TAX PLANNING 2021

It is tax planning time!  From now until the end of the year, our CPAs will be meeting with clients to map out their 2021 taxes and implement strategies to reduce their tax liability.  If you are interested in scheduling an appointment, please make sure to contact us today!

Employee Retention Credit

Did your company’s gross receipts decline by 50% in any quarter for 2020 or by 20% in Q1/Q2 2021 compared to the same quarter in 2019? 

Was your company subject to a full or partial suspension due to a government mandate/order that had a more than nominal (10%) affect on your business?

If so, you could be eligible to receive up to $19,000 per employee through the new Employee Retention Credit (under the CARES act). 

This credit is fully refundable and offsets an employer’s payroll taxes to help keep cash in the business immediately. 

If you think you might qualify or would like to discuss, please contact your CPA and we’d be happy to discuss the ERC with you

DELAY’S AT THE IRS

Unfortunately, it has been our experience that anything mailed to the IRS within the last 18 months to two years can take an incredibly long time for them to process.  We are hearing this same refrain over and over again from other CPAs. This issue seems to be because of COVID.  Most agents are working from home and only come into the office when called in.  Originally, anything that was physically mailed to the IRS was stored in trailers and tracked to be processed in order of receipt.  However, with the trailers literally being moved around the country, the IRS wasn’t able to continue tracking the order of receipt, or even which documents are in which trailer.  So, truly, they are only processing the documents once they open up the trailers.  We do have a practitioner telephone line that we can use for clients in certain circumstances, but unfortunately, sometimes the answer from the IRS is that we just have to wait and be patient.

 

Tax Credit For Time Off for Vaccine

The American Rescue Plan Act of 2021 allows small and midsized employers to get a payroll tax credit for wages paid to employees who are not able to work due to COVID-19.  This act includes leave taken to get the COVID vaccine or to recover from symptoms related to the vaccine.

These credits are available through 9/30/2021.

For more information, please see the IRS fact sheet here: https://www.irs.gov/newsroom/employer-tax-credits-for-employee-paid-leave-due-to-covid-19

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.

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.