IRS Issues Guidance on Employee Retention Credit, Including PPP Eligibility Rules
Mar 03,2021
On March 1, 2021, the IRS published new guidance for employers who will be claiming the Employee Retention Credit (ERC) for 2020 calendar quarters. The notice provides much needed clarity on the retroactive changes under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, including details on how employers who have already received PPP loan forgiveness can claim the employee retention credit for 2020. The new guidance, which is similar to the previously issued IRS FAQs, also addresses a few outstanding questions about eligibility, qualified wages and the suspension tests. General answers to those questions before the issuance of this new guidance can be found in this Smith & Howard article. The IRS has also promised forthcoming guidance on the 2021 expanded employee retention credits. For more information or help, please contact your Smith & Howard tax advisor or complete the form below.
Information about CP59 Notices Sent by the IRS
Mar 03,2021
Each year, the Internal Revenue Service (IRS) sends CP59 notices to taxpayers who have not filed their returns for the previous year. If you filed your 2019 tax return but recently received this notice, the IRS says you can safely disregard it and do not need to take any action. As a result of delays caused by the COVID-19 pandemic, not all 2019 tax returns have been processed. This caused the notices to be mistakenly sent in February to taxpayers who had filed their 2019 returns but whose returns have not yet been processed. You may have been sent this notice regardless of when and how you filed your 2019 taxes. As long as your 2019 return has been filed, you do not need to respond to the CP59 notice. If Smith & Howard handled your preparation and filing for you, we will be able to confirm that there is...
Tax Benefits for Individuals Included in the Consolidated Appropriations Act
Feb 19,2021
The Consolidated Appropriations Act, 2021 (CAA) extended several provisions for tax relief for individuals. Most of these provisions were introduced by the CARES Act in March 2020 to help both individuals and businesses affected by the COVID-19 pandemic. This article looks at the tax benefits individuals should consider as they file their 2020 tax returns. Charitable Deductions Two provisions from the CARES Act affecting charitable deductions were extended and modified through 2021 by the CAA: Individual donors who make cash contributions to qualifying public charities in 2021 can once again choose to deduct up to 100% (previously 60%) of their adjusted gross income (AGI). Contributions to a supporting organization, a donor advised fund and most private foundations will not qualify for this provision. The CAA modified the amount non-itemizing taxpayers can claim as an above-the-line charitable tax deduction and also increased a related penalty: Married taxpayers who file jointly can...
IRS Further Extends Qualified Opportunity Zone Deadlines
Jan 22,2021
On January 19, 2021, the Internal Revenue Service issued Notice 2021-10, further extending tax deadlines for Qualified Opportunity Funds (QOFs) and investors affected by the ongoing COVID-19 pandemic. The IRS had previously extended these deadlines in June 2020. The following information outlines new deadlines for taxpayers who have invested in Qualified Opportunity Zones (QOZs). 180-Day Investment Period Ordinarily, any capital gains realized from a QOF are expected to be reinvested by taxpayers within 180 days of that sale or exchange. Last June, the IRS extended that 180-day investment period deadline to December 31, 2020. The deadline has now been extended to March 31, 2021, if the last day of the 180-day investment falls before March 31, 2021. This extension for investing gains and qualifying for the program’s tax benefits is automatic, but taxpayers still need to make a valid deferral election. 30-Month Substantial Improvement Period for QOFs Under the new...
Consolidated Appropriations Act, 2021 Offers Expanded Employee Retention Credit and Introduces PPP2
Jan 06,2021
On December 27, 2020, the Consolidated Appropriations Act, 2021 for COVID-19 relief was signed into law by the president. Two items of particular importance for businesses are the expansion of the Employee Retention Credit (ERC) and additional Paycheck Protection Program loans (PPP2). Expansion of the Employee Retention Credit (ERC) The CARES Act introduced the ERC with the aim of providing eligible employers with a refundable tax credit. A qualifying business is one whose: 1.  operations were fully or partially suspended due to orders from a government authority limiting commerce, travel or group meetings due to COVID-19. or 2.  gross receipts for any quarter in 2020 were less than 50% of its gross receipts for the corresponding quarter in 2019. Businesses can continue to take the credit each quarter until gross receipts are 80% of the gross receipts in the same quarter of 2019. Fifty percent of up to $10,000 in qualified...
Watch Out for These Business Registration Scams
Dec 18,2020
As we begin a new year and business licenses or certifications are up for renewal, there are several scams that business owners should be aware of. The scams are designed to intimidate businesses into paying unnecessary fees by using words like “Time Sensitive”, “Important” or “Open Immediately” to convey a sense of urgency. These scams may suggest that business owners’ registrations or certifications are invalid or have lapsed and are at risk of being taken away. One company, calling itself “CFS” (“Compliance Filing Services”, “Corporate Filing Services” or “Certificate Filing Services” are some of the names used), has sent annual registration notices to taxpayers in Georgia. These fake notices warn of penalties and fines for missing a renewal deadline, even though renewal is not due until April 1. The company offers to handle the renewal of a business’s registration for $150 when the actual fee is only $50. In 2020,...
Smith & Howard Named a 2021 Best Tax and Accounting Firm in America by Forbes
Dec 09,2020
Smith & Howard is proud to be named one of America’s Best Tax and Accounting Firms for 2021 by Forbes. This is the second consecutive year Forbes has announced a list of the most recommended firms for tax and accounting services in the nation. The publication partnered with market research company Statista to create the list, which is based on surveys of tax and accounting professionals and their clients. Forbes said that of the 278 firms identified, 250 were recommended for tax and 200 for accounting. 172 were recommended for both tax and accounting services. “Being one of the select firms recommended for our tax and accounting services is an immense honor for us, because this recognition comes from our clients and peers,” said Sean C. Taylor, Managing Partner at Smith & Howard. “It is both humbling and exciting to be recognized nationally as a best firm.” Statista said it...
2020 Year-End Tax Planning for Individuals
Dec 08,2020
As the year-end approaches, individuals, business owners and family offices should be reviewing their situations to identify any opportunities for reducing, deferring or accelerating tax obligations. Areas that should be looked at in particular include tax reform provisions that remain in play, as well as new opportunities and relief granted earlier in 2020 under the CARES and SECURE Acts. This article highlights specific areas and provides preliminary inflationary adjustment items for 2021 as of October 15, 2020, compared to current 2020 amounts, to aid taxpayers as they plan deferrals and accelerations before year-end (anticipated inflationary adjustments provided by Thomson Reuters Checkpoint and Bloomberg Tax & Accounting are used; official numbers have not yet been published by the IRS, but are expected to be made available later in 2020). A discussion about 2020 year-end tax planning likely should involve a discussion about the U.S. presidential election. To date, neither candidate has...
Tax Relief Strategies for Resilience
Dec 08,2020
As the world continues to contend with the COVID-19 pandemic and its economic fallout, businesses are doing all they can to mitigate risks and plan for a recovery that’s anything but certain. The path forward will likely not be linear. Different regions, industries and business segments may be in different stages of recovery simultaneously. The tax function plays a critical role in navigating recovery and positioning businesses to emerge from this crisis more resilient than before. Effective tax strategy can preserve liquidity, lower costs and work in tandem with overall business strategy. Read on to explore the tax relief tactics that can help take your business from reacting to the day-to-day challenges to preparing for the future. Finding Relief: Tax Strategies to Generate Immediate Cash Flow During “the dip” immediately following a crisis, businesses of all sizes are in triage mode, taking immediate action to both protect their employees and keep the...
Keys to Year-End Tax Savings for Businesses
Dec 07,2020
2020 has been an unpredictable year. Businesses have faced all-encompassing challenges ranging from protecting employee health and safety to managing unexpected costs to dealing with severe fluctuations in supply and demand for products and services. Some businesses were able to enter new markets and achieve fresh levels of growth, while others had to make tough choices just to endure. The outlook for 2021 is uncertain. While COVID-19 continues to surge through the U.S., a new administration is preparing to take office, and control of the Senate—which will have major implications for the future of tax reform—remains undecided. In this environment, many businesses are left wondering which strategies will be effective to help lower their tax liability and increase savings. Regardless of which stage of recovery your business is in, or what is on the horizon, consider whether any of the year-end tax strategies outlined below could help your business start off 2021...

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