Author Archives: c11631804

PPP Loan Forgiveness

Just a quick note…

The Treasury Department has provided the worksheet to apply for the PPP loan forgiveness. If you have received the PPP Loan to cover your payroll costs during the downturn, please take a look at the worksheet/application and let us know if you have any quiestions.

https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf

 

-Heritage Accounting and Tax Services
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GA DOL and COVID-19

The Georgia Department of Labor has released this information that may be relevant to you as an employer in Georgia:

“In response to the recent development of COVID-19, the Georgia Department of Labor (GDOL) is temporarily suspending in-person requirements for services provided by the agency. In accordance with Governor Kemp’s recommendation, the GDOL is providing online access to unemployment services, partial claim access for employers, and other reemployment services.

Employers are required to file partial claims on behalf of their employees whenever it is necessary to temporarily reduce work hours or there is no work available for a short period. 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.”

More information can be found here: https://dol.georgia.gov/blog/new-information-filing-unemployment-partial-claims-and-reemployment-services

 

-Heritage Accounting and Tax Services
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COVID-19 (Coronavirus)

A quick update regarding the COVID-19 Coronavirus:

First of all, we understand your concerns and will work with you to prepare your returns. Also, yes, we’re open and we will remain open throughout the tax filing season (now extended to July 15). And we are still making appointments for anyone who needs one. We are also still available for you to drop off your information to us for tax preparation.

If you have an appointment scheduled, we will proceed as normal. If you are not feeling up to making it out to us, you can always send us your information. Just give us a call beforehand so we know it’s coming.

[update as of 4/20/20] If you receive any emails saying you can check your stimulus payment or SBA loan status if you just “click here,” DO NOT CLICK. There are many scams going around right now trying to get your personal information, from emails to phone calls, even through the mail. Delete the emails, block the phone numbers and move on. You can find most all the information you need, including your payment status, at the IRS website, here:
https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments?fbclid=IwAR21ryb5B-RWPpkJRtYH7vEllwSXPBcyTH3uJAb5lclVohaxc2AbVM7Ga5A

[update as of 4/6/20] The IRS has provided some information regarding the stimulus payments, though there is still no word on exactly when the payments will be sent.
See here

[update as of 4/2/20] The U.S. Department of the Treasury and the Internal Revenue Service today announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an Economic Impact Payment. Instead, payments will be automatically deposited into their bank accounts.
“Social Security recipients who are not typically required to file a tax return do not need to take an action, and will receive their payment directly to their bank account,” said Secretary Steven T. Mnuchin.
The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate $1,200 Economic Impact Payments to Social Security recipients who did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits.
(via https://home.treasury.gov/news/press-releases/sm967)

[update as of 4/1/20] Here is what we know as of today regarding the stimulus checks for those who have not needed to file in recent years:
We are still awaiting guidance on how the IRS will support filing ‘Simple Tax Returns.’
On Monday, March 30, the IRS indicated that those who normally aren’t required to file taxes will need to file a ‘simple tax return’ in order to get a stimulus payment. At this time, the IRS has not provided instruction on how this should be done. By filing these types of returns before you have IRS guidance, you may create more challenges for those taxpayers. We strongly advise preparers against creating small refund amounts by manipulating numbers on the return in order to e-file ‘simple tax returns.’
In addition, the IRS also indicated it would provide a web-based portal in the coming weeks for taxpayers to provide direct deposit information if they didn’t provide it on either their 2018 or 2019 tax return. This portal is not yet available. Taxpayers should be on alert for phishing scams that try to take advantage of this situation.
We will provide more information on how to file taxes for those who need a simple return as soon as we receive it.
(via http://kb.drakesoftware.com/site/browse/16671/filing-for-stimulus-money-simple-returns)

[update as of 3/25/20] Georgia has officially extended its income tax payment AND filing deadline to July 15. This extension is automatic and no further action is needed on the taxpayer’s part. The extension also applies to estimated taxes due on April 15. In addition, there is also a vehicle registration extension to May 15, 2020 for all that expire between March 16, 2020 and May 14, 2020. More information can be found at this link:
https://dor.georgia.gov/press-releases/2020-03-25/georgia-income-tax-and-tag-renewal-deadlines-extended

[update as of 3/20/20] According to Treasury Secretary Mnuchin, the deadline to FILE has been extended by 90 days, along with the deadline to PAY. Any income tax payments due on April 15, 2020 (including estimated taxes) will now be due on July 15, 2020. No additional interest or penalties, or late filing penalties, will accrue until this date. More information can be found at this link: https://www.irs.gov/newsroom/payment-deadline-extended-to-july-15-2020

 

-Heritage Accounting and Tax Services
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When Should I expect My Refund?

Are you (like many Americans) starting to think about the upcoming tax season and when you’ll get your IRS income tax refund?

The tax reform law that took effect in early 2018 will still have an effect on many Americans, with the tax returns they file from January through April 15, 2020 affecting the amount of their refunds.

Several factors can determine when a taxpayer may receive their return, including:

  • When they file
  • If the taxpayer is claiming certain credits
  • Whether the return is e-filed or sent by mail
  • Whether the taxpayer has existing debts to the federal government

The income tax season generally starts in late January, when the IRS officially starts accepting e-filed and mailed-in tax returns. However, in recent years, the start of tax season has often been delayed until early February, due to significant December changes to the tax laws. Keep that in mind this year, since if Congress makes new tax laws in December, it will likely cause a delay at the IRS. (Note: Only a few items were changed: Some credits and deductions were extended into the new tax year. So, tax season should start in late January 2020.)

The IRS is also continuing to delay processing by 2-3 weeks of income tax returns with the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC), since these credits have often been abused. The additional time allows the IRS to verify that taxpayers qualify for the credits.

The below chart shows an estimated timeline for when a taxpayer is likely to receive their refund, based on the information we have now, and using projections based on previous years. If your IRS income tax refund is delayed, ask your tax professional, or simply use the “Where’s My Refund?” tool on the IRS website. Or download the IRS2Go app to check your refund status.

“When Will I Get My 2020 Income Tax Refund?”

IRS Accepts BetweenThese Dates ==== > Direct Deposit Sent(Or Check Mailed)

1/20/20- 1/24/2020— >   Friday 1/31/2020 * 

1/27/20- 1/31/ 20  — > Friday 2/7/20

2/3/20- 2/7/20   — > Friday 2/14/20 ** 

2/10/20- 2/14/20 — >   Friday 2/21/20 ** 

2/17/20- 2/21/20   — > Friday 2/28/20

2/24/20- 2/28/20 — >   Friday 3/6/20

3/2/20- 3/6/20   — > Friday 3/20/20 *** 

3/9/20- 3/13/20 — >   Friday 3/27/20

3/16/20- 3/20/20 — >   Friday 4/3/20

3/23/20- 3/27/20   — > Friday 4/10/20

* = IRS may delay tax filing season by one week or more due to changes in tax law.

** = Returns with EITC or CTC may have refunds delayed until late February to verify credits.

*** = Filing during peak season can result in slightly longer waits.

3/29/20- 4/3/20 — > Friday 4/17/20

4/6/20- 4/10/20 — >   Friday 4/24/20

4/13/20- 4/12/20 — >   Friday 5/1/20

4/20/20- 4/24/20 — >   Friday 5/8/20

4/27/20- 5/1/20 — >   Friday 5/15/20

5/4/20- 5/8/20 — >   Friday 5/22/20

5/11/20- 5/15/20 — >   Friday 5/29/20

5/18/20- 5/22/20   — > Friday 6/5/20

5/25/20- 5/29/20   — > Friday 6/12/20

6/1/20- 6/5/20 — >  Friday 6/19/20

IMPORTANT: If you file electronically (using an online tax program or preparer), the IRS will notify you of the actual date they “accepted” your return. This is often 1-3 days from the time you actually hit the “file” or “submit” button, and it is this date that you need to use for the above chart.

Taxpayers who mail a paper version of their income tax return can expect at least a 3-4 week delay at the front-end of the process, as the return has to be manually entered into the IRS system before it can be processed.

Be Safe – Hire a Professional

Taxpayers who use a professional, such as a CPA or EA, can ask that professional for the estimated date of their tax refund, and they can be more confident that their taxes have been properly (and legally) filed.

There are also apps for Apple, Android and other devices that help track refund status.

Other Notes:

In general, the IRS says that returns with refunds are processed and payments issued within 21 days. For paper filers, this can take much longer, however. The IRS and tax professionals strongly encourage electronic filing.

What If You Can’t File Your Income Taxes By April 15?

Taxpayers who don’t have all of the paperwork needed in order to file their taxes can easily file an extension form, “Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.” – This will give the taxpayer until October 15 to file their tax return. No reason or excuse is needed to receive this extension, and as the title states, it is automatically granted.

However, if a person will owe taxes, it is still their obligation to pay those taxes by April 15, even if they have requested an extension to file. A professional can assist with this. Those who are due a refund generally only need to file the extension request by April 15. Any tax professional and most do-it-yourself tax programs can perform this task.

[Tax refund chart from www.CPAPracticeAdvisor.com]

 

-Heritage Accounting and Tax Services
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Starting With A Strong Finish

As you head into a new year, you also have a lot of new opportunities for your business. But how do you know if you’re well-positioned to take advantage of these opportunities? The best thing you can do for your business this coming year is to be sure you know how you finished up last year. Having an accurate picture of what happened in the past will help you prepare for the opportunities that lie ahead. In fact, spending a few hours on this now could make or save you thousands or more this year. Since you will need to have all this information together for preparing your taxes anyway, you should go ahead and get it done before getting too far into the new year.

If you haven’t been keeping up with your income, expenses, and other transactions throughout the year, it can be rather daunting to think about even where to begin. We have a very handy worksheet available here that will help you with the process. One particularly important area to be sure that you have an accurate accounting of is your business mileage and travel expenses for the year. We have a mileage log available here to help you with this, but there is more to consider than just how many miles you put on your vehicle during the year. For example, miles to and from your home are considered commuting miles and cannot be taken as a business expense, unless you meet a specific criteria. Also, you must substantiate certain travel and meals expenses in order to receive any tax benefit. You can read about some of the requirements in this same brochure, but your particular situation may vary. Come and see us to be sure you are staying compliant and receiving the full benefit available to you.

We hope that this coming year brings with it exciting new opportunities for you and your business. As always, we are available to help you in this process, as well as with the year ahead. Come in and see us!

 

-Heritage Accounting and Tax Services

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In Thanksgiving

The holiday season is upon us, and it brings with it all the busyness and anxiety of meals to prepare, family and friends to entertain, shopping to accomplish and more. In the midst of all this, be sure to take some time to look around at all you have. If you’re anything like me, you’ll realize it’s much more than you need. Too often we get caught up in what we don’t have or what we want to have that we miss so many of the blessings surrounding us. See if you can name some things you’re thankful for and share that with others. Take a few of these quotes with you this season, and maybe we can all remember to be a little more grateful for all we’ve been blessed with.

“We are no longer impressed by the miracle of modern agriculture, affordable electricity, air-conditioning, smooth roads, suspension bridges, winged-flight, or any number of other things that used to unite us with a shared sense of wonder. This is why we blame the plumber for charging us ‘too much.’ We resent him, precisely because we need him.”
“The people we rely upon most are the same people we most often take for granted.”
-Mike Rowe

“No one who achieves success does so without the help of others. The wise and confident acknowledge this help with gratitude.”
-Alfred North Whitehead

“A grateful heart sees each day as a gift. Thankful people focus less on what they lack and more on the privileges they have.”
“The grateful heart is like a magnet sweeping over the day, collecting reasons for gratitude.”
“Gratitude gets us through the hard stuff. To reflect on your blessings is to rehearse God’s accomplishments. To rehearse God’s accomplishments is to discover his heart. To discover his heart is to discover not just good gifts but the Good Giver. Gratitude always leaves us looking at God and away from dread. It does to anxiety what the morning sun does to valley mist. It burns it up.”
-Max Lucado

We are thankful for all of you and wish you a Happy Thanksgiving!

-Heritage Accounting and Tax Services <><

Tax Tables

The IRS has released some updated rates and information for 2019, including tax rates adjusted for inflation. If you like that sort of thing, you can read all about it here. For a brief synopsis of the new tax tables for individual, we have them here and below. Yes, that is a brief synopsis. Have no fear, however; this is why we’re here. If you have any questions or notice you are near one of the income limits, we would love to hear from you.

2019 INDIVIDUAL INCOME TAX BRACKETS

(A) MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES

If taxable income is: The tax is:
Not over $19,400 10% of taxable income.
Over $19,400 but not over $78,950 $1,940 plus 12% of the excess over $19,400.
Over $78,950 but not over $168,400 $9,086 plus 22% of the excess over $78,950.
Over $168,400 but not over $321,450 $28,765 plus 24% of the excess over $168,400.
Over $321,450 but not over $408,200 $65,497 plus 32% of the excess over $321,450.
Over $408,200 but not over $612,350 $93,257 plus 35% of the excess over $408,200.
Over $612,350 $164,710 plus 37% of the excess over $612,350.

(B) HEADS OF HOUSEHOLDS

If taxable income is: The tax is:
Not over $13,850 10% of taxable income.
Over $13,850 but not over $52,850 $1,385 plus 12% of the excess over $13,850.
Over $52,850 but not over $84,200 $6,065 plus 22% of the excess over $52,850.
Over $84,200 but not over $160,700 $12,962 plus 24% of the excess over $84,200.
Over $160,700 but not over $204,100 $31,322 plus 32% of the excess over $160,700.
Over $204,100 but not over $510,300 $45,210 plus 35% of the excess over $204,100.
Over $510,300 $152,380 plus 37% of the excess over $510,300.

(C) UNMARRIED INDIVIDUALS OTHER THAN SURVIVING SPOUSES AND HEADS OF HOUSEHOLDS

If taxable income is: The tax is:
Not over $9,700 10% of taxable income.
Over $9,700 but not over $39,475 $970 plus 12% of the excess over $9,700.
Over $39,475 but not over $84,200 $4,543 plus 22% of the excess over $39,475.
Over $84,200 but not over $160,725 $14,383 plus 24% of the excess over $84,200.
Over $160,725 but not over $204,100 $32,749 plus 32% of the excess over $160,725.
Over $204,100 but not over $510,300 $46,629 plus 35% of the excess over $204,100.
Over $510,300 $153,799 plus 37% of the excess over $510,300.

(D) MARRIED INDIVIDUALS FILING SEPARATE RETURNS

If taxable income is: The tax is:
Not over $9,700 10% of taxable income.
Over $9,700 but not over $39,475 $970 plus 12% of the excess over $9,700.
Over $39,475 but not over $84,200 $4,543 plus 22% of the excess over $39,475.
Over $84,200 but not over $160,725 $14,383 plus 24% of the excess over $84,200.
Over $160,725 but not over $204,100 $32,748 plus 32% of the excess over $160,725.
Over $204,100 but not over $306,175 $46,628 plus 35% of the excess over $204,100.
Over $306,175 $82,355 plus 37% of the excess over $306,175

-Heritage Accounting and Tax Services
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Mileage!

QUESTION: Can you take mileage as a tax deduction?
ANSWER: Yes, but…

If you use your vehicle to travel around for work, you are able to take a flat rate for each mile you put on your car as a tax deduction. However, there are certain considerations to be sure you are aware of first.

  1. Be sure that it is not commuting miles – miles to and from your home and the first or last place of work are considered commuting miles and cannot be taken as a deduction. IF you have your own business and you have an office in your home (used exclusively for business purposes), then that is considered your first and last place of work and miles to and from here are considered deductible.
  2. Keep good records – the IRS is very picky about the records of your mileage if you are ever selected for review or audit. The law is clear that good records must be kept and markings on a calendar or directions from Google are not sufficient to justify your mileage as business mileage. We will look at the record-keeping in more detail in a moment.
  3. It may not be the best way – you may be able to get an even better benefit than a tax deduction for your mileage. The IRS 2019 mileage rate is 58 cents per mile. If you are in the highest (37%) tax bracket, this means you save 21.46 cents for each mile driven (1000 miles = $215 savings). However, if you work out an accountable reimbursement plan with your employer (which is surprisingly easy to do if you own your business!), then you can save even more. Say you drive the same 1,000 miles but you get a reimbursement for only half of the IRS rate (29 cents per mile). You now have a reimbursement of $290, and it’s tax free to you! However, you STILL must keep good records, because the IRS can also disallow this plan without them. Let’s take a closer look at record-keeping.

Ideally, the best practice for keeping your mileage is to have not only the miles driven, but also the date, location(s), odometer readings and business purpose of the trip. You may also want to include any other business expenses of the trip. While odometer readings aren’t necessarily required, they can be considered by the IRS. Here’s an excerpt from the IRS manual where the IRS tells its examiners to look at odometer readings to verify total miles for the year:

“To verify total miles for the year, the taxpayer should provide repair receipts, inspection slips or any other records showing total mileage at the beginning of the year as well as at the end of the year.” -Internal Revenue Manual

So, per their own internal manual, the IRS considers the request for odometer readings a reasonable request. You may be able to avoid this if you have adequate proof of mileage apart from the odometer, but you may also avoid a lot of headache by keeping track of the odometer as well.

Here’s an example of tracking mileage on paper with odometer readings:

Date                             6/30/19
Starting mileage:           47,358
Ending mileage:            47,377
Trip mileage:                             19
Where and Why:          client, Jones, about Westfield job
Meals expense:           $37

You shouldn’t have any problems with this kind of record-keeping. You can also use this mileage and expense log to help record the details.

Apps for your phone are also excellent, and much easier for recording your mileage. If you use the GPS in your phone with the app, it can also track you location as you drive around. While these apps can track your mileage and do it well, they won’t necessarily give the odometer readings, purpose or amount spent, depending on your app.

No matter what, you need to keep good records in case of any audit or IRS review, and the more you travel or spend on meals, the more you need to have good records. If the IRS were to disallow these expenses, you could end up with a very hefty tax bill that they will be sure to add interest and penalties to as well.

Hopefully this helps you adequately prepare. Even though we are in the middle of the year, it is still a good time to make sure your records are adequate and accurate. Stay wise!

 

-Heritage Accounting and Tax Services
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Meals!

Here’s good news for business meals: the Tax Cuts and Jobs Act (TCJA) removed the “directly related and associated with” requirements from business meals. This means that business meals are once again subject to the “ordinary and necessary” business expense rules. You’re going to like these rules more than the old ones.

Restaurants and Bars

Question 1) If, for business reasons, you take a customer to a restaurant or a bar, but you do not discuss business, can you deduct the costs of the meals and drinks?

Answer 1) Yes. Even though you did not discuss the business, if the circumstances are generally considered conducive to a business discussion, you may deduct the expenses for meals and beverages to the extent they are ordinary and necessary expenses.

Question 2) What are circumstances conducive to a business discussion?

Answer 2) This depends on the facts, taking into account the surroundings in which the meals or beverages are furnished, your business, and your relationship to the person entertained. The surroundings should be such that there are no substantial distractions to the discussion.

Generally, a restaurant, a hotel dining room, or a similar place that does not involve distracting influences (i.e. sporting event or floor show) is considered conducive to a business discussion. On the other hand, business meals at nightclubs, sporting events, large cocktail parties and sizable social gatherings would not generally be conducive to a business discussion.

Meals Served in Your Home

Question 3) Does a business meal served in your home disqualify the deduction?

Answer 3) No, as long as you serve the food and beverages under circumstances conducive to a business discussion. But because you are in your home, the IRS adds that you must clearly show that the expenditure was commercially rather than socially motivated.

Goodwill Meals

Question 4) If, for goodwill purposes, you take a customer and his or her spouse to lunch and don’t discuss business, will the cost of the lunch become non-deductible?

Answer 4) Not if, in light of all facts and circumstances, the surroundings are considered conducive to a business discussion, and the expenses are ordinary and necessary expenses of carrying on the business rather than socially motivated expenses.

Question 5) Is the situation the same if the taxpayer’s spouse accompanies the taxpayer at a dinner for business goodwill reasons?

Answer 5) Yes, the meal is still deductible. This is true whether or not the customer’s spouse is present. Again, the meal must meet the ordinary and necessary business expense standards.

Document the Meal Deductions

You need to keep records that prove your business meals are ordinary and necessary business expenses. You can accomplish this by keeping the following:

  1. Receipts that show the purchases (food and drinks consumed)
  2. Proof of payment (credit card receipt/statement or canceled check)
  3. Note of the name of the person or persons with whom you had the meals
  4. Record of the business reason for the meal (a short note/description)

You still deduct half the cost of your business meals for tax purposes (as before the TCJA).

If you have any questions, need more information or need help with record-keeping, please get in touch with us!

 

Helping you stay informed,

-Heritage Accounting and Tax Services
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