IRS Issues Tax Guidance on PPP Loans

Ferrone & Associates CPAsBlog

The Treasury Department and the IRS have just released additional guidance on the tax treatment of forgiveness of Paycheck Protection Program (PPP) loans authorized by the Coronavirus Aid, Relief and Economic Security (CARES) Act. But is it enough? The CARES Act says PPP loans may be forgiven without any tax consequences. The new ruling and accompanying revenue procedure follow up … Read More

Get ready for the next merger wave in accounting

Ferrone & Associates CPAsBlog

Between the pandemic, aging CPA firm owners, and staffing tensions, many in the accounting profession anticipate a huge uptick in firm mergers and acquisitions over the next 24 months. If the predictions and emerging trends are right, it’s important for firm leaders to plan accordingly. M&A is a profoundly serious matter, and you need to be prepared. Do not schedule … Read More

3 tips to break up your workday and improve your mental wellbeing

Ferrone & Associates CPAsBlog

If you’re working from home, things can start to feel repetitive. This is a feeling that is being shared by millions, as people all around the world deal with working in the same place as they sleep, eat and raise their family. And it can be detrimental to your mental wellbeing. Columbia University neuropsychologist Sanam Hafeez says: “When our day … Read More

End-of-Year Tax Strategies for Investors

Ferrone & Associates CPAsBlog

Busy season for accountants also, unfortunately, coincides with end-of-year tax planning. As you’re working on this with your clients, here are a few investment strategies from that may delight and help your clients save money next year.   It’s none too soon to review investment strategies that will keep money in your pocket and out of the IRS’s till, which is, … Read More

How to Avoid Scams and Phishing

Ferrone & Associates CPAsBlog

On Wednesday, November 4 the Security Summit reported that taxpayers are being targeted by a new series of text-message scams that impersonate state departments of revenue and tax relief organizations.  In an Internal Revenue Service press release, the Security Summit explains that identity thieves are asking taxpayers to provide bank account information finalize a transfer of Economic Impact Payment funds. … Read More

IRS Announces Taxpayer Relief Initiative

Ferrone & Associates CPAsBlog

The IRS announced a new program, the Taxpayer Relief Initiative, to help taxpayers who are unable to pay their taxes because of the pandemic.  Taxpayers who owe taxes and could not pay have always had options such as installment agreements and offers in compromise, but now they have more options. The highlights of the Taxpayer Relief Initiative, according to the … Read More

Answering an Important Question from a Client

Ferrone & Associates CPAsBlog

Andrew writes:  “Hello Richard, What do you think a “safe” number for my company would be?” My answer: Three months of operating capital is a reasonable amount. It gives you time to react. You can obtain financing, implement operational changes, cut costs, react to market trends and conditions, and a whole host of other uncertainties. (COVID restrictions, changes in tax … Read More

Ignore the Hype! Read this before you apply for your PPP Loan Forgiveness

Ferrone & Associates CPAsBlog

There are issues that have not been dealt with, perhaps the most important of which is the tax effect of loan forgiveness.  The IRS has taken the position, and rightfully so, that if a PPP loan is forgiven, it is considered to be cancellation of debt, which is taxable.  At issue is whether or not Congress passes legislation that will … Read More

Advice for Issues Businesses Owners Face Going Virtual

Ferrone & Associates CPAsBlog

Reopenings begin with masks, conference rooms have gone Zoom, and businesses face a load of new questions — but for many, the future comes down to one: “How am I going to survive?” We all know that virtual does not replace face-to-face and many small businesses have been hurt. But how can we help these businesses transitioning to virtual? A … Read More

13 Tips if You Haven’t Saved for Retirement

Ferrone & Associates CPAsBlog

According to research, most Americans don’t have enough money saved to retire. Fortunately, by taking these steps as early as possible, you can help change that.  Here are 13 tips to help you afford the retirement you deserve. Work Longer: Assuming your employer permits it, it’s the obvious choice. Each additional year shortens retirement while adding a year for additional … Read More

SBA has simplified the loan forgiveness process

Ferrone & Associates CPAsBlog

Good news for borrowers with PPP loans of $50,000 or less: The SBA has simplified the loan forgiveness application process. Now you just need to fill out a 1-page application, provide supporting documentation, and certify that funds were used for approved purposes in order to qualify for forgiveness. Documents Required: 3rd Party payroll reports (Gusto, ADP, Paychex, etc.) or self-generated … Read More

How Firms Can Take Advantage of New Technology and Resources

Ferrone & Associates CPAsBlog

During this last year, we have learned so much about managing our remote workforce, rethinking the scope and delivery of our services, and about new and new-to-us resources and tools that have helped us transition and adapt. There is no argument that established, virtual firms had a leg up on the competition. Although it may seem that we have made … Read More

Remote workers may provide tax savings for employers

Ferrone & Associates CPAsBlog

Working remotely during the pandemic may become routine, as both companies and workers come to appreciate the convenience and savings available.  There are also many opportunities to save on taxes imposed by local jurisdictions on the business entity. A number of local jurisdictions — and the list is growing — impose local taxes on business entities. In some cases, such … Read More

4 ways to overcome resistance towards a new process or tool at your firm

Ferrone & Associates CPAsBlog

New ideas can help you and your firm save time, money, and increase the number of clients you serve. But any idea — whether it’s a tool, system, process, or just a new way to do things — requires change. And people resist change. If you’re part of a firm, and you’ve identified a need for change, how do you … Read More

Q&A: Tax Code Changes for Individuals in 2020

Ferrone & Associates CPAsBlog

The year 2020 has been filled with change, and the tax code is no exception to this. Recently, yet another occurred: Taxpayers are now temporarily allowed to deduct charitable contributions. The tax code allows individuals to deduct donations to charities only if they itemize on Form 1040’s Schedule A. They can’t claim contributions when they use the standard deduction amounts … Read More

Why Automation Will Change the Way Your Firm Does Business

Ferrone & Associates CPAsBlog

You must prepare for the future — today. Automation isn’t about replacing people with machines. It’s simply the next step in the accounting evolution. Automation is: Fast. It allows accountants to spend their time using data to create a value-focused firm. More accurate. No more transposition errors or other costly human errors. Automation is a cut-and-paste action rather than transposing. … Read More

Turning off the always-on economy: How to take back control of your time, work, and sanity.

Ferrone & Associates CPAsBlog

Just a few years ago, people saw technology as exciting and filled with possibilities.  But the constant notifications, alerts, and reminders are taking a serious toll on our productivity, our social lives, and our mental health. You can see this epidemic first-hand in coffee shops worldwide. Workers have one eye on Slack, one eye on email, and no eyes left … Read More

Form 1099-NEC Officially Replaces 1099-MISC for Reporting Payments to Nonemployees

Ferrone & Associates CPAsBlog

In case you haven’t heard, there’s a new tax form on the block for business filers for the 2020 tax year. Form 1099-NEC, Nonemployee Compensation, will be used instead of Form 1099-MISC to report amounts paid by businesses to independent contractors and others who provide services. In actuality, the new Form 1099-NEC isn’t entirely “new.” It’s an updated version of … Read More

Your Best Defense Against Ransomware

Ferrone & Associates CPAsBlog

Not too long ago, the WannaCry ransomware attack was all over the news, infecting over 400,000 computers. The threat was fairly straightforward: Pay us or we’ll erase your files. Ransomware, like the WannaCry attack, works by encrypting your files to prevent you from using or accessing them. After your files are compromised, the hackers behind the attack then pop up … Read More

How Does the Medicare Surcharge Affect Self-Employed Individuals?

Ferrone & Associates CPAsBlog

In his latest column on Medicare surtaxes, financial guru Julian Block addresses what your self-employed clients need to know about this complex area of tax law. Julian Block has devoted several previous columns to the Medicare surtax of 0.9 percent on earned income. It applies to high-income individuals when their salaries, other kinds of employee compensation, such as severance arrangements … Read More

Emphasis on Divorce Negotiations: a message from a CPA

Ferrone & Associates CPAsBlog

I would encourage anyone involved in a divorce to have their CPA involved in the divorce negotiations. Our recent article about the divorce process includes 8 tax factors to be considered. These are good factors to be aware of and they are seldom included in a divorce decree.  It is important to have a CPA during tax negotiations because these … Read More

8 Tax Areas to Factor into Divorce Negotiations

Ferrone & Associates CPAsBlog

This article addresses eight tactics that may be used to affect your spouse’s net worth, which will directly affect your final financial settlement. You need to be aware of these so that you can gain assurance that all aspects of your spouse’s financial assets are fairly and accurately valued and disclosed on their net worth statement. This will enable your … Read More

IRS urged to stop sending notices for unpaid taxes until it catches up on mail backlog

Ferrone & Associates CPAsBlog

The House Ways and Means Committee is asking the Internal Revenue Service to quit mailing notices for unpaid taxes to taxpayers who may have been affected by the mail backlog at the agency due to the COVID-19 pandemic. Many taxpayers have been receiving balance-due notices from the IRS even though they sent in their tax payments to the IRS months … Read More

Is your password strong enough?

Ferrone & Associates CPAsBlog, Uncategorized

A weak password is still one of the most common ways hackers break-in. Thanks to sophisticated brute-force-attack software readily available online, hackers can try tens of millions of possible password combinations per second. For example, hacking software can guess a five-character password in under three hours. If you only use lowercase letters, it’s 11.9 seconds. You need to have a … Read More

One more IRS refund

Ferrone & Associates CPAsBlog

13.9M taxpayers will get interest on their refunds The IRS is required to add interest to tax refunds on timely filed refund claims issued more than 45 days after the return due date.  The Internal Revenue Service plans to send interest payments averaging $18 to approximately 13.9 million individual taxpayers who filed their 2019 federal income tax returns on time … Read More

Traps to Avoid with Mergers

Ferrone & Associates CPAsBlog

If you are a business owner who is considering a merger at some point, it is vital to learn more about this process early in the game. Any business owner understands the difficulty of starting a new business and keeping the business alive. In most cases, crucial decisions must be made in order for the business to move forward, including … Read More

What you need to know about the Payroll Tax Deferral

Ferrone & Associates CPAsBlog

Recently, Donald Trump included a payroll tax deferral in his executive orders and it is leaving people unsure about what to do. CPAs, attorneys, and payroll programmers are all eagerly anticipating guidelines from the Internal Revenue Service and the Treasury Department on how to handle the payroll tax deferral that President Trump included in his executive orders. The IRS is … Read More

How working from home may change your taxes

Ferrone & Associates CPAsBlog

A large percentage of the workforce is now working from home, and company offices may be a thing of the past.  For companies that have gone remote, a new development of work-from-home is state tax nexus. Working in one municipality and living in another is nothing new. But now a large chunk of the workforce is working in one state … Read More

Ferrone and Associates picked as one of the 11 best accountants of SLC!

Marci RomneyBlog

Expertise scored 48 accountants in the Salt Lake area and picked the top 11 for their “Best Accountants in Salt Lake City” of 2020.  Expertise’s goal was to “connect people with the best local experts” so they scored accountants on more than 25 different variables across five categories to pick out the best of the best accountants in Salt Lake … Read More

NCCPAP urges Congress to consider automatic forgiveness for smaller PPP loans

Marci RomneyBlog

The National Conference of CPA Practitioners (NCCPAP) is urging Congress to automatically forgive smaller loans under the Paycheck Protection Program, and to make business expenses paid for with forgiven PPP funds are deductible. In a letter written to Congress by the NCCPAP it states that businesses with loans under $150,000 were often those hit hardest by the pandemic, and at … Read More

Planning Beyond COVID-19: the Main Street Lending Program

Marci RomneyBlog, Uncategorized

Small-to-midsized companies in need of capital need to leave no stone unturned. Now that the Federal Reserve Bank is buying Main Street Loans, should you or your clients consider applying for loans through the Main Street Lending Program (MSLP)? With each interim financial statement release, accountants gain greater visibility into the COVID-19 impact on company balance sheets and the need … Read More

6 productivity hacks for remote CPAs

Marci RomneyBlog

As the brick-and-mortar economy flirts with reopening, working from home is becoming the new normal. CPAs have no need to return to crowded offices, especially not in states where COVID-19 is having a second wind. Even if CPAs could resume their usual office rituals, their clients (or colleagues), may not be eager to meet in person. It seems that accounting … Read More

Big Jumps seen in Tax Prep Fees

Marci RomneyBlog

The average fee nationwide to prepare a non-itemized 1040 and a state return jumped almost 26 percent in the last two years, according to a recent survey. That represents a rise of $45. Responses showed that the average cost to prepare an itemized 1040 and a state return rose almost 11 percent from 2018. The average nationwide price for doing … Read More

Many Firms Commit to Permanently Working from Home, Including Ferrone and Associates CPAs

Marci RomneyBlog

According to a new study, two-thirds of accounting firm leaders reported a drop in staff productivity during the coronavirus pandemic, but they’re still committed to allowing employees to work from home even after they reopen their offices. Accountants at firms of all sizes across the U.S., as well as leaders from a range of financial services and professional services companies,  … Read More

Tax-related COVID-19 News You May Not Have Heard

Marci RomneyBlog

Here’s a COVID -19 retirement-related easing that hasn’t got much attention: the 10% fine on pre-age-59 ½ payouts from retirement accounts is waived on up to 4100,000 of coronavirus-related distributions in 2020 from 401(k)s, 403(b)s and IRAs. A coronavirus-related distribution is defined as a payout to an individual who experiences financial difficulties from being diagnosed with COVID-19; who has a … Read More

Good News for Small Business Owners Regarding the PPP

Marci RomneyBlog

On Friday, June 5, the new Paycheck Protection Program Flexibility Act of 2020 was signed. This new legislation amends the Small Business Act and the CARES Act. The Paycheck Protection Program Flexibility provides PPP borrowers with more flexibility on PPP loan forgiveness. Here are some of the highlights: Gives borrowers the option to extend the “covered period” for loan forgiveness from … Read More

When to Expect your Paper Stimulus Check

Marci RomneyBlog

Some people expecting paper stimulus checks may have to wait months before seeing the payment in their mailbox. IRS is sending paper checks to individuals who qualify for the economic impact payment but didn’t get it directly deposited into their bank accounts. Some checks have already been mailed out to taxpayers. For the rest, the Service will send out approximately … Read More

Tax Rebates and Stimulus Checks

Marci RomneyBlog

Dead people are not eligible to receive an economic impact payment. The IRS says that if you got a stimulus payment for someone who died, you must return it. If the payment was made to joint filers and one spouse is still alive, you need to return only the decedent’s portion and can keep the remainder. See www.kiplinger.com/linke/deceased on how … Read More

Multiple Cash Flow Scenario That Helps Adjust for Uncertainty

Marci RomneyBlog

COVID-19 and the associated shelter-in-place orders around the country have impacted business leaders enormously. Everyone is waiting for the dust to settle to see how deeply the economic downturn may go. The crucible of the post-COVID marketplace will ramp up urgency; business owners need to understand and respond with increasingly accurate and effective strategies. COVID-19 has not changed the reality … Read More

Tax News that has been overlooked during COVID-19

Marci RomneyBlog

With COVID-19 dominating the news cycle, other issues are being overlooked. A prime example is the fate of Obamacare, which is before the Supreme Court. In late 2019, an appeals court ruled that the individual mandate is unconstitutional because the tax reform law eliminated the penalty tax for noncompliance. In March, the high court agreed to hear the case, including … Read More

Obligations for Gig Economy Workers

Marci RomneyBlog

Educating gig economy workers on their obligations is a goal of the IRS. Many individuals who take on freelance gigs from online sites or rent out their homes or rooms through a website or app do not receive a W -2 or 1099 for their work. Some are unaware that their income is taxable or, depending on the circumstances, that … Read More

Bad News for Small Businesses that take out PPP Loans

Marci RomneyBlog

The IRS has recently released some bad news for small business firms: the businesses can’t deduct expenses that result in forgiveness of the loan. The stimulus law says that loans forgiven under the Paycheck Protection Program are nontaxable. But the legislation is silent on whether expenses that are funded by the PPP loan proceeds, such as payroll costs, utilities, and … Read More

Just released: SBA “Paycheck Protection Program Loan Forgiveness Application” Form and Instructions

Marci RomneyBlog

It has become clear that the SBA requirements for loan forgiveness will require detailed records and supporting documents.  Navigating a lengthy and detailed application can be tricky, but the good news is that you will be rewarded for your hard work.  To make sure everything is done correctly you will want a qualified CPA in your corner to help you … Read More

SBA slashes disaster-loan limit from $2 million to $150,000, shuts out nearly all new applicants

Marci RomneyBlog

An emergency disaster lending program for small businesses has been so overwhelmed by demand that it has significantly limited the size of loans it issues, while blocking nearly all new applications from small businesses, according to people familiar with the situation. After initially telling businesses that individual disaster loans could be as high as $2 million, SBA has now imposed … Read More

What Now? Next Steps for Phase 4 Relief

Marci RomneyBlog

Among other tax changes, the CARES Act loosened rules governing net operating loss deductions (NOLs). These modifications provided much-needed relief for businesses, and there is an opportunity to build upon them in upcoming “Phase 4” economic relief legislation. Contrary to some of the rhetoric surrounding the changes to NOL deductions in the CARES Act, the provisions are a step forward … Read More

No PPP Loan? Then you may qualify for a Credit.

Marci RomneyBlog

If you weren’t able to get a PPP Loan… this one is you.The Internal Revenue Service is reminding employers who have been impacted by the Coronavirus pandemic that three new credits are available for them. The first of these, the Employee Retention Credit, is intended to encourage businesses to keep employees on the payroll. The ERC is a refundable tax … Read More

SBA provides a safe harbor for PPP loans under $2 million

Marci RomneyBlog

“Businesses that together with their affiliates accepted Paycheck Protection Program (PPP) funds of less than $2 million will be assumed to have performed the required certification concerning the necessity of their loan requests in good faith, according to guidance posted by the U.S. Small Business Administration (SBA) on Wednesday. According to the SBA, borrowers with loans below the $2 million … Read More

Are PPP Loans going to be Taxable Income?

Marci RomneyBlog

A bipartisan group of lawmakers introduced legislation on May 6 to enable small businesses to deduct their expenses even if they have received a loan from the federal government’s Paycheck Protection Protection Program that was later forgiven. On April 30, the IRS issued a notice that said small businesses couldn’t deduct these expenses and that no tax deduction is allowed … Read More

IRS UPDATE: 2nd QUARTERLY ESTIMATED TAX PAYMENT POSTPONED

Marci RomneyBlog

On March 21, the IRS officially announced that it was extending the deadline for filing 2019 tax returns and paying any required tax from April 15 to July 15, along with the due date for the first quarterly installment of estimated tax for 2020. But it didn’t say anything about the second quarter, until now.  The IRS is setting the … Read More

The big mistake newly remote businesses are making

Marci RomneyBlog

There is one all-too-common mistake that firms are making right now: trying to replicate their existing communication practices across their newly distributed team. A video conferencing solution such as Zoom is brilliant for replacing in-person meetings, and instant messaging tools like Slack or Microsoft Teams can be useful for hashing something out quickly or as a virtual ‘water-cooler’. However, these … Read More

Common Mistakes Taxpayers are making and how to avoid them

Marci RomneyBlog

It’s no surprise that many taxpayers are making mistakes including missing or inaccurate Social Security numbers, misspelled names, wrong filing statuses, math errors, and incorrect bank account numbers when giving their information to their preparer. Outside of Utah, clients still misunderstand that although they might not be able to itemize deductions for IRS purposes, they still might be able to … Read More

PPP Loans – How to Track Your Finances After Filing

Marci RomneyBlog

Now that you’ve wrapped up your Paycheck Protection Program (PPP) loan application, it’s time to move on to the next step. As you likely noticed, there is a precise list of approved uses for your government-granted funds, so you and your business must keep detailed records of your expenses to avoid needing to pay it all back.  Approved Uses for … Read More

IRS Introduces Get My Payment to Track Stimulus Payments

Marci RomneyBlog

The Internal Revenue Service, working with the Treasury Department, announced the new tool Get My Payment, enabling taxpayers to check on their Economic Impact Payment date and update direct deposit information. Get My Payment will help taxpayers track the Economic Impact Payments as they start to hit bank accounts, and will answer common questions. It will also show the projected … Read More

IRS not processing paper tax returns due to coronavirus

Marci RomneyBlog

The Internal Revenue Service has stopped processing paper tax returns, with much of its staff now working remotely because of the novel coronavirus pandemic, and is encouraging taxpayers to file their taxes electronically during the three-month extension period for this year’s tax season. The IRS said Friday that to protect the public and its own employees, and in compliance with … Read More