Updates
Friday, 30th October 2020
Even if you've never done an end-of-year tax planning meeting, you may want to this year due to COVID-19, the four tax bills passed since December 2019, and the complexity of the IRS withholding calculator which may have resulted in gross under or over payment. If you took out a PPP loan, it's imperative to plan your loan forgiveness amount.
Don't forget: California assesses a shared responsibility penalty for not having health insurance. There is a premium credit for low and middle income taxpayers that may create a refund or balance due.
Tuesday, 8th September, 2020
IRS 
Notice 2020-65 provides guidance on the Presidential Memorandum to defer Q4 2020 employee payroll tax withholding and payment to Q1 2021. This deferment is optional, and because it currently appears the taxes won't be forgiven, this means employers must withhold and pay the deferred taxes with Q1 payrolls. Most sources at this point recommend NOT participating in the deferral and continuing to withhold and pay the taxes as usual.
PPP Forgiveness Applications are reaching their final versions. If you received a PPP loan, watch for the applications from your lenders. In the meantime, organize your information. You will need payroll amounts and hours for different periods as well as expenses during your covered period. The SBA has all versions of the application here on its website, and they list the information you will need.
Monday, 30th March, 2020
The Coronavirus Aid, Relief and Economic Security Act (CARES Act) includes stimulus payments of $1,200 for each individual and $500 for each dependent child, defined by the child tax credit rules as under age 17.
Individuals with adjusted gross income (AGI) up to $75,000 a year are eligible for the full $1,200 payment. It is reduced by $5 for every $100 in income above $75,000, and is entirely phased out at an AGI of $99,000.
Married filing joint couples with AGI up to $150,000 a year are eligible for a $2,400 payment. The payment is reduced by $5 for every $100 in income above $150,000, and is entirely phased out at an AGI of $198,000. Married couples will also receive an additional $500 for every dependent child under 17.
Head of Household filers with AGI up to $112,500 a year are eligible for the full $1,200 payment and additional $500 for each dependent child under age 17. The payment is reduced by $5 for every $100 in income above $112,500 and is completely phased out at an AGI of $137,000. With one eligible dependent child, a head of household is entirely phased out at an AGI of $146,400.
The IRS will deposit the calculated amount directly into your bank account, or mail a check if there is no bank information on your return, using the AGI and bank information on your 2019 tax return. If your 2019 return hasn't been filed, they will use your 2018 tax return. These payments should be made in about six to eight weeks.
Your 2020 Tax Return: the stimulus rebate is a 2020 refundable tax credit, and the payment received in the next few weeks is an IRS advance on that credit. If your 2020 income is less than 2019 because of layoffs, reduced hours and closed businesses, and your rebate payment was reduced by the income threshold, you'll receive a credit for the difference on your 2020 return. If for some reason, you receive too much of an advanced payment, you don't have to pay back the excess.
Non-Filers: if you did not meet the filing threshold for 2018, you may still be eligible to receive an economic impact payment. See the IRS page for more information.
FRANCHISE TAX BOARD
The FTB has likewise implemented tax relief. Please see their FAQ Page for information and links to specific information.
SMALL BUSINESS RELIEF
Small business owners can apply for payroll protection or EIDL loans modified for COVID-19 relief. Go the the SBA's Corona Virus Relief Page for information and links.
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