related to coronavirus purposes. Not much is known yet so stay tuned...

***NEWS FLASH: Coronavirus Effect On Tax season*** As you may have heard earlier in the news, Treasury Secretary Steve Mnuchin stated that individuals can defer paying taxes until July 15 up to $1 million dollars and corporations can defer paying taxes until $10 million. There is no clarity yet if the filing deadline will remain at April 15 for individuals and C-corporations. Therefore we must continue assuming that the filing deadline remains the same and only the tax balanc...e will be due until July 15. There was some mentioning that if you file an extension, then both tax return and tax balance will be due until October 15, but it has not been fully clarified. If you still need time to file your taxes, continue filing your extension by April 15 and make sure to pay what you may owe for 2019 by July 15 until we get more clarity since this is a developing story.

If you're self-employed, you should be familiar with these tax deductions.

In certain circumstances, a person or business can deduct unusual expenses if the person or business can prove that there was a valid reason for such deduction. Also, keep in mind that the IRS will allow unusual deductions if it generated additional revenue that wouldn't have been generated if the deductions wouldn't have been done. These type of deductions require proper advance planning. Here's a list of some unusual deductions...

Form W-4 for 2020 The IRS has modified the withholding tables in a new format that now requires to fill out a new W-4. Make sure that you update your W-4 for this year to ensure that the correct withholding is done prior to your first pay period for this year.

The new bill that the president signed on 12/20/2019 has modified some of the tax rules for retirement. -You can now continue contributing to an IRA after age 70 1/2. -The age to do required distributions from an IRA has been increased to age 72 -Any person inheriting an IRA beginning in 2020 must distribute funds within 10 years -You can now withdraw up to $5,000 from a retirement plan if you're expecting a newborn or adopting a child. The withdrawal is taxable but not subje...ct to the 10% penalty. -If you're a recipient to a 529 education plan, you can now withdraw up to $10,000 to repay student loans. -Kiddie Tax: children who have investment income will be taxes the old way...based on their parent's tax bracket instead of the trust rates. -The above-the-line deductions for tuition and fees has been restored for 2018-2020 -The mortgage insurance premiums has also been restored retroactively. We have less than four days left in the year for any last minute tax planning. Make sure that you contact your tax advisor for more details...

Thank you for your business in 2019. I want to wish you a Merry Christmas and Happy holidays! As I do every year, here's some tax humor for Christmas time. Santa just can't seem to get a break from the IRS. Every year he tries to plan ahead to reduce his massive tax burden.

One new question on the 2019 tax return will be if the individual was involved in any transaction regarding virtual currency. The IRS is now making it a requirement to disclose any investments in cryptocurrency. Failure to not disclose will result in steep penalties.

If the tax rules are complicated, the tax system or process is even more complicated. A tax advocate (who helps taxpayers resolve issues that cannot be resolved through the standard process) has created a map to show how the IRS and its various departments operate. This is the reason why having a tax pro by your side is essential...