Jun 8, 2020
President Trump has signed into law the Paycheck Protection Program Flexibility Act. This law will:
- Relax rules under the Paycheck Protection Program to give borrowers up to 24 weeks instead of 8 weeks to spend the funds;
- Give borrowers more flexibility in how the money is spent by reducing the amount of the loan required to be used on payroll expenses from 75% to 60% and still be eligible for loan forgiveness;
- Extend the minimum loan repayment term from 2 years to 5 years for loans that are not forgiven;
- Allow borrowers to defer payroll taxes without penalty and still be eligible for loan forgiveness; and extend the rehiring safe harbor to from June 30, 2020 to December 31, 2020.
We will update this information as we receive formal guidance and updates in the coming weeks.
Apr 5, 2020
The IRS has updated guidance related to the rebates under the CARES Act. Payments will be made initially based on a qualifying individual’s most recently filed tax return (2018 or 2019). The payment is an advance on a refundable credit on your 2020 return. Individuals who otherwise do not qualify for the credit based on phase out limits on their 2018 or 2019 return may find that income on their 2020 return results in receiving the rebate when they file in 2021.
Rebates equal $1,200 per qualifying individual plus $500 for each qualifying child (generally children under 17 who qualify for the child tax credit). Phase outs begin when AGI exceeds: $75,000 for individuals; $112,500 for head of household; and $150,000 for joint filers.
Additional information is available at the IRS website including updates for how to change your direct deposit information or payment method.
https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know
Apr 1, 2020
This is a must read for any small business owner! Click on link below:
https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp
Jan 22, 2019
The IRS has announced that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year. The relief, announced in IR-2019-03, is prompted by changes in the Tax Cuts and Jobs Act (TCJA). This waiver covers taxpayers whose total withholding and estimated tax payments are equal to or greater than 85% of their taxes owed. For waiver purposes only, this new relief lowers the 90 percent threshold to 85 percent. This means that a taxpayer will not owe a penalty if they paid at least 85 percent of their total 2018 tax liability. If the taxpayer paid less than 85 percent then they are not eligible for the waiver and the penalty will be calculated as it normally would be using the 90 percent threshold. Refer to Notice 2019-11 for further details. The waiver computation will be integrated into a future update of UltraTax/1040 including the revised Form 2210 once released by the IRS.
Dec 4, 2018
The New W-4 Form
A: Form W-4, Employee’s Withholding Allowance Certificate, is an IRS form that employees provide to their employers, to determine the amount of federal income tax to withhold from the employees’ paychecks. The form helps employees adjust withholding based on their personal circumstances, such as whether they have children or a spouse who is also working. The IRS recommends employees check their withholding any time their personal or financial information changes.
The Form W-4 relates to an employee’s federal tax withholding. State withholding is separate.
Has the IRS updated the W-4 form yet?
The IRS revised the Form W-4. The IRS also updated the Withholding Calculator on IRS.gov to help employees who wish to update their withholding in response to the new law or who start a new job or have other changes in their personal circumstances in 2018. In 2019, the IRS anticipates making further changes involving withholding What is a W-4?
.
Who needs to check their withholdings?
Employees should check their withholding at the beginning of each year or when their personal circumstances change. It’s even more important this year for people to do a “paycheck checkup” following the changes in the new tax law. With the new tax law, it’s especially important for certain people to check their withholding.
Among the groups who should check their withholding are:
• Two-income families.
• Retirees with pension income
• People working two or more jobs or who only work for part of the year.
• People with children who claim credits such as the Child Tax Credit.
• People with older dependents, including children age 17 or older.
• People who itemized deductions in 2017.
• People with high incomes and more complex tax returns.
• People with large tax refunds or large tax bills for 2017.
When personal circumstances change that reduce withholding allowances they are entitled to claim, including divorce, starting a second job, or a child no longer being a dependent, an employee has 10 days to submit a new Form W-4 to their employer claiming the proper number of withholding allowances.
Recommendations from your Tax Professional
• Complete a Paycheck Checkup
• Complete a new W-4
• Update Projections for 4th quarter estimates with YTD withholdings
• Call your tax professional with any questions!!
