Make sure your QuickBooks Desktop subscription is up to date!

Sep 19, 2024

Effective September 30, 2024, QuickBooks intends to stop selling several QuickBooks Desktop subscriptions to new subscribers or users with an outdated subscription. These include:

  • QuickBooks Desktop Premier Plus
  • QuickBooks Desktop Mac Plus
  • QuickBooks Desktop Pro Plus
  • QuickBooks Desktop Enhanced Payroll

Existing subscribers with an active subscription will not be impacted by the change and may continue to renew their subscriptions after the deadline.

Please note: Unsupported versions (versions prior to 2022) of QuickBooks Desktop do not receive Intuit technical support or the latest updates and security patches. It is critical to remain on a supported version of QuickBooks Desktop to ensure technical support if the application crashes.

We recommend that clients with a QuickBooks Desktop Application of 2021 or older consider purchasing a new QuickBooks Desktop subscription before Monday, September 30, 2024.

To learn more about the changes, please visit this article.

Be aware of misleading claims about a “Self-Employment Tax Credit”!

Jul 22, 2024

The Internal Revenue Service issued a consumer alert on July 15th, 2024 following bad advice circulating on social media about a non-existent “Self Employment Tax Credit” that’s misleading taxpayers into filing false claims.

Promoters and social media are marketing something they describe as the “Self Employment Tax Credit” as a way for self-employed people and gig workers to get big payments for the COVID-19 pandemic period. Similar to misleading marketing around the Employee Retention Credit, there is inaccurate information suggesting many people qualify for the tax credit and payments of up to $32,000 when they actually do not.

In reality, the underlying credit being referred to in social media isn’t called the “Self Employment Tax Credit,” it’s a much more limited and technical credit called Credits for Sick Leave and Family Leave. Many people simply do not qualify for this credit, and the IRS is closely reviewing claims coming in under this provision so people filing claims do so at their own risk.

To continue reading the article, click here.

Beneficial Ownership Information (BOI) Reporting Requirement

Feb 20, 2024

Starting January 1, 2024, a significant number of businesses will be required to comply with the Corporate Transparency Act (CTA). The CTA was enacted into law as part of the National Defense Act for Fiscal Year 2021. The CTA requires the disclosure of the beneficial ownership information (otherwise known as “BOI”) of certain entities from people who own or control a company.

It is anticipated that 32.6 million businesses will be required to comply with this reporting requirement. The intent of the BOI reporting requirement is to help US law enforcement combat money laundering, the financing of terrorism and other illicit activity.

The CTA is not a part of the tax code. Instead, it is a part of the Bank Secrecy Act, a set of federal laws that require record-keeping and report filing on certain types of financial transactions. Under the CTA, BOI reports will not be filed with the IRS, but with the Financial Crimes Enforcement Network (FinCEN), another agency of the Department of Treasury.

Below is some preliminary information for you to consider as you approach the implementation period for this new reporting requirement. This information is meant to be general-only and should not be applied to your specific facts and circumstances without consultation with competent legal counsel and/or other retained professional adviser.

 

What entities are required to comply with the CTA’s BOI reporting requirement?

Entities organized both in the U.S. and outside the U.S. may be subject to the CTA’s reporting requirements. Domestic companies required to report include corporations, limited liability companies (LLCs) or any similar entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.

Domestic entities that are not created by the filing of a document with a secretary of state or similar office are not required to report under the CTA.

Foreign companies required to report under the CTA include corporations, LLCs or any similar entity that is formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or any similar office.

Are there any exemptions from the filing requirements?

There are 23 categories of exemptions. Included in the exemptions list are publicly traded companies, banks and credit unions, securities brokers/dealers, public accounting firms, tax-exempt entities and certain inactive entities, among others. Please note these are not blanket exemptions and many of these entities are already heavily regulated by the government and thus already disclose their BOI to a government authority.

In addition, certain “large operating entities” are exempt from filing. To qualify for this exemption, the company must:

    1. Employ more than 20 people in the U.S.;
    2. Have reported gross revenue (or sales) of over $5M on the prior year’s tax return; and
    3. Be physically present in the U.S.

Who is a beneficial owner?

Any individual who, directly or indirectly, either: 

    • Exercises “substantial control” over a reporting company, or
    • Owns or controls at least 25 percent of the ownership interests of a reporting company

An individual has substantial control of a reporting company if they direct, determine or exercise substantial influence over important decisions of the reporting company. This includes any senior officers of the reporting company, regardless of formal title or if they have no ownership interest in the reporting company.

The detailed CTA regulations define the terms “substantial control” and “ownership interest” further.

When must companies file?

There are different filing timeframes depending on when an entity is registered/formed or if there is a change to the beneficial owner’s information.

    • New entities (created/registered in 2024) — must file within 90 days
    • New entities (created/registered after 12/31/2024) — must file within 30 days
    • Existing entities (created/registered before 1/1/24) — must file by 1/1/25
    • Reporting companies that have changes to previously reported information or discover inaccuracies in previously filed reports — must file within 30 days

What sort of information is required to be reported?

Companies must report the following information: full name of the reporting company, any trade name or doing business as (DBA) name, business address, state or Tribal jurisdiction of formation, and an IRS taxpayer identification number (TIN).

Additionally, information on the beneficial owners of the entity and for newly created entities, the company applicants of the entity is required. This information includes — name, birthdate, address, and unique identifying number and issuing jurisdiction from an acceptable identification document (e.g., a driver’s license or passport) and an image of such document.

Risk of non-compliance

Penalties for willfully not complying with the BOI reporting requirement can result in criminal and civil penalties of $500 per day and up to $10,000 with up to two years of jail time.

For more information or to file your report, please go to https://www.fincen.gov/boi .

UPDATE: Paycheck Protection Program Flexibility Act

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.

Stimulus Checks received on behalf of deceased taxpayer

May 11, 2020

The IRS recently released additional information on their Economic Impact Payment (EIP) Information Center webpage regarding the eligibility of deceased taxpayers. The updated information addresses payments issued to deceased taxpayers declaring their ineligibility of the EIP (Q10) and how to return funds (Q41). Please note IRS FAQs are not legal authority or formal guidance and can change at any time.  In addition, the FAQs do not address how or when enforcement of the repayment will be handled.  Considering the language used within the FAQs, that the payment “should be returned” rather than “must be” or “is required to be returned”, recipients of these payments, on behalf of deceased taxpayers, may want to consider holding off taking immediate action until further authoritative guidance is made available.  We will continue to monitor the updates and information as it is made available. For those clients with specific questions related to their situation, please call the office to speak with one of our tax professionals.

https://www.irs.gov/coronavirus/economic-impact-payment-information-center

Recovery Rebates for Individuals

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

IRS provides penalty relief for underpayment of 2018 individual taxes

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.

The New W4 Form

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?
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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!!