19 Apr 2020
0

CARES Act’s Impact on Excess Business Losses

Roger Rossmeisl, CPA
Individual Tax Briefs
CARES Acts Impact on Excess Business Losses

Back in Blog Post #778 on 4/1/20, I summarized the Coronavirus Aid, Relief, and Economic Security (CARES) Act tax provisions.  That post included a brief discussion of the CARES Act’s impact on excess business losses.  Here is more about the deferral of, and changes to the limit on, excess business losses. Deferral of the excess business loss limits The Tax Cuts and Jobs Act (the 2017 Tax Law) provided that net tax losses from active businesses in excess of an inflation-adjusted $500,000 for joint filers, or an inflation-adjusted $250,000 for other covered taxpayers, are to be treated as net operating loss carryforwards in the following tax year. The covered taxpayers are individuals (or estates or trusts) that own businesses directly or as partners in a partnership or...

19 Apr 2020
0

Get My Payment Application Debuts on IRS.gov

Roger Rossmeisl, CPA
Individual Tax Briefs
Get My Payment Application Debuts on IRS.gov

As appearing in e-News for Tax Professionals: Issue Number 2020-16 Working with the Treasury Department, the new Get My Payment application, allowing taxpayers  to check on their Economic Impact Payments, debuted on the IRS website.  The application will answer common questions as an initial round of more than 80 million Economic Impact Payments hits recipients’ bank accounts. Get My Payment will show the projected date when a deposit has been scheduled, similar to the “Where’s My Refund tool” many taxpayers are already familiar with. Get My Payment also allows people to provide their bank account information. People who did not use direct deposit on their last tax return can also use the application to input their bank information to receive the payment by direct deposit, expediting...

17 Apr 2020
0

IRS Announces More COVID-19 Relief and Details

Roger Rossmeisl, CPA
Individual Tax Briefs
IRS Announces More COVID-19 Relief and Details

In the midst of the Coronavirus (COVID-19) pandemic, Americans are focusing on their health and financial well-being. To help with the impact facing many people, the government has provided a range of relief. Here are some new announcements made by the IRS. More deadlines extended As you probably know, the IRS postponed the due dates for certain federal income tax payments — but not all of them. New guidance now expands on the filing and payment relief for individuals, estates, corporations and others. Under IRS Notice 2020-23, nearly all tax payments and filings that would otherwise be due between April 1 and July 15, 2020, are now postponed to July 15, 2020. Most importantly, this would include any fiscal year tax returns due between those dates and any...

14 Apr 2020
0

Employment Tax Deposit Relief via COVID-19 Tax Credits

Roger Rossmeisl, CPA
Small Business Tax Briefs
Employment Tax Deposit Relief Due to COVID-19 Tax Credits

The IRS has issued guidance providing employment tax deposit relief for employers that are entitled to the refundable tax credits provided under two laws passed in response to the Coronavirus (COVID-19) pandemic. The two laws are the Families First Coronavirus Response Act, which was signed on March 18, 2020, and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, which was signed on March 27, 2020. Employment tax penalty basics The tax code imposes a penalty for any failure to deposit amounts as required on the date prescribed, unless such failure is due to reasonable cause rather than willful neglect. An employer’s failure to deposit certain federal employment taxes, including deposits of withheld income taxes and taxes under the Federal Insurance Contributions Act (FICA) is generally subject to...

09 Apr 2020
0

CARES Act Changes EBP and Charitable Contribution Rules

Roger Rossmeisl, CPA
Individual Tax Briefs
CARES Act Changes EBP and Charitable Contribution Rules

As we all try to keep ourselves, our loved ones, and our communities safe from the coronavirus (COVID-19) pandemic, you may be wondering about some of the recent tax changes that were part of a tax law passed on March 27.  The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains a variety of relief, notably the “economic impact payments” that will be made to people under a certain income threshold. But also, the CARES Act changes EBP rules and provides a new tax break for some people who contribute to charity. Waiver of 10% early distribution penalty IRAs and employer sponsored retirement plans are established to be long-term retirement planning accounts. As such, the IRS imposes a penalty tax of an additional 10% if funds are...

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...

06 Apr 2020
0

COVID-19 Poses Fraud Threats to Businesses

Roger Rossmeisl, CPA
Fraud Briefs
COVID-19 Poses Fraud Threats to Businesses

Scam artists know how anxious business owners are during the current coronavirus (COVID-19) crisis. They know that as you struggle to meet customer demands, pay employees and stay solvent, you’re more likely to drop your guard and fall for a fraud scheme. The last thing your business needs right now is to suffer additional financial losses. So keep an eye out for the latest ways that COVID-19 poses fraud threats to businesses: Fake suppliers Whether you’re a manufacturer seeking raw materials or a grocer desperate to keep shelves stocked, you may have trouble getting your usual supplies. If a regular supplier is temporarily — or permanently — shut down, be careful about doing business with unknown vendors. Many authentic-looking websites are, in fact, fronts for criminal operations,...

01 Apr 2020
0

IRS Q&A on Receiving Economic Impact Payments

Roger Rossmeisl, CPA
Individual Tax Briefs
IRS Q&A on Receiving Economic Impact Payments

In an Information Release (IR 2020-61), the Treasury Department and IRS have announced that distribution of economic impact payments, made as part of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, people who did not file 2018 or 2019 federal income tax returns will need to submit "a simple tax return" to receive the stimulus payment. The Information Release answers the following questions: Who is eligible for the economic impact payment? Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment...

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...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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