Western CPE Blog
Breaking tax and accounting news and analysis from the experts at Western CPE.
New Payroll Tax Deferral
By: Article at a Glance: Trump’s executive orders call for a payroll tax deferral from Sep. 1 – Dec. 31, 2020 The Order suspends the collection of 6.2% Social Security tax through Dec. 31, but this is a deferral, not a forgiveness Relief only applies to those with a biweekly pre-tax income of less than $4,000 Unemployed or furloughed receive no benefit September 1st is the First Day of Payroll Tax Deferral, and the IRS is Here To Help with Notice 2020-65 On August 8, 2020, President Trump issued a Presidential Memorandum to the Department of Treasury to allow for …
IRS Releases Draft of Form 1040
Article at a Glance: The IRS released a draft of Form 1040 for the 2020 tax year The Form is not postcard-sized Virtual currency has a new position The CARES Act changed the reference point of Charitable contributions There will be a separate reconciliation schedule for Stimulus Checks – no instructions yet The amount you owe may be more complicated due to line 37(new for 2020) The IRS released the draft of the 2020 Form 1040. It still doesn’t look like the Form 1040 in “the good old days.” And it’s still not (and it not likely to ever …
News on IRS Operations During Covid-19
Article at a Glance: Remote Work & Slowdowns | During a painful tax season, we shouldered our load, helped with PPP and EIDL Loan applications. Budget Cuts & Covid-19 | The IRS experienced the same painful tax season but didn’t get all their work done. Billing Notices & 20 Million Letters | To save money, the IRS didn’t reprint notices with correct dates; instead, they “inserted” in with billing. Billing Amounts are Wrong | Try to convince your client to hold fast and not to cancel their payment and rewrite a check. Lien Releases | The IRS is processing all lien certificate applications normally …
President Trump Orders a Payroll Tax Deferral
Article at a Glance: Deferring Certain Payroll Tax Obligations paid from Sep 1, 2020 – Dec 31, 2020. The relief only applies to people working and collecting a paycheck The relief is temporary since the taxes must still be paid Major changes to the tax code fall entirely to Congress, so President Trump alone cannot waive Americans’ tax debts or enact permanent tax law changes. A payroll tax cut might create a “public relations problem” because of the potential hurt to Social Security funds On Saturday, President Trump directed the Secretary of the Treasury to defer the withholding, …
New PPP Loan Forgiveness FAQs
Article at a Glance: In consultation with Treasury, the SBA released guidance Tuesday, answering 23 frequently asked questions regarding the forgiveness of Paycheck Protection Program loans. This eTax alert focuses on one topic. What’s included in compensation for the owners of various entities? C Corporations S Corporations Self-employed Schedule C (or Schedule F) filers General Partners LLC Owners SBA has issued more than 5 million PPP loans. We helped with lots of the loan applications, and soon we will be asked to help with the forgiveness applications —we have a lot of work to do because many of the …
Guest Post: Electronic Receipt of Invoices: New Best Practice
By: Mary S. Schaeffer, MBA, has the inimitable ability to find accounts-payable-related solutions that really work—without making a major dent in the bottom line. For Western CPE, she produces self-study courses and webcasts. She has a BS in mathematics from York College (CUNY) and an MBA in finance from New York University Article at a Glance: Covid-19 has forced organizations to analyze their internal processes and develop flexible capabilities. 27% of all invoices are received in physical form using the post. As remote work increases account payable departments are finding it essential to receive invoice through electronic means. Data …
Guest Post: Two New Audit Standards Issued
By: Jeff Sailor, CPA
Jeff Sailor, CPA, received a master’s degree in accounting from the University of Florida. Jeff has managed his accounting firm in Ocala, Florida since 1984. During that time, he has also developed unique auditing approaches and auditing software. Since 1992, Jeff has been teaching accounting and auditing courses he developed to combat traditional “boring CPE.” Article at a Glance: Auditing Standards Board has just issued two new audit standards. SAS 142, Audit Evidence supersedes the existing requirements in AU-C Section 500. The new concept of audit evidence now requires the auditor to consider the “attributes” of the information being used …
Guest Post: PPP Loan Forgiveness Problems
By: Kurt Oestriecher
Article at a Glance: Some programs, particularly the PPP Loan program, continue to have problems. Original concept of PPP Loan was simple. Congress considered the concept too simple, and added a provision period. The SBA issued conflicting guidance in the Interim Final Rules and subsequent revisions. Borrowers and banks will have to rely heavily on the CPA profession to guide them through the forgiveness process. Kurt G. Oestriecher is the partner in charge of accounting and auditing services with Oestriecher & Company of Alexandria, Louisiana, and has been with the firm since graduating from Northeast Louisiana University in 1986. …
Guest Post: Major Changes to the CPA Exam
Article at a Glance: New threats to CPA licensing posed in 2020 legislative year. Possible CPA Licensure Model. CPA Exam moves to ‘continuous testing’ model. Proposed CPA Exam Material. No plan for changes to 16-hour, the four-section structure of the exam. Rod Redding received his Ph.D. from Penn State University after working with Price Waterhouse and IBM. Currently, he presents seminars and webcasts and prepares self-study courses for Western CPE. A few things related to the CPA profession: threats to licensing, possible changes to the CPA licensing model, continuous CPA exam testing and how the CPA exam content might change New threats to CPA …
Another Change to the PPP Loan
Article at a Glance: 48 changes to the Paycheck Protection Program (PPP) Loan provisions in the CARES Act. PPP Loan provision expired on June 30, 2020. SBA reported that the second round of funding resulted in an average loan size of $113,000. The Paycheck Protection Plan Extension Act. 3.7 million (85%) of loans approved by SBA are $150,000 or less. There have been 48 changes to the Paycheck Protection Program (PPP) Loan provision in the CARES Act. The changes included: The Paycheck Protection Program Flexibility Act, IRS FAQs, Interim Final Rules, Revised Interim Final Rules, and new application forms …
More Tax News from the IRS
Article at a Glance: Economic Impact Payment Notice. Early bird RMDs. COVID-19 IRA retirement plan withdrawals. Qualified Opportunity Fund investment delay. The IRS has been busy with lots of news items. Here are a few items of interest for you and your clients. Economic Impact Payment notice. Remind your clients to keep Notice 1444 — “Your Economic Impact Payment”. Your clients may not know this is an important document. They will need the Notice if they qualify for a larger Impact Payment when they file their 2020 tax return. The client may be entitled to a bit more rebate …
Tax News Galore
Article at a Glance:June 30, 2020 Deadline.20 million backlogged notices.Millions of unopened pieces of mail.IRS will pay interest on 2019 refunds issued after April 15. In the last week, the IRS has been busy with “news” for you and your clients: June 30, 2020 Deadline. Only a few days are left.There is still money left for a Paycheck Protection Program Loan, but the PPP loan program shuts down on June 30, 2020. It’s a rush, but maybe the struggling small business person can get funds to keep afloat for a few more months. If your client can’t make the June 30th deadline, …
PPP Loans Forgiveness — Applications, Clarifications, and Examples
Article at a Glance:PPP Loan Forgiveness Clarified in a Revised Interim Final RuleSafe Harbor Added for Reductions in FTEsMaturity Date of Loan ExtendedDeferral Period for Borrower Payments ExtendedEmployer Payroll Tax Deferral ExpandedPPP Loans Forgiveness — Applications, Clarifications, and Examples Forgiveness Applications Revised and Simplified SBA released a new EZ version of the forgiveness application (Form 3508EZ). The EZ application requires fewer calculations and less documentation and will ease the paperwork for small business owners and the practitioners that help them. The EZ can be used by borrowers who: Are self-employed and have no employees; OR Did not reduce the salaries …
Guest Post: A Quick Look at the Sections of the AICPA Auditing Standards Board Auditor’s Report
Dr. Rod Redding received his PhD from Penn State University after working with Price Waterhouse and IBM. Presently, he presents seminars and webcasts and prepares self-study courses for Western CPE. To read more about Rod or see his coursework, check here . In May 2019, the Auditing Standards Board (ASB) issued SAS 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements. Over 2019 and 2020, the ASB issued SAS 135 – SAS 141 which all relate to the Auditor’s Report and are designed to go with SAS 134 as a suite of standards. The standards are …
Guest Post: Audit Risks and Audit Areas to Focus on Due to the Coronavirus
Dr. Rod Redding received his PhD from Penn State University after working with Price Waterhouse and IBM. Presently, he presents seminars and webcasts and prepares self-study courses for Western CPE. The Journal of Accountancy has published two articles that may help you prepare your audits for the effects of the coronavirus, on how the audit is performed. Highlights from these two articles are presented in this alert. 4 key COVID-19 audit risks for 2020 year ends, J of A, June 5, 2020 Four risk areas for auditors to consider as they prepare for their next audits of commercial entities: Internal …
Guest Post: How to Account for PPP Loans
By: Jeff Sailor, CPA
Have you taken a class from Jeff Sailor? He’s one of our favorites and one of the funniest. For more than 10 years, Jeff has served as an AICPA peer reviewer, focusing on small firms and sole practitioners. Jeff has managed his own accounting firm in Ocala, Florida, since 1984. During that time, he has also developed unique auditing approaches and auditing software. To read more about Jeff or see his coursework, check here. How to Account for PPP Loans As many of you have been working very diligently to assist your clients with both acquisitions as well as forgiveness of the …
PPP Loan Forgiveness Clarified — Again
It happened again. New law on Paycheck Protection Program forgiveness was signed by the President on June 5, 2020, and a correction showed up three days later. On June 8, 2020, Treasury Secretary Mnuchin and SBA Administrator Carranza issued a joint statement that clarified (or maybe corrected) a forgiveness provision in the Paycheck Protection Program Forgiveness Flexibility Act (HR 7010). 60% Spent on Payroll Clarified Earlier in the year, Treasury and SBA issued an interim final rule that required borrowers to spend at least 75% of the PPP loan proceeds on payroll. HR 7010 reduced the payroll spending requirement to …
Is Congress Entering Accounting & Auditing Territory?
Dr. Rod Redding received his PhD from Penn State University after working with Price Waterhouse and IBM. Presently, he presents seminars and webcasts and prepares self-study courses for Western CPE. During 2019 and 2020 Congress appears to have an increasing interest in accounting and auditing. The Current Expected Credit Loss accounting standard and the PCAOB have been the primary targets of Congressional actions. Let’s take a look at some of the bills and other actions. CECL In the Senate: “Continued Encouragement for Consumer Lending Act” and in the House: “CECL Consumer Impact and Study Bill of 2019” These bills were …
Payroll Protection Program Loan Forgiveness Changed
In a rare bipartisan effort with only one no vote by Rep. Chip Roy (R-Texas), Congress made changes to the Paycheck Protection Program (PPP) Loan Forgiveness. The Paycheck Protection Program Flexibility Act of 2020 (HR 7010) modifies several provisions of the Paycheck Protection Program (PPP) and amends the Small Business Act and the CARES Act related to: “Covered period” period for loans Payroll spending requirements Deferral of employer payroll taxes FTEs and salary reduction Loan payoff due date See the whole article here. Payroll Protection Program Loan Forgiveness Change Passed by Congress In a rare bipartisan effort with only one …
Guest Post: Rod Redding, Some Places to Look for Assistance in Accounting for the Coronavirus
Dr. Rod Redding received his PhD from Penn State University after working with Price Waterhouse and IBM. Presently, he presents seminars and webcasts and prepares self-study courses for Western CPE. This alert provides accounting websites, and a list of articles, that have been written about various issues related to the impact of the coronavirus on accounting issues. Of course, one of the key issues is going concern. A future alert will address this issue. The following articles are hyperlinked for your convenience. WEBSITES AICPA: Coronavirus (COVID-19) Resource Center AICPA: Coronavirus (COVID-19) audit and accounting resources A&A FAQs related to COVID-19 …