While stimulus checks and forgivable loans have received a lot of attention during the COVID-19 shutdown, businesses and individuals should not overlook other available relief provisions that could help them reduce taxes and improve cash flow. Several of these measures could enable a taxpayer to file amended federal tax returns to recover taxes paid in previous years and request a refund. (more…)
The Cares Act Creates Charitable Tax Incentives
Many individuals incorporate charitable giving into their estate plans, providing assistance to their favorite charities while preserving sufficient assets for their heirs. Typically, the charitable donations are structured to maximize the tax benefits on the books.
Now, the Coronavirus Aid, Relief and Economic Security (CARES) Act increases those tax incentives. Under the CARES Act — adopted to address the fallout from the COVID-19 pandemic — taxpayers of all stripes may realize additional tax savings from charitable donations in 2020. (more…)
Multistate Tax Issues: Evolving State Standards Require Careful Attention
One consequence of the long-term shift toward a service-based economy is a change in how states determine the corporate income tax, sales tax, and employee payroll withholding requirements for companies that are active in multiple states. The lack of a consistent nationwide approach can create complexities for companies that have facilities, sales, or personnel in multiple jurisdictions.
Further, the rise in telecommuting during the COVID-19 pandemic has focused additional attention on the issue. So far, only a handful of states have issued specific guidance regarding the tax questions that arise when a company’s employees work remotely from other states. Telecommuting employees can create income tax, sales tax, and payroll withholding issues for their employers. (more…)
IRS Guidance Offers Relief and Confusion
Recent guidance from the IRS has granted additional relief to taxpayers impacted by California wildfires and created uncertainty for the implementation of one of President Trump’s August 8th Executive Actions. (more…)
US Tax News August 2020
Below is a summary of the Federal COVID-19 related updates from August 2020. (more…)
2020 Required Minimum Distributions (RMDs) - Waived Under the CARES Act
By Angel Nevis, CPA, Senior Tax Manager; Anu Joshi, CPA, Senior Tax Manager; Chris Madrid, CPA, Tax Director, ASL Family Wealth & Individual Tax Planning Group
ACTION REQUIRED BY AUGUST 31, 2020
If you have taken required minimum distributions from a retirement account in 2020 or are planning to, don’t miss this relief provision and potential tax-saving opportunity.
For the 2020 tax year only, RMDs from retirement accounts are not required. This includes distributions from traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, and profit-sharing plans. The waiver was recently expanded to include distributions from inherited IRAs, and also applies to certain taxpayers who reached RMD age in 2019. (more…)
COVID-19 Recovery - How the Employee Retention Credit Could Improve Cash Flow
As post-COVID recovery efforts gain momentum, many businesses are taking a fresh look at some federal stimulus and tax relief programs they had not previously considered. One such program, the employee retention credit contained in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, could be especially useful in helping companies bring back furloughed or laid-off employees.
In addition to helping reduce employment tax obligations, it could also help cash-strapped companies of any size improve cash flow during times of reduced revenue. (more…)
Coping with Coronavirus - Recordkeeping Challenges for PPP Loan Recipients
The Paycheck Protection Program (PPP) has helped millions of businesses cope with the consequences of the COVID-19 shutdown. But, like any large and complex program, the PPP has also generated a lot of questions, particularly regarding the records borrowers must keep to qualify for loan forgiveness.
The rules governing PPP loan forgiveness cover a broad range of operational and financial areas and involve numerous tax and financial reporting documents. Some of the rules also have changed over time, further complicating the recordkeeping requirements. (more…)
Qualified Improvement Property Changes Create Tax Savings
By Rachel Gillespie, CPA, Principal
ASL Real Estate Group
The Coronavirus Aid, Relief and Economic Security (CARES) Act created several new funding options and tax opportunities for Bay Area businesses. This includes the Paycheck Protection Program, changes to Economic Injury Disaster Loans (EIDL), and the introduction of payroll tax credits for qualifying paid sick leave and for employee retention efforts. The central focus of the changes was to provide immediate cash flow opportunities through low-interest loans, payroll tax credits, and other incentives. While these provisions in the CARES Act often receive the most attention, there was another change that can provide immediate cash flow benefits to both landlords and tenants. Through a technical correction provided in the CARES Act, Qualified Improvement Property (QIP) placed into service in 2018 or later, is now considered 15-year property and eligible for 100% bonus depreciation. This technical correction opens the door to new saving opportunities for qualifying taxpayers. (more…)