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.

 

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.

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.

Stimulus Checks for Non-Filers

The IRS has launched an online tool for non-filers to receive their stimulus payment.  If you think that you are eligible to receive the stimulus payment, but you have not filed your 2018 or 2019 tax return, then follow the link below in order to register with the IRS.

 

https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

 

CORONAVIRUS – INDIVIDUAL TAXPAYERS

As the coronavirus (COVID-19) continues to affect local communities and global economies, you may have concerns about your financial well-being. Or you may be wondering about how recently passed legislation impacts you. We’re providing a high-level summary of some of the key provisions impacting individuals and recommend discussing your particular circumstances with us in more detail.

Relief available

There are several recently enacted tax changes and new or expanded benefits that might be helpful to you.

Income tax provisions:

  • The IRS extended the April 15, 2020 federal income tax filing and payment deadline to July 15, 2020. However, we continue to work on filing returns as soon as possible.
  • First quarter estimated tax payments usually due April 15, 2020 are now extended to July 15, 2020.
  • Georgia has also extended the filing and payment deadlines to July 15, 2020.

Recovery rebates:

  • Payments to individuals of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child are expected to be delivered around mid-April.
  • The recovery rebate begins to phase out for taxpayers with adjusted gross income (AGI) above $150,000 for joint filers, $112,500 for heads of households and $75,000 for other individuals. If you’d like to estimate the amount you’ll receive, download the AICPA’s CARES Act stimulus calculator in excel format cares-act-stimulus-calculator
  • The payment is not taxable.
  • More details on this payment are still forthcoming.

Retirement accounts:

  • Through the end of the year, individuals who are under 59 ½ years old can take up to $100,000 in coronavirus-related distributions from retirement plans without the usual 10% penalty for early distributions. The distributions may be repaid within three years and any resulting income inclusion can be taken over three years.
  • If you were over 70 ½ at Dec. 31, 2019 you won’t have to take required minimum distributions (RMD) in 2020. If your retirement assets have taken a hit, not having to take an RMD may allow those assets to recover some value before you liquidate them..

Other benefits:

IRS PAYMENT DEADLINE EXTENDED

The Treasury Department and the Internal Revenue Service are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak. The filing deadline for tax returns remains April 15, 2020. The IRS urges taxpayers who are owed a refund to file as quickly as possible. For those who can’t file by the April 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request a six-month extension to file their return.

 This payment relief includes:

 Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.

 Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.

This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.

Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15.

The IRS reminds individual taxpayers the easiest and fastest way to request a filing extension is to electronically file Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses must file Form 7004.

This relief only applies to federal income tax (including tax on self-employment income) payments otherwise due April 15, 2020, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details. More information is available at https://www.taxadmin.org/state-tax-agencies.

The IRS established a special webpage on IRS.gov/coronavirus to include the above tax-related information. This page will be updated as more information is available.

GA DEPARTMENT OF LABOR NEWS

The Georgia Department of Labor (GDOL) has adopted an emergency Rule 300-2-4-0.5 Partial Claims, effective March 16, 2020. The rule mandates all Georgia employers to file partial claims online on behalf of their employees for any week during which an employee (full-time/part-time) works less than full-time due to a partial or total company shutdown caused by the COVID-19 public health emergency. Any employer found to be in violation of this rule will be required to reimburse GDOL for the full amount of unemployment insurance benefits paid to the employee. Download the How Employers File Partial Claims Desk-Aid found on the GDOL Alert Page and follow the step-by-step instructions.

Filing partial claims results in your employees receiving unemployment insurance (UI) benefit payments faster, usually within 48 hours for claims filed electronically. Employees for whom you file a partial claim are NOT required to report to a Georgia Department of Labor career center, register for employment services, or look for other work.

Please continue to monitor our website at gdol.ga.gov for any updates to these guidelines.