RMDS ARE BACK: THE RISKS OF A LAST MINUTE WITHDRAW
By: Clients had a break in 2020, they didn’t have to take Required Minimum Distributions (“RMDs”) from their retirement accounts. The RMDs come not just from IRAs but 403(b) arrangements, Keogh plans, and other profit-sharing plans. Failure to take the distribution can lead to a 50% penalty on the missed amount. IRA custodians are required to either calculate the RMD for customers by assuming the uniform table applies to them or offering to calculate a personalized distribution amount. Those requirements do not apply if the IRA is inherited, however. In this eTax Alert, we’ll talk about the return of RMD withholding, …
PPP LOANS & COVID-19 RELIEF: WHAT THE IRS WANTS YOU TO KNOW
By: 
& Covid-19 threw several monkey wrenches into our everyday chaotic tax season. And the IRS wasn’t able to avoid getting hit, leading to a backlog of long delays, impacting tax refunds with no immediate solution as 2021 comes to a close. Speaking of the IRS, they finally addressed and issued guidance on some important topics impacting our clients: PPP Loans Federal Covid-19 Grant Tax-Free Income Recognition Expense Deductions S Corporation & Partnership Basis We’ll dig into the guidance, But first, let’s start with the high-level details you need to know. Note: The IRS released three new revenue procedures on the treatment …
BUILD BACK BETTER ACT: VOTE LIKELY TODAY AS BIDEN URGES ACTION
President Biden pushed The House to vote today on his historic Build Back Better (BBB) Act. During a speech today about U.S. economic recovery he asked every House member to vote yes on the bills tackling infrastructure, social spending, and tax measures. President Biden said, “Send the infrastructure bill to my desk, send the Build Back Better Act to the Senate.” Key Tax Provisions of the Revised Build Back Better Act Note: The revised draft legislation would include the following significant changes, effective January 1, 2022, unless otherwise noted: Individual Income Taxes Modified Adjusted Gross Income. Generate new surcharge on …
PRESIDENT BIDEN’S BUILD BACK BETTER ACT – WHAT’S IN AND WHAT’S OUT?
After almost two months of wrangling, cajoling, and threatening, the Democrats in the House and Senate, have almost agreed upon a cutdown version of the original $3.5 trillion “social spending and climate” plan. In September, the House Ways and Means Committee released its first try at the Build Back Better Act. On October 28, 2021, a second version costing a substantially reduced $1.75 trillion is in writing – all 1684 pages. The latest version of HR 5376, as reported by the Committee on the Budget, is here. A section-by-section summary of the October 28, 2021 version of the Build Back …
Risk Management in Two Steps: What Every CFO Needs to Know
“All Business is Risky Business” In 1983 Tom Cruz starred in the hit movie “Risky Business.” The reality is that all business is risky business. This is even more true today than almost 30 years ago. I once had a conversation with a senior manager for a specialty department store chain. I asked him what his number one priority would be for the last half of the year. He said, “minimize costs.” To that, my response was to lock the doors and walk away. That would only leave him with fixed costs. He responded that it was a stupid idea, …
Advanced Child Tax Credit Payments 2021: Should Your Client Opt-Out?
The IRS sent the first advanced monthly payment of the Child Tax Credit to roughly 35 million U.S. families with 60 million children on July 15. The first batch of payments totaling $15 billion paid as much as $300 per child. If your clients didn’t opt-out of the advanced monthly payments by August 2, they’re likely to get the August 13 and the September 15 payments. Should your client opt-out? Why Should my client OPT OUT? We need to get our talking points straight, because we may be hearing from many angry clients once the 2022 tax filing season begins. Clients …
FAQ Special: Advanced Child Tax Credit Payments
LISTEN NOW TO THE eTAX ALERTClick the Play Button to Listen for Free.https://youtu.be/W4ijdLs5XdE Should my client OPT OUT? Your clients probably have questions about opting out, payment timelines, and how much more they’ll receive. Before we dive into those topics, let your clients know August 2nd is the deadline to skip the August 13th payment.1. The client’s 2021 income will be above the thresholds ($75,000, $112,500, $150,000), and the client doesn’t want to repay the advance.2. Financial situation. “I don’t need the money. I’d rather have a bigger refund next April.”If it turns out your clients were overpaid or underpaid …
Advanced Child Tax Credit Payments: What to Know
LISTEN NOW TO THE eTAX ALERTClick the Play Button to Listen for Free.https://youtu.be/NO7cBlZPJtk TRANSCRIPT: ADVANCED CHILD TAX CREDIT PAYMENTS Sharon Kreider: Hi, I’m Sharon Kreider, CPA, and we’re here to talk about the child tax credit and particularly the advanced payments, which begin July 15th, 2021. First, a little background on the child tax credit. Background: We’ve had a child tax credit before, and it was expanded in prior legislation. This is another expansion of the child tax credit. It is from the American Rescue Plan Act, which was at the beginning of March 2021. And the credit for this expansion is presently …
Q&A Special: PPP LOAN UPDATES & CALIFORNIA’S TAX CONSEQUENCES
& Q&A Special: PPP LOANS & CALIFORNIA TAX CONFORMITY CONSEQUENCES What’s going on with second draw PPP Loans, and has California completely conformed to Federal Tax Law? Our new Q&A Special features Sharon Kreider and Karen Brosi explaining the consequences of California’s new conformity and PPP Loan Updates. California is among the 20 states that don’t have automatic conformity with Federal law Publicly traded companies aren’t allowed to take the deduction of expenses paid with loan proceeds LISTEN NOW TO THE Q&A SPECIAL Click the Play Button to Listen for Free. https://youtu.be/hF1sOHn2EVk Want More? Read the full transcript Sharon Kreider: …
Advisors – Tell Your Millionaire Clients to Prepare for Audits
Audits are coming. If you read in the middle of the night like me, you might have read a working paper from the National Bureau of Economic Research (NBER) on the tax paid by the top 1% of households. The top 1% of households failed to report 21% of their income with six points of that number due to strategies that were so sophisticated that even if that upper-income person’s tax return was randomly audited under the NRP audit, it didn’t detect them within six points of the 21%. WATCH NOW TO LEARN MORE Click the play button below to watch. https://youtu.be/3SJakLAdEPI …
Employee Retention Credit Essentials
Article Note: Many companies did not utilize the ERC because it couldn’t be used in concert with a Paycheck Protection Program (PPP) loan. The Consolidated Appropriations Act, 2021 (CAA) retroactively removed the mutual exclusivity between the two incentives. The CAA made the ERC now available for 2020 periods, and the American Rescue Plan (ARP) extended the ERC through 2021. Companies who cast aside the ERC for the PPP in 2020 should review past and current quarters for potential eligibility because the benefit can be a lifesaver. The Employee Retention Credit (ERC) is an incredibly valuable coronavirus relief measure that …
Pandemic Relief Fund for Restaurants Is Open – The Money Won’t Last
Article Note: The SBA began accepting Restaurant Revitalization applications on May 3. The Restaurant Revitalization Fund (RRF) is a first-come-first-serve program. The Paycheck Protection Program ends on May 31, 2021. Finally, April 15, I mean May 17, is almost behind us. We should get a breather for at least a few weeks. We should, but “no.” Our business clients have something else in mind as they wait impatiently for us to get back to their business. Two items loom: The Restaurant Revitalization Fund grant program and the (second draw) Paycheck Protection Program. The Paycheck Protection Program ends on May …
Q&A Special: Deadlines – Tax Increases – QBIs – 1031 Exchanges
Greetings. Can you see the light at the end of the tax season tunnel? Pushing forward, we are proud to present a new Q&A Special that’s timely and topical. Sharon Kreider of Western CPE interviews tax expert Doug Stives in this insightful Q&A discussion about the May 17 deadline, upcoming tax increases, QBI elimination, and 1031 exchanges. Doug Stives examines if the extensions were generous to the right groups, explores QBI elimination or simplification, and answers an interesting 1031 exchange question. LISTEN NOW TO THE Q&A SPECIAL Click the play button below to listen. https://youtu.be/qr2ATPBv91U Transcript: [Sharon] I’m Sharon Kreider and …
Q&A Special: American Rescue Act of 2021
By: Everyone wants more clarity and insight into the American Rescue Act ever since President Biden signed it into law late last week. Especially since the new stimulus payments went out and the IRS extended the filing deadline to May 17th. Sharon Kreider of Western CPE interviews tax expert Robert Keebler in this insightful Q&A discussion about the American Rescue Act. Robert Keebler delves into the impact on high-net-worth clients, the typical family of four, and the business-related tax ramifications. Listen Now to the Q&A Special Click the play button below to listen. https://youtu.be/JjxsPIFavbA Transcript: Sharon: Hi, I’m Sharon Kreider and …
Accounting Standards Updates Effective for the 2020 Calendar Year
By: Jeff Sailor, CPA
Article At A Glance: Due to the pandemic, last-minute delays were applied to the effective dates for the Accounting Standards 2014-09 Revenue from Contracts with Customers New updates change the classification of liability or equity financial instruments that include down round features. Topic 718 was expanded for stock compensation to include share-based payments for nonemployees’ goods and services. Updates were made to the Collections definition to align with the industry definition. Effective dates for 2016-02 Leases have been delayed to fiscal years beginning after December 15, 2021. Greetings and Happy New Year! As we all look with anticipation to …
Tax Season News for Individuals and their 2020 Tax Return
Article Note: The IRS is pushing back the beginning of the 2020 tax season to February 12. The IRS needs more time to prepare after the Covid-19 relief act that took effect in late December. And yes, as of now, the tax filing deadline is still April 15. To speed refunds during the pandemic, the IRS recommends that taxpayers submit their returns electronically and use direct deposit as soon as they’re ready. 1. Economic impact Round one and round two economic impact payments (EIP) are reconciled on the 2020 tax return. The EIPs were an advance. If the client received …
2nd Draw PPP Loans: SBA Explains Eligibility & Amount
Article At A Glance: The new Economic Aid Act signed into law on December 27, 2020, authorizes the SBA to guarantee PPP 2nd Draw Loans. A borrower is eligible for a Second Draw PPP Loan only if it has 300 or fewer employees and experienced a revenue reduction in 2020 relative to 2019. The borrower must have experienced a revenue reduction of 25% or greater in 2020 relative to 2019. Gross receipts do not include the forgiven amount of the First Draw PPP loan. Second draw loans are forgiven if the loan proceeds are spent on eligible payroll costs and …
FinCEN Tells Cryptocurrency Traders That It’s a New Year
Article At A Glance: FinCEN Notice 2020-2 announced cryptocurrency accounts held outside of the US as a reportable account for FBAR filings. The notice does not provide an effective date for the reporting change. Watch for further developments. Cryptocurrency exchanges make it simple to move from US dollars (or whatever) into a cryptocurrency and vice versa. New regulations will make cryptocurrency exchanges act more like banks. These regulations may signal that cryptocurrency’s wild west days are numbered. In Notice 2020-2, the Financial Crimes Enforcement Network (FinCEN) announced that the regulations implementing the Bank Secrecy Act (BSA) would be amended to add cryptocurrency …
9 IRS Reminders for Individuals & their 2020 Tax Returns
Article Note: IRS Resources: COVID Tax Tip 2025-172, Getting Ready for Taxes, Steps to Take Now to Get a Jump on Your Taxes Recovery Rebate The economic rebate received in 2020 was an advance. The advance needs to be reconciled on the 2020 tax If the client received less as an advance than he or she should have, they might be able to claim the recovery rebate credit on their 2020 return if one of the following applies to them: They didn’t receive an Economic Impact Payment in They are single, and their payment was less than $1,200. They …
The President Signed the Covid-19 Relief Bill & 2nd Round of Stimulus Checks Coming
Article at a Glance: President Trump has now signed the new Consolidated Appropriations Act, 2021 into law. The new law includes a second round of recovery stimulus payments for individuals. Individuals and children (under age 17) are entitled to a $600 rebate if income is below a threshold amount. The phaseout thresholds are the same as those in the CARES Act for the first round of payments. The income thresholds are based on the AGI shown on the 2019 tax return. The recovery rebate payments should start to come about mid-January. This second round of recovery rebates will be …