2020 Tax Year Deadline Dates

As of today, 4/1/2021, the individual 1040 deadline for both Federal and Georgia to both file and pay has been extended to May 17th.  1120 returns (For C Corporations) are still due by April 15, 2021.  Also, the first quarter 2021 estimated payment is still due April 15th.

UPDATE on April 15th Deadline

In addition to the IRS extending the deadline for filing 1040’s to May 17th, Georgia has announced they will also conform to this deadline date as well.

http://www.gscpa.org/content/Home/News/Professional-News/Georgia-Individual-Income-Tax-Deadline-Extended.aspx

April 15th Tax Deadline

The IRS has pushed back the 4/15 deadline to 5/17.  This is an automatic extension of both the filing and the payment requirement for 2020 tax returns.

As of today, March 18, 2021,  this does not apply to quarterly estimates for 2021 due 4/15, and we do not know yet if the state will also push back their deadline.

PPP FUNDING ENDS 3-31-2021

The Paycheck Protection Program (PPP) ends on March 31, 2021.  Eligible businesses can apply through their bank until that point.  If you have any questions about the PPP, please give your CPA a call as soon as possible.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program

 

Payroll Tax Credits

Confused about the tax credits available for businesses with payroll?  This is a simple little walkthrough to help determine if an employer can take a tax credit for leave due to Covid. https://covidhelp.thomsonreuters.com/paidleavecredit/

PPP LOAN FORGIVENESS

We have received word that the new forms for forgiveness of the PPP will not be available to be processed by the SBA until March 5th.  Please make sure that you are checking with your bank if you received a PPP and you still need to apply for forgiveness.  Please contact your CPA if you have any questions.

2021 TAX SEASON HAS STARTED

Here at LKM, we have already begun processing business and personal returns.  However, due to IRS and GA limitations, we will not be able to efile these returns for another week or two.  Please get in touch with your CPA with any questions.

Consolidated Appropriations Act of 2021

On 12/27, the President signed the Consolidated Appropriations Act of 2021 (the CAA) into law.

We wanted to take this opportunity to highlight critical information for our clients.  Please be aware that this law is less than two weeks old, and so we do not have all the details yet.  Please consider this a “big picture” email, and we will work diligently to get into the details as soon as they are available.  More information is coming!

PPP Expenses – These expenses are now fully deductible.

PPP Forgiveness – Loans of $150,000 or less can use the simplified application (the SBA has 24 days from 12/27 to prepare this form, but then the banks will need time to update their systems)

PPP Second Round – There is a second round of PPP available – but it is very limited.  You may be able to get more PPP funding if you can show a reduction in gross receipts.

Payroll Credits – there were quite a few changes and extensions to various coronavirus payroll credits – if you feel that you qualify for one of these, or would like to discuss further, please contact your CPA

EIDL Advance – The EIDL advance now does not reduce the amount of the PPP forgiveness, and the EIDL is not included in taxable income.

Big 1099 Changes – If you are required to issue 1099s – there are big changes here.  The 1099-MISC form for services (used to be Box 7 of Form 1099-MISC) has been replaced by a new 1099-NEC form.  The deadline for this form is Feb. 1 with no extensions.  The penalties for late filing is $110 per form if filed before 8/1, $270 per form if after 8/1, and $550 if found that the form was willfully not filed.

Georgia Department of Labor Tax Rates 2021

The Georgia Department of Labor has announced that the 2021 tax rate notices will be delayed and will not come out until February 2021.  Please make sure to check your employer portal at the DOL site, or give us a call if you need assistance.

PPP Expenses not Deductible

The IRS has come out with Revenue Ruling 2020-27, which gives us some direction on how to treat the PPP loan and the related expenses.

Lets look at each separately.

If your business received the PPP loan and it is forgiven, that money is considered non-taxable income.

However, the expenses that your business listed to qualify for forgiveness (payroll, utilities, etc) are not deductible in 2020.

 Revenue Ruling 2020-27 clarifies that these 2020 expenses that were used to apply for forgiveness are not deductible, even if the PPP is not forgiven until 2021, as long as you reasonably expect the PPP to be forgiven.

 This is the way that the law currently stands.  There is some talk in Congress about changing the law and making these expenses deductible, but as of this writing, that is still just talk.