07 Apr 2020
0

IRS Q&A on CARES Act Employee Retention Tax Credit

Roger Rossmeisl, CPA
Small Business Tax Briefs
IRS Q&A on CARES Act Employee Retention Tax Credit

The recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a refundable employee retention tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 pandemic. The employee retention credit is available to employers, including nonprofit organizations, with operations that have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis. IRS ISSUES FAQs The IRS has now released FAQs about the credit. Here are some highlights. How is the credit calculated? The credit is 50% of qualifying wages paid up to $10,000 in total. So the maximum credit for an...

01 Apr 2020
0

New SBA Website Discusses CARES Act Relief

Roger Rossmeisl, CPA
Small Business Tax Briefs
New SBA Website Discusses CARES Act Relief for Businesses

On March 27, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, PL 116-136). Among other provisions, the CARES Act contains several new SBA loan and debt relief programs, including the: Paycheck Protection Program, Economic Injury Disaster Loans, and SBA debt relief, for the self-employed, independent contractors, and small and large businesses suffering economic damage from the Coronavirus (COVID-19) outbreak. The Small Business Administration (SBA) has a new website called Coronavirus (COVID-19): Small Business Guidance and Loan Resources. The new website includes information on the aforementioned new SBA programs that were enacted as part of the CARES Act, as well as information on the following SBA Express Bridge Loans and other guidance/resources: SBA Express Bridge Loan Pilot Program SBA Economic Injury...

01 Apr 2020
0

Expanded Coverage of the CARES Act

Roger Rossmeisl, CPA
Individual Tax Briefs, Small Business Tax Briefs, Taxes
Expanded Coverage of the CARES Act

This post provides expanded coverage of the CARES Act, Congress’s gigantic economic stimulus package that the President signed into law on March 27, 2020. PROVISIONS AFFECTING INDIVIDUALS Recovery rebates for individuals To help individuals stay afloat during this time of economic uncertainty, the government will send up to $1,200 payments to eligible taxpayers and $2,400 for married couples filing joints returns. An additional $500 additional payment will be sent to taxpayers for each qualifying child dependent under age 17 (using the qualification rules under the Child Tax Credit). Rebates are gradually phased out, at a rate of 5% of the individual’s adjusted gross income over $75,000 (singles or marrieds filing separately), $122,500 (head of household), and $150,000 (joint). There is no income floor or ‘‘phase-in’’—all recipients who are under...

31 Mar 2020
0

CARES Act Provides More Tax Relief for Businesses

Roger Rossmeisl, CPA
Small Business Tax Briefs
CARES Act Provides More Tax Relief for Businesses

On 3/27/20, President Trump signed into law another coronavirus (COVID-19) law.  The CARES Act provides more tax relief for businesses employers. Here are some of the tax-related provisions in the Coronavirus Aid, Relief, and Economic Security Act.  Employee retention credit The new law provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 crisis. Employer eligibility. The credit is available to employers with operations that have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers that have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis. The credit isn’t available to employers receiving Small Business Interruption Loans under...

24 Mar 2020
0

Coronavirus Tax Relief for Small Businesses

Roger Rossmeisl, CPA
Small Business Tax Briefs
Coronavirus Tax Relief for Small Businesses

Businesses across the country are being affected by the worldwide pandemic. Fortunately, Congress recently passed Coronavirus tax relief for small businesses. In a separate development, the IRS has issued guidance allowing taxpayers to defer any amount of federal income tax payments due on April 15, 2020, until July 15, 2020, without penalties or interest.  New law On March 18, the Senate passed the House's Coronavirus bill, the Families First Coronavirus Response Act. President Trump signed the bill that day. It includes: Paid leave benefits to employees, Tax credits for employers and self-employed taxpayers, and FICA tax relief for employers. Tax filing and payment extension In Notice 2020-18, the IRS provides relief for taxpayers with a federal income tax payment due April 15, 2020. The due date for making federal income...

17 Mar 2020
0

Tax Credit for Businesses Whose Employees Receive Tips

Roger Rossmeisl, CPA
Small Business Tax Briefs
Tax Credit for Businesses Whose Employees Receive Tips

Are you an employer who owns a business where tipping is customary for providing food and beverages? You may qualify for a tax credit for businesses involving the Social Security and Medicare (FICA) taxes that you pay on your employees’ tip income. How the credit works The FICA credit applies with respect to tips that your employees receive from customers in connection with the provision of food or beverages, regardless of whether the food or beverages are for consumption on or off the premises. Although these tips are paid by customers, they’re treated for FICA tax purposes as if you paid them to your employees. Your employees are required to report their tips to you. You must withhold and remit the employee’s share of FICA taxes, and...

28 Feb 2020
0

Tax Limits Affecting Businesses Increased for 2020

Roger Rossmeisl, CPA
Small Business Tax Briefs
Tax Limits Affecting Businesses Increased for 2020

How much can your employees contribute to 401(k) plans this year? How much do employees have to earn in 2020 before they can stop paying Social Security tax? An array of tax limits affecting businesses are annually indexed for inflation, and many have increased for 2020. Here are some that may be important to you and your business. Social Security tax The amount of employees’ earnings that are subject to Social Security tax is capped for 2020 at $137,700 (up from $132,900 for 2019). Deductions Section 179 expensing: Limit: $1.04 million (up from $1.02 million for 2019) Phaseout: $2.59 million (up from $2.55 million) Income-based phase-out for certain limits on the Sec. 199A qualified business income deduction begins at: Married filing jointly: $326,600 (up from $321,400) Married filing separately:...

20 Feb 2020
0

2020 Business Mileage Rates Decrease

Roger Rossmeisl, CPA
Small Business Tax Briefs
2020 Business Mileage Rates Decrease

This year, the optional 2020 business mileage rates used to calculate the deductible costs of operating an automobile for business decreased by one-half cent, to 57.5¢ per mile. As a result, you might claim a lower deduction for vehicle-related expense for 2020 than you could for 2019. Calculating your deduction Businesses can generally deduct the actual expenses attributable to business use of vehicles. This includes gas, oil, tires, insurance, repairs, licenses and vehicle registration fees. In addition, you can claim a depreciation allowance for the vehicle. However, in many cases depreciation write-offs on vehicles are subject to certain limits that don’t apply to other types of business assets. The cents-per-mile rate comes into play if you don’t want to keep track of actual vehicle-related expenses. With this approach,...

13 Feb 2020
0

Employers Must Disclose Retirement Income to Employees

Roger Rossmeisl, CPA
Small Business Tax Briefs
Employers Must Disclose Retirement Income to Employees

As you’ve probably heard, a new law was recently passed with a wide range of retirement plan changes for employers and individuals. One of the provisions of the SECURE Act involves a new requirement for employers that sponsor tax-favored defined contribution retirement plans that are subject to ERISA.  Soon, employers must disclose retirement income to employees.  Specifically, the law will require that the benefit statements sent to plan participants include a lifetime income disclosure at least once during any 12-month period. The disclosure will need to illustrate the monthly payments that an employee would receive if the total account balance were used to provide lifetime income streams, including a single life annuity and a qualified joint and survivor annuity for the participant and the participant’s surviving...

08 Feb 2020
0

SECURE Act Helps Secure Employees Retirement

Roger Rossmeisl, CPA
Small Business Tax Briefs
SECURE Act Helps Secure Employees Retirement

A significant law was recently passed that adds tax breaks and makes changes to employer-provided retirement plans. If your small business has a current plan for employees or if you’re thinking about adding one, you should familiarize yourself with the new rules.  The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) was signed into law on December 20, 2019 as part of a larger spending bill. Here are three provisions of interest to small businesses which helps secure employees retirement. Employers that are unrelated will be able to join together to create one retirement plan Beginning in 2021, new rules will make it easier to create and maintain a multiple employer plan (MEP). A MEP is a single plan operated by two or more unrelated employers....

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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