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
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
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
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
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
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.
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
“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?
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
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