Leah’s Accounting & Business Solutions Facebook Feed
*** Worry Free Wednesday ***
Construction Industry Audits
The IRS has updated a guide for examining the construction industry with a big focuse on accounting methods. Agents auditing construction companies are looking to ensure that companies are properly reporting income from long term contracts.
Agents are also focusing on unreported income and improper deductions. If you are operating a construction business and have questions about how to properly record income and expenses, contact our office we are happy to offer guidance and recommended bookkeeping practices.
*** Tax Tip Tuesday ***
American Rescue Plan Affect on 2021 Taxes
For 2021 only, the earned income credit has been expanded to more workers without qualifying children. This is a fully refundable tax benefit that helps low and moderate income workers. For the first time, there is no age limit cap on claiming the Earned Income Credit.
For 2021, EITC is available to filers without qualifying children who are at least 19 years old with earned income belwe $21,430; $27,380 for spouses filing a joint return. The maximum EITC with no qualifying children is $1,502.
Effective for tax years 2020 and 2021 individuals can use their 2019 Earned Income if it was higher than the current year, to calculate claiming the earned income credit. In some instances this could provide a larger refundable credit.
*** Worry Free Wednesday ***
Amended Returns
Amended income tax returns can now be electronically filed in most situations. If filing an amended return reflects a different social security number or filing status, it must be filed on paper.
It can take up to 16 weeks for an Amended return to be processed by the IRS. In the Post-COVID world, this timeframe has been significantly increased to 24 to 36 weeks.
You generally have 3 years from the date you filed your original return to amend or claim a refund. If amending for multiple years, each amended return must be filed on their own 1040X.
*** Tax Tip Tuesday ***
American Rescue Plan Affect on 2021 Taxes
Child and dependent care credit is increased for 2021 only. Eligible taxpayers can claim qualifying employment related expenses up to $8,000 for one qualifying individual (up from $3,000) or $16,000 for two or more qualifying individuals (up from $6,000).
The credit is fully refundable for the first time in 2021. This means that the taxpayer can receive it, even if they own no federal income tax.
*** Worry Free Wednesday ***
Working College Grads
Just graduated and looking to work this summer? Talk to your employer about using part-year withholding to have less taxes withheld. Most payroll programs assume that you will have a full year of income, and these figures are used to calculate the tax liability and withholding from payroll. Select the part year method, and your withholding will be according to what you earn during the part of the year you are actually working, instead of the full year.
Most students, high-school and college, who choose to work during the summer are exempt from income tax withholding. If you fall in this category, you can simply write "Exempt" on your W4 submitted to your employer and no taxes will be withheld
If you have any questions if you are exempt, or how much should you withhold, feel free to contact our offices, we are happy to assist with estimating tax liabilities.
*** Tax Tip Tuesday ***
Taxpayers assistance on paying the right amount of tax
Federal taxes are considered a pay as you go. This means that as you are making income, you should be making payments on the tax liability that will be due when filing tax returns for the year. This can be done through employee withholding, or estimated tax payments on a quarterly basis.
Taxpayers can use the IRS Tax Withholding Estimator to decide if they should make estimated payments, increase or decrease their withholding from wages. If you need assistance or have more complex situations, contact our office, we are always happy to help with Tax Planning.
www.irs.gov/individuals/tax-withholding-estimator
Tax Withholding Estimator | Internal Revenue Service
www.irs.gov
Check your tax withholding with the IRS Tax Withholding Estimator, a tool that helps ensure you have the right amount of tax withheld from your paycheck.Good morning! Happy first day of June! I keep asking myself how did that happen?
We made it through tax season, and now we are busy playing the catch up game on everything around the office. The plan is to start up Tax Tip Tuesday's and Worry Free Wednesday's again next week!
Thank you for all the support! It's you that makes this small business thrive!
Even on Vacation we get updates.....A few more changes that were implemented with the passing of The American Rescue Plan Act of 2021:
IRS suspends requirement to repay excess advance payments of the 2020 Premium Tax Credit
Taxpayers with excess advance payments of the Premium Tax Credit (excess APTC) for 2020 are not required to file Form 8962, Premium Tax Credit, or report an excess APTC repayment on their 2020 Form 1040 or Form 1040-SR, Schedule 2, Line 2, when they file. The American Rescue Plan Act of 2021 suspends the requirement that taxpayers increase their tax liability by all or a portion of their excess advance payments of the Premium Tax Credit (PTC) for tax year 2020. The process remains unchanged for taxpayers claiming a net PTC for 2020. They must file Form 8962 when they file their 2020 tax return. Taxpayers who have already filed their 2020 tax return and who have excess APTC for 2020 don’t need to file an amended tax return or contact the IRS. The IRS will reduce the excess APTC repayment amount to zero with no further action needed by the taxpayer.
*** Tax Tip Tuesday ***
Unclaimed 2017 Tax Refunds. The IRS has announced they have an estimated 1.3. million taxpayers that did not file a 2017 Form 1040 Individual Income Tax Return and are due a refund.
If you fall in this category, here are the key points you need to know:
* In order to collect the refunds, you must file your return by this year's tax deadline, May 17th.
* The law requires taxpayers to properly address and mail the tax return to the IRS. It must be postmarked by the May deadline.
* The IRS may hold the 2017 refunds of taxpayers who have not filed tax returns for 2018 and 2019.
* Taxpayers who are missing forms W2, 1098, 1099 or 5498 for the 2017 tax year should request copies from their employer, bank or other payer. If they are unable to get the forms from those outsources, they can order a free wage and income transcript from the IRS online.
If you need help with any of these processes, please feel free to contact our office, we are always happy to help!
We have been a little quiet the last couple weeks. Have our noses to the grindstone around here!
Just announced by the IRS - they will be taking the steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation. Once this is completed, it is up to the taxpayer to determine if they return then needs to be amended to receive any additional federal credits and deductions not already included on the original tax return.
If you fall into that category...give our office a call, we are happy to help.
Changes every second of every day around here.....Just in.....
Idaho’s income tax, property tax relief applications deadlines extended to May 17
Mar 25, 2021 03:13 am
BOISE, IDAHO — March 25, 2021 — The Idaho State Tax Commission voted today to extend the 2020 Idaho income tax filing and payment deadlines from April 15, 2021, to May 17, 2021, to match the federal extended deadline.
The extension applies to all taxpayers subject to Idaho’s individual income tax (i.e., individuals, trusts, and estates), regardless of the amount owed. Penalty and interest won’t apply if taxpayers file their return and pay the income tax they owe by May 17.
What does this mean for my clients.....? NOTHING is changing. I am still focused on getting you completed or on extension by April 15th. I need a vacation like no other right now!!!!!
It has been crazy busy around here this week, so we didn’t get our normal postings out. For the local people we did get this out in the paper!!! ❤️❤️❤️❤️ our shop dog!
IRS to Handle Unemployment Returns, Don't Amend
Returns filed with unemployment benefits prior to the $10,200 exclusion should not be amended. The IRS has indicated it will refigure taxes on these returns and adjust the taxpayer's account accordingly. The IRS will then send any refund amount directly to the taxpayer.
The IRS has not yet communicated a timeline for making adjustments and sending refunds.
States are still making decisions on whether to follow....As of my last update, Idaho will be taxing the unemployment, but this could change.....
American Rscue Plan Act 2021
The IRS urges taxpayers not to file amended returns related to the new legislative provisions or take other unnecessary steps at this time.
The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021.
Additional information will be made available as soon as possible about:
Unemployment (IRS emphasizes not filing amended returns, until it issues additional guidance)
New round of Economic Impact Payments
Child Tax Credit, including advance payments
Other tax provisions
Our offices will be closing early today for a long weekend, returning next Tuesday. The question is why would we close during the busy season....? For Puppies!!!!!! We will be traveling to pick up the new addition to our office/family! Potato and Chip are all packed and ready to pick up Salsa!
Okay, so my new motto is “I know nothing”.....why...because things are changing so rapidly I can’t seem to keep up.....
Just released today, the deadline to file AND pay federal taxes has been automatically extended to May 17, 2021. We are to hold tight as the IRS will provide formal guidance in the next few days.
What does that mean for all my clients....NOTHING! 🥰🤣😬
The reality is this....I have worked hard since everything changed in the last year, and Wendy and I will still be taking our scheduled time off. We are still closing the office April 15th at noon, and running away for the weekend. Wendy will still return to the office on April 19th and continue working. I on the other hand am taking a MUCH needed vacation and getting away from it all! I will be back in the office May 6th....we plan on getting as much completed before we leave, and we will work just as hard when we return.
We are happy to file extensions and we can deal with it all later.
*** Unemployment Income 2020 ***
With the passing of the American Rescue Plan the new provision that $10,200 of unemployment benefits received in 2020 are exempt from federal taxable income is going to affect a TON of people that have already filed returns. If you fall into this category, just HANG IN THERE! It has not yet been determined or released as to how the IRS will rectify the confusion and chaos.
For individuals filing tax returns from today forward, this will automatically apply for Federal income, but States have NOT yet decided if they are following suit. There may be a delay between state and federal filing as states begin to make decisions on how to address/accept and work with the significant changes being made in the middle of tax season.
This has been an extremely tough year for a multitude of industries...so remember be kind to each other as we continue to wade through the BS 🙂
*** Worry Free Wednesday ***
Paycheck Protection Program (PPP) - Not taxable income
The debt forgiveness is not taxable, and businesses can deduct expenses paid for with forgiven loan amounts.
Typically cancellation of debt is considered a taxable event. Congress has provided an exception for businesses that took out the PPP loan offered with the Cares ACT. State taxation is not as clear cut and is contingent upon the state determination. Not all states have decided, even though we are in the middle of tax season. Many states do follow federal law, however there are some that do not. Be sure to check the laws in the state you are required to file tax returns.
*** Tax Tip Tuesday ***
Energy-Saving Home Improvements
Tax Credits have been extended through 2021. The credit remains at 10%, with a $500 maximum. Any credits taken in prior years will count against the $500. Individual's can claim up to $150 for water heaters, and furnances and $200 for windows and skylights
If you plan on returning to our office this year for the 2020 tax year, I have some important deadlines for you to keep in mind.
We are closing the office this year at 12pm on Thursday, April 15th so that Wendy and I can take long weekend after this grueling tax year! What does this mean for you…..? In order to provide enough time for us to accurately prepare your Individual Income Tax Returns we are asking that you have all of your information into our office by Thursday, April 1st. If we receive your information after this date, we will do our best to get it completed in a timely manner, but do not guarantee completing your return without filing a 6-month extension. If you want to file an extension and you know this is your plan for the year, please let me know as soon as possible so we can get it filed.
April is also the month that quarterly reports are due for all business clients, so the first two weeks around here will be a little hectic. Wendy will be returning to the office on Monday, April 19th after our extended weekend, I will not be returning to full days until after Wednesday, May 5th. Rest assured for our monthly clients, we will have all of your quarterly reports filed, and I will be checking in remotely to ensure everything gets out accordingly.
Please let me know if you have any questions and contact us as soon as you can for an appointment or drop off time!
*** Tax Tip Tuesday ***
Don't wait till the last minute to bring your taxes in! We are still accepting appointments, so call to get in, or if you are are a returning client, just drop your information off so we can get started!
Deadline Quickly Approaching!
March 15th is the deadline for Partnerships filing Form 1065, S Corporations and LLC's that have elected to be viewed as an S Corporation.
If you don't have all of your information together yet, contact our office and we can file a 6 month extension for you!
*** Worry Free Wednesday ***
Standard Deduction vs Itemized Deductions
Deductions reduce the amount of taxable income when filing a federal income tax return, resulting in a reduction of the amount of tax a taxpayer owes.
The Standard Deduction adjusts annually and varies based on your filing status, age and if they can be claimed as a dependent or not. A taxpayer benefits from the standard deduction when it is more than the allowable itemized deduction.
Itemized Deductions are a compiliation of medical expenses (based on a % of AGI), interest and taxes paid on their home mortgage, uninsured casualty or theft losses and large contributions. There are limits on some of these deductions.
For the 2020 tax year, cash donations up to $300 are deductible without having to itemize.
*** Tax Tip Tuesday ***
Self Employed May Qualify for Sick Leave Credits
Are you a self-employed small business that had to take time off in 2020 due to COVID19?
The Families First Coronavirus Response Act was intended to help by providing small employers refundable tax credits that would reimburse them dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.
Of course there are forms and requirements that need to be met to determine eligibility. Contact our office for an appointment, we are always happy to help!
*** Worry Free Wednesday ***
Client Refund's - Better have Proof
If refunding income to customers, make sure you have proof. A ledger simply tracking the refund is not enough and will not hold up for an IRS audit. It is highly recommended you reimburse customer's with transactions that either post to your bank account, or through the credit card it was originally charged to.
Third party merchants issue 1099K's at the end of the year to the IRS and to the small businesses utilizing their services for processing credit card transactions. If there is a discrepancy between the 1099K gross receipts and the taxpayers Schedule C, there is a high probability of being flagged for an audit.
Always reconcile your Schedule C gross receipts with 1099K's received from credit card processors or other third parties. If there is a discrepancy that you can prove, you can notify this issuer and request an amended form to be issued. If you do not receive one and you use your figures that do not match, make sure you have documentation other than a tracking log proving the reimbursements. These can be return receipts or bank statements. The most difficult to prove is cash, we recommend never refund with cash unless it has been processed through your cash register and you have proof.
*** Tax Tip Tuesday ***
Business Meals 100%
To encourage more restaurant and small business support during these trouble times business meals can be 100% deducted for all client meals and employees on business travel.
Remember, this does not include self-employed just grabbing lunch during the workday! These meals must be associated with conducting business. Business meetings with clients or employees do qualify.
*** Worry Free Wednesday ***
"Our CPA did it"
Our CPA did it, does not excuse late filing. A lawyer used a CPA to prepare and filed his 1040. Every year the CPA filed for an automatic extension, then completed and filed the return that summer.
One year the CPA prepared the extension and sent a draft to the Lawyer but, unbeknownst to the lawyer, the CPA never filed the extension. In August, the CPA completed and filed the return. The IRS assessed a penalty for late filing, and the Lawyer appealed.
Held for the IRS. The argument of the taxpayer was he had a reasonable cause for failing to file on time because he believed the CPA had filed the extension and relied on the CPA to do so. IRS held that taxpayers have a personal duty to ensure that tax returns and other documents are filed on time, a duty which cannot be delegated.
If you suspect issues with your returns, issue with a return, refund not being received, reach out to your tax preparer, it's your duty.
*** Tax Tip Tuesday ***
PPP Loans
Good news for firms that took out Paycheck Protection Program loans: The debt forgiveness is NOT taxable, and businesses can deduct expense that result in forgiveness of the loan.
This is going to result in double tax benefit for employer's! Income that is not recorded yet expenses are still used to reduce gross sales.
What's more, the PPP loans are on their second round. If your business is still struggling they can receive additional funding if they meet the following qualifications:
1. Previosly received a First Draw PPP Loan and will or has used the full amount only for authorized uses.
2. Has no more than 300 employees; and
3. Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
*** Worry Free Wednesday ***
Employers can provide tax-free disaster relief to employees affected by COVID
IRC 139, Disaster relief payments, allows employee to receive a "Qualified Disaster Relief Payment" from an employer tax-free, exempt from payroll taxes and fully deductible by the employer.
Qualified Disaster Relief Payments:
Includes any amount paid or reimbursed to an individual:
1. for reasonable and necessary personal, family, funeral, or living expenses incurred as the result of a qualified disaster;
2. for reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for the repair, rehabilitation or replacement is attributable to a qualified disaster.
Examples include reimbursement for the cost of personal protection items, the cost of creating or improving a home office, telecommunications and internet upgrades, additional child care because schools were close, and home security upgrades.
*** Tax Tip Tuesday ***
New this Season for EIC
Earned Income tax credit is an additional credit issued to qualifying worker with low-to moderate income. This is a refundable credit, and usually gives taxpayers a little boost to the refunds they receive.
There's a new rule to help people impacted by a job loss or change in income for 2020. Taxpayers can use their 2019 Earned income to calculate their 2020 EIC, if there 2019 Earned Income was more than their 2020 Earned Income. The same rules apply for the additional Child Tax Credit
*** Worry Free Wednesday ***
You may not have to pay that IRS penalty.
Taxpayers who missed one or more deadlines in 2020 may qualify for the IRS's First Time Penalty Abatement policy. Under the policy, the IRS might relieve penalties for failing to file a tax return, pay taxes on time or deposit when due.
To Qualify the following is required:
* You did not previously have to file a return or you have no penalties for the 3 tax years prior to the tax year in which you received a penalty
* You either filed all currently required returns or an extension.
* You have paid, or arranged to pay, tax due.
It is recommended to call the phone number on the penalty notice to see if you qualify
*** Tax Tip Tuesday ***
Taxpayer Bill of Rights
All taxpayers have fundamental rights when interacting with the IRS. These rights apply all year long, not just during tax season. Below is a summary of these rights:
1. The right to be informed
2. The right to quality service
3. The right to pay no more than the correct amount of tax
4. The right to challenge the IRS's position and be heard
5. The right to appeal an IRS decision in an independent forum
6. The rigth to finality
7. The right to privacy
8. The right to confidentiality
9. The right to retain representation
10 The right to a fair and just tax system
Remember the people of the IRS are just like you, they are doing a job that they have been trained form. We have been groomed to be fearful of the IRS and fearful of an audit. Most times, when a taxpayer is being questioned it's simply for verification, or proof. If you receive a notice that you don't understand, contact our offices, we are happy to help.
Tis the Season.....Are you ready? Bring on the boxes, Tax Season is upon us....See ya soon!
*** Worry Free Wednesday ***
More Audits of 401(k) loan to employees are coming in 2021. An IRS offical has said many employers allow 401(k) loans that do not comply with the tax code.
The tax code allows the loans, but to be valid, retirement plan documents must allow them too.
Bottom line: Be sure your retirement plan specifically allows loans and that loans made comply with the plan documents and the tax code.
*** Tax Tip Tuesday ***
February 1st is the deadline for employers to issue and file wage statements.
Keep in mind, for those employers that are mailing a W2, as long as it's postmarked by February 1st, then it's not late. Just hang in there, E-filing doesn't even open until February 12th.
If you have received your W2's, or 1099's contact our offices, we can get started so your return is ready to click-file on the 12th!
*** Worry Free Wednesday ***
Text Scam, Beware!
IRS warns about the latest scheme from fraudsters to steal your financial information. The text message reads as follows: “You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account.” It links to a fake site mimicking IRS’s “Get My Payment” tool. Do not respond to the text or open the link! Instead, take a screen shot and e-mail it to IRS at phishing@irs.gov. Include the date and time you received the text.
*** Tax Tip Tuesday ***
Got a Letter? Owing Taxes?
Check if there’ a barcode on it. The Service is adding a QR barcode to its CP14 balance due notices. Taxpayers who receive the letter can use their smartphones to scan the QR code to go directly to the IRS’s website for information on resolving the balance due online.
*** JUST IN ***
IRS Announced - Tax Season will begin February 12th!!!!
The Internal Revenue Service (IRS) has announced that tax season will open on Friday, February 12, 2021. Yes, on a Friday.
The IRS will begin accepting paper and electronic tax returns that day. This is about two weeks later than had been expected. The delay allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes - especially those involving a second round of stimulus checks (Economic Impact Payments, or EIPs).
Are you ready? We are! If you receive your information PRIOR to, we can still get it entered into our tax program so when it’s time we “click-file”.
Our offices will resume normal business hours next week once our power has been restored. Call, or email for an appointment!
Happy Friday! The wind storms that came through here did a ton of damage. Yesterday I took a drive and saw multiple downed power lines, tress and all that fun stuff! The good news is, we are safe, we are warm and we are simply camping indoors! Our offices are still without power and internet...I guess we needed a long weekend!
Hopefully will be back up and running by tomorrow....that doesn’t mean we are open, we will be closed until Monday. I am receiving emails, and Wendy is able to work a little from her home (she has power and internet restored) but she has limited access to information, and can only get onto our server.
Stay safe, stay warm, be kind.
Good morning! Happy to hear that a ton of places in town have power back....sorry to say our office isn’t one of them! Another day of rest....maybe this is what we need before tax season is in full swing! Happy Friday Eve everyone....stay safe, stay warm and be kind.
Good morning! We hope you are all safe and warm! Our offices are closed for the day, we have no internet and no power. Hoping things will be restored soon, but high winds are expected all day!
*** Worry Free Wednesday ***
Victim of Scam?
The victim of scam has more time to roll over withdrawn IRA funds, as the IRS privately rules. For example, a woman took money out of the IRA to comply with the demands of fraudster posing as an enforcement official, who threatened her if she didn’t pay up. She later wanted to put money back into her IRA, but 60 days had already passed. The Service granted her 60 days from the date of the ruling to complete her rollover.
*** Tax Tip Tuesday ***
Economic Impact Payments
Here is a recent one: A parent claimed their 21-year-old daughter as a dependent on their 2019 Form 1040, but they won’t be eligible to claim her on their 2020 return. She plans to file her own return for 2020, and her income will be below the threshold for getting the $1,200 stimulus payment. Will she get the rebate? Yes, but not this year. She can instead claim the amount as a refundable credit on her 2020 Form 1040.
*** Worry Free Wednesday ***
Can’t Pay Your Tax Debts?
Get help form a Kinder – Gentler IRS in the new taxpayer’s relief initiatives. This will give taxpayers, who qualify for a short –term payment plans an additional 60 days to pay their tax debts, increasing from the original 120 days to the new 180 days to pay. Easing the paperwork requirements with respect to certain installment agreements in turn allowing some folks who owe less than $250,000 in 2019 taxes, penalties, and interest to set up an installment agreement without IRS filing a notice of federal tax lien. Suspending collection efforts for some taxpayers who are unable to pay.
*** Tax Tip Tuesday ***
IRA’s New Life Expectancy Tables for Required Distributions
For the first time since 2002, the tables have been updated by the IRS. This will account for more-current individual mortality rates and allow distribution to be spread over more years. For example, a 72-year-old IRA owner currently uses a distribution period of 25.6 years to calculate RMDs. Under the new table, a 72-year-old would use a period of 27.4 years. (Note that the government stimulus law waives RMDs for 2020.) Basing the RMDs on longer life expectancies allows plan participants and IRA owners to take out smaller annual payouts and lets them keep money in their accounts longer. The updated tables apply to computing withdrawals for 2022 and beyond, even for those people who have been using a shorter life expectancy in prior years.
Looking for a monthly planner to help you budget your family, your life, your business. Live planner at it's finest!
Give us a call and let us know how we can help.
Year End is here! Time to get rolling on W2's, 1099's and year-end forms! If you aren't a regular client, and need help, give us a call before it's too late!🤓
Our Offices will be closing early today, so we can ring in the New Year!
Happy New Year!
Stay safe out there! Love lives here!
*** Worry Free Wednesday ***
Is my purchase really business related, or would the IRS deem it a personal purchase?
Of course every situation is different in nature and will have specifics for justification of questionable purchases. Coleman v. Commissioner, 2020-146 a laptop deduction was denied by the IRS under Section 274(d) Substantiation Required
IRC 274(d) Substantiation required states, "No deduction or credit shall be allowed under section 162 or 212 for any traveling expense (including meals and lodging with away from home), for any expense for gifts, or with respect to any listed property (as defined in Section 280F(d)(4), unless the taxpayer substantiates by adequate records or by sufficient evidence corroborating the taxpayer's own statement (A) The amount of such expense or other item, (B) the time and place of the travel or the date and description of the gift, (C) the business purpose of the expense or other item, and (D) the business relationship to the taxpayer of the person receiving the benefit. The Secretary may by regulations provide that some or all of the requirements of the preceding sentence shall not apply in the case of an expense which does not exceed an amount prescribed pursuant to such regulations."
What does this mean? Record keeping is imperative for ALL deductions, if you can't prove it you loose it! If you need some assistance setting up adequate accounting services, contact our office. We are happy to help keep your records so that if you need them, you have them accessible!
*** Tax Tip Tuesday ***
For Montana Small Businesses & Residents
* The 2021 UI Wage Base for Employer and Employee contributions is $35,300
* Minimum Wage is increasing to $8.75 per hour.
* There is no tip credit.
Our offices will be closing early today and will remain closed Thursday December 24th and Friday December 25th so we can spend the holidays with our family. Merry Christmas, stay safe, be well, and love always!
*** Worry Free Wednesday ***
Holidays are here what is deductible for employee gatherings and what is not? With all the additional COVID regulations on businesses it may be tough to decide if it is worth it to host that annual christmas party, or celebration. Are there health hoops to jump through, yes. There are additional tax laws that you may need to know before you plan that small gathering.
Holiday gatherings and holiday parties are considered 100% deductible you meet the following:
* It can be classified as a social or similar activity primarily for the benefit of employee morale without a preference for highly compensated employees, owners, or officers.
There have been numerous things canceled this year due to the inability to follow all of the additional regulations imposed by COVID. If you can find a way to still have a small gathering, then do it!
*** Tax Tip Tuesday ***
For Washington Small Businesses & Residents - The WA Minimum Wage is increasing effective January 1, 2021
New Rates are as follows:
* 16 years and older - $13.69
* 14 - 15 years old - $11.64
* There is no tip credit.
* To be exempt in a firm of up to 50 employees; the employees must earn at least $821.40 a week ($42,712.80 annual).
* To be exempt in a firm of 51 or more employees; the employees must earn at least $958.30 a week ($49,831.60 annual)
* Computer Professional in firms up to 50 employees; at least $37.65 an hour
* Computer Professional in firms 51 or more employees; at least $47.92 an hour
This content isn't available right now
When this happens, it's usually because the owner only shared it with a small group of people, changed who can see it or it's been deleted.*** Worry Free Wednesday ***
Are you a small business that applied for an received the PPP Loan back in April? If so I have some great news for you! The "final" (nothing is every really final with the IRS) regulations are out that will make applying for forgiveness of the loan process simple if the amount you received was under $50,000
If you borrowed $50,000 or less you do not have to:
* Maintain the number of employees formerly employed; or
* Ensure that employee compensation was not reduced by more than 25%; or
* Provide data on employee hours and salaries on the application; or
* Show calculation of the requested forgiveness amount. Borrows need only state the amount of the loan they believe qualifies for forgiveness. Lenders do not have to verify the claim or review borrowers' receipts or other documents to verify the forgiveness amount.
As a small business it is your responsibility to keep all records as your records are potentially subject to audit in the future.
*** Tax Tip Tuesday ***
For Idaho Residents - if you received money from the state due to COVID-19 Pandemic, be aware that this money is taxable for the state.
* Idaho Unemployment benefits
* Pandemic Unemployment Assistance for self-employed workers, including independent contractors, and gig workers
* Rebound Idaho Grants for Small Businesses and the Self-Employed
* Idaho's Return-to-Work bonuses for employees idled as a result of the pandemic who returned to work from April 20th through July 15th.
If you think you may owe, you can make and estimated tax payment. Or, start putting away some savings now for the tax bill that will be due in April. If you need to do some tax planning to see where you stand, please contact our offices for an appointment.
*** Worry Free Wednesday ***
Did you know this week is National Tax Security Awareness Week? Scammers are out more than ever this year, just adding to the already hectic year we have all experienced. As the holidays are upon us and 2021 tax season right around the corner, here are a few basic steps that everyone should remember during the next few months.
* Use security software on computers and mobile devices, and keep them updated
* Purchase anti-virus software that includes features to protect against malware.
* Be on the lookout for Phishing Scams - these come in a variety of methods from emails, phone calls and text messages. Remember if it is from the IRS you should receive a letter FIRST.
* Use strong and unique passwords for all online accounts.
* Take advantage of multi-factor authentication whenever possible.
* Shop at sites where the web address begins with "https" - the "s" is for secure communications over the network.
* Don't shop on unsecured public Wi-Fi places.
* At home, make sure you secure your network with a password.
* Back up fiels on computers and mobile phones regularly
* If you are working from home due to COVID, consider using a virtual private network (VPN) to securely connect to your workplace.
*** Tax Tip Tuesday ***
Are you ready to file your taxes? What are some things you should do before the tax year ends?
* Donate to a charity. Taxpayers who don't itemize may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying charities.
* Report any name or address change to the IRS and Social Security Administration
* Renew expiring ITINs
* Contribute salary deferral to a retirement plan to maximize the tax credit for eligible contributions.
If you would like assistance, or any tax planning, contact our offices for an appointment, we are happy to help!
*** Worry Free Wednesday***
Just a reminder to those of you that were laid off, received unemployment, including the additional $600 per week under the CARES Act; all the money received is considered taxable and must be included in gross income.
If you are currently receiving benefits you can opt to have taxes withheld. If you have returned to work, and did not have taxes withheld from Unemployment income, you can adjust your wages to have more withheld. If you have not had any taxes withheld, it is highly recommended to make an estimated tax payment.
There is still time for some last minute tax planning, contact our office for an appointment!
*** Worry Free Wednesday***
Just a reminder to those of you that were laid off, received unemployment, including the additional $600 per week under the CARES Act; all the money received is considered taxable and must be included in gross income.
If you are currently receiving benefits you can opt to have taxes withheld. If you have returned to work, and did not have taxes withheld from Unemployment income, you can adjust your wages to have more withheld. If you have not had any taxes withheld, it is highly recommended to make an estimated tax payment.
There is still time for some last minute tax planning, contact our office for an appointment!
*** Worry Free Wednesday ***
Just a reminder to those of you that were laid off, received unemployment, including the additional $600 per week under the CARES Act; all the money received is considered taxable and must be included in gross income.
If you are currently receiving benefits you can opt to have taxes withheld. If you have returned to work, and did not have taxes withheld from Unemployment income, you can adjust your wages to have more withheld. If you have not had any taxes withheld, it is highly recommended to make an estimated tax payment.
There is still time for some last minute tax planning, contact our office for an appointment!
*** Tax Tip Tuesday ***
Subcontractors, sole proprietors, and LCC's will see a new form this year. Technically, it isn't new, it was used 30 years ago to report Non-Employee Compensation. The reason for this is to help clarify the separate filing deadlines on Form 1099-MISC and the new 1099-NEC.
If you previously received a 1099 MISC for these type of services you will now receive a 1099 NEC by January 31st every year.
So what is nonemployee compensation?
* A payment made to someone who is not your employee.
* A payment made in the course of your trade or business.
* A payment made to an individual, partnership, estate or corporation.
* A payment totals $600 or more.
Please contact our offices if you have any additional questions!
*** Worry-free Wednesday ***
The biggest concern at this point should be, is the turkey completely defrosted!!!! Oh an who was cooking the pies?
Wishing you all a Happy Thanksgiving. Love lives here!
*** Tax Tip Tuesday ***
A new year is quickly approaching, and it's almost time to prepare year end W2's and 1099's.
By Dec 1st - Plan to:
*Remind employees that if they want to change their Federal Withholding due to any changes, e.g. marriage, divorce, birth, adoption, child turning 21 etc., file a new W4 with your HR department. Some states also have withholding forms, so make sure to update all!
*Make sure employee paycheck names and SSNs match their SSI Cards and W4 Data in your payroll system.
*Employers can elect to use the Special Accounting Rule and treat employee personal use of a company provided vehicle in Nov and Dec as Paid in 2021
If you have questions, need forms for employees, contact our offices, we are always happy to help!
*** Worry-free Wednesday ***
Record keeping is imperative!
IRS tax court was held in favor of the IRS when auditing a sales rep who travelled to meet with clients and potential clients and disallowed multiple deductions claimed by the individual. Proving payment is NOT proving deduction.
IRC Section 274 holds records must establish the specific date of arrival, departure time of each trip, the name of events attended, clients met with or business discussed on EACH trip.
If you want a hassle free way of accurate record keeping, give our offices a call, we are happy to offer additional guidance and suggestions.
*** Tax Tip Tuesday ***
Final entertainment and business meal deduction regulations have been issued!
For food and beverage to be a deductible business meal expense:
*the expense must not be lavish or extravagant under the circumstances
*taxpayer or employee must be present when food or beverages are furnished
*meal must be provided to a business associate.
If you have any questions, or need assistance in determining what is and isn't allowed please contact our offices, we are always happy to offer guidance.
We adopted this motto for our office a few months ago. An office sign has been in production for a few weeks. We felt today was a good day to share.
It's been said, ya get what ya pay for....Are you shopping at Kmart, or Nordstorm (we aren't talking rack)
*** Worry-free Wednesday ***
Good news from the IRS! The IRS will automatically abate some penalties due to mail backlog! Approximately 5 MILLION pieces of mail have accumulated due to COVID Pandemic shutdown.
The IRS system may automatically mail a penalty notice which will be abated once the IRS catches up. Also halted, automated collection actions!
If you have any questions or receive a notice you are not sure about, feel free to contact our offices, we are happy to do the footwork!
Looking for some feedback.
What sort of updates, information, and regular weekly posts would be interesting?
How often would you like to see posts about information, such as updates on payroll taxes, new tax, payroll and sales tax rates, changes or updates, suggestions for business operations, excel questions....?
Business planning or tax planning information? Personal finance, how to lower debt and raise your credit score?
I’m curious what is most helpful to my readers. I get a large variety of regular updates from 7 different states, the IRS, and a variety of business organizations I’m affiliated with, and sometimes I struggle with what I should share, and what my readers are interested in hearing about.
Feel free to comment suggestions on this post or send me a private message!
I appreciate each an every one of you and love doing what I do and helping everyone I can!
*** Tax Tip Tuesday ***
I can't believe it has been so long since I had the opportunity to share some Tax Tips on Tuesday! All I can say it has been a busy year with all the changes due to COVID.
I hope you are all staying safe and are well.
I'm sure people have heard this before but with the influx of changes I want to remind everyone that Gift Cards are NEVER used or requested to make tax payments. The most common way scammers will request gift cards is over the phone, through email, or social media.
Remember these key things and don't get scammed!
* The IRS will NEVER call to demand immediate payment, generally you will receive a letter in the mail FIRST.
* The IRS will NEVER demand the taxpayers pay taxes without the opportunity to question or appeal the amount they owe.
* The IRS will NEVER threaten to bring local police, immigration officers or other law enforcement to have the taxpayer arrested for not paying.
* The IRS will NEVER threaten to revoke the taxpayer's drivers license, business license or immigration status.
If you receive one of these types of messages it is a good idea to report it to the Tax Administrator, IRS, or call our office and we would be happy to assist you!
What’s new you may ask....well there are changes happening everyday! Our office has been focusing on tax returns.....STILL. Deadlines are right around the corner! If you are a Corporation, S-Corp or Partnership the extension deadline is September 15th, if you are an Individual, Trust or Fiduciary the extension deadline is October 15th.
Call and set up your appointment today or drop your things by, the deadlines will be here before you realize it!
*** Idaho Residents ***
Just in, the State of Idaho has passed a new law that allows first-time home buyers in Idaho to save money toward the purchase of a home while reducing how much Idaho Individual Income Tax they owe.
Idahoans who set up a First-Time Home Buyer Savings Account at an Idaho Financial Institution can claim and income tax deduction on their account contributions and interest earned starting with their Idaho Income Tax Return for 2020. Single/Head of Household Individuals can deduct up to $15,000 each year, and Married couples filing jointly can deduct up to $30,000 a year.
Withdrawals from the account, including accrued interest, aren't taxable when account owners use the money to make a down payment on their first home or to cover other eligible costs related to buying the home. Account owners can't have previously owned a home.
For more information, refer to Idaho Code Section 63-3022V:
legislature.idaho.gov/statutesrules/idstat/Title63/T63CH30/SECT63-3022V/
Section 63-3022V – Idaho State Legislature
legislature.idaho.gov
P.O. Box 83720Boise, ID 83720-0038P: 208-332-1000 | F: 208-334-2491 Information Center: P: 208-332-1000 E: idleginfo@lso.idaho.gov***Everyone BUT Idaho Residents***
Tomorrow is the day! If you haven't filed your tax return or filed for extension yet, contact our offices we can help!
For all of my clients that are in this boat, don't worry, I've already filed your extensions!
So excited that Tax Season will be OVER.....welllllll for a second that is! October 15th is right around the corner!
It's vacation time for this crew! Our offices will be closed from today at noon, returning Monday July 6th. I hope you all have fun, happy and safe 4th of July celebrations!
In case you missed it....we are in the Guide to the St Joe Valley 2020!
I owe this all to my clients, thank you for support of this small business!
Also a HUGE thank you to Tammy Trayer with Trayer Designs! You are AMAZING! Every time I come up with a wild advertising or website idea you knock it out of the park! ❤️❤️❤️
***Idaho Return to Work Bonuses***
So the details on how to qualify for the Return to Work Bonuses for the State of Idaho were released on Monday.
In summary, the Employer's apply for the benefits, and then pay the money to Employee's that choose to return to work between May 1, 2020 and July 1, 2020. The employee's position can be either full time or part time, full time will receive a one time $1,500 bonus, and part time will receive a one time $750 bonus.
Businesses can apply for the funds on or after July 13th, if they have employees who have completed the four-week work requirement.
If you are an employer and would like assistance with the application process, please contact our office, we are happy to help!
For the full article and requirements please visit:
rebound.idaho.gov/return-to-work-bonuses/
Return to Work Bonuses - Idaho Rebounds: Our Path to Prosperity
rebound.idaho.gov
Eligible entities may apply starting at noon MT on July 13, 2020 (subject to available funding). Bonuses will be awarded on a first-come, first-served basis until bonuses are fully expended. [...]Please let me introduce you to our new part-time Summer intern!
Jacob Spence joined our company last Monday and will be working for our office through August when he returns to college. Here is some information he would like you to know about her:
"My name is Jacob Spence I graduated from St. Maries High School and am currently a sophomore at University of Idaho with a dual major in Accounting and Economics. I am also the current treasurer of the UI Economics club. I am looking forward to working for Leah this summer because I can use what I've learned throughout the year in the University of Idaho College of Business and Economics to help out wherever I can and learn new things that job experience can teach, like how an office functions."
Please help me give Jacob a warm welcome!
Please let me introduce you to our new full time employee!
Wendy Baskin joined our company this Monday, and here is some information she would like you to know about her:
"Hi Everyone,
My name is Wendy Baskin and I am so excited to be a newbie here at Leah's Accounting Solutions. My family and I moved to St. Maries about 3 years ago and we are proud to call this our forever home. I have over 20 years of accounting experience while running a HVAC business as well as a home preschool/daycare. I look forward to being a part of Leah's growing business and serving our wonderful community with all their business needs."
Please help me give Wendy a warm welcome!
*** Idaho Workers***
Just in, under the Idaho Rebounds: Our Path to Prosperity, the Idaho Workforce Development Council is working to finalize a "Return to Work Bonus" for all unemployed individuals that return to work! This will be a one-time cash bonus of $1,500 for full-time work and $750 for part-time work, and will be provided to the worker after returning to work.
Eligibility and how to apply are expected to be available on June 15th.
***Idaho Residents***
The deadline for 2019 taxes is quickly approaching! In case you missed it, the State of Idaho was the ONLY state that extended tax deadline to June 15th instead of July 15th like the IRS. Why you may ask, they needed to make sure they could prepare the busget for next year!
If you haven’t filed yet, don’t worry there is still time! Call or make an appointment, we are happy to help! If you want to file an extension, our offices can do that as well!
We are still accepting applications, if you have prior bookkeeping experience that is a plus! Looking to get a person hired and working by June 1st! The most important requirement is that you know your way around QuickBooks, all the other duties can be taught if you are willing to learn. 😬
***PPP Loan Forgiveness***
On Friday, May 15th the process to apply for PPP Loan Forgiveness was released. If you are curious about the information it can be accessed on the SBA site:
www.sba.gov/document/sba-form--paycheck-protection-program-loan-forgiveness-application
If you need assistance, give our offices a call, we'd love to help!
Paycheck Protection Program Loan Forgiveness Application
www.sba.gov
PPP Loan Forgiveness Calculation FormGood morning on this beautiful Saturday morning! As I sit here on the couch sipping my coffee enjoying the sunrise through my living room windows I have made the decision that our office will reopen to the public on Monday.
Please be respectful, as my office will be open by appointment only. For those of you that I have been holding tax returns in my office, I will give you a call next week and we can schedule a time for you to pick them up.
I truly appreciate everything that my friends, family and clients have done to be supportive of our small business during these unprecedented times. Looking forward to the true end of tax season....it’s coming....I hope!
***Idaho Small Business***
Idaho Rebound Small Business Grant of up to $10,000 in financial grant support for Idaho small business and nonprofits with employees that have suffered interruptions due to COVID-19 eligibility details are now available.
To learn more visit: rebound.idaho.gov/idaho-rebound-cash-grants-for-small-businesses/
There is additional information listed on where you can access additional help if you do not qualify. Self-employed or independent contractors can seek assistance from the Pandemic Unemployment Assistance program through the Idaho Department of Labor.
Idaho Rebound Cash Grants for Small Businesses - Idaho Rebounds: Our Path to Prosperity
rebound.idaho.gov
Idaho small businesses are the lifeblood of our communities and the backbone of our state’s economy. However, the ongoing COVID-19 outbreak has forced widespread closures of small businesses across the [...]