In this issue:
  • Tax Corner: FAQs
  • COVID Relief Funding Updates
  • Meal Deduction Reminder
  • Healthcare Enrollment Alert
  • Staff Update
  • Tax Facts
  • Good Reads
  • Important Dates
Your Tax Questions, Answered
As February draws to a close, tax season is well underway! Over 50% of our business clients are eligible for 2020 ERC’s (Employee Retention Credits – remember, we covered this in the Jan. 2021 newsletter). These credits must be calculated before we can finalize the 2020 business tax returns. We are focusing on finalizing tax returns that are not impacted by the ERCs in 2020 while we compute the credits for clients who are eligible.
Each year around this time, we receive a number of tax questions. In this issue, we’ve answered some of the most frequently asked questions and have included some important reminders related to COVID relief funding and healthcare enrollment.
CPA will be rolling out new reporting over the next several months. Watch for your monthly management report email from our team and check out the cool new reports and graphs!
This month, we are also pleased to welcome a new accountant to our team, Geoff Fukawa!
Tax season is always a bit of a whirlwind, but we are never too busy to answer your questions. Don’t hesitate to reach out to us!
Susan Clarke & The CPA Team
Tax Corner: FAQs
Here are the answers to some frequently asked questions that our team has gotten recently.
Will the 4/15/2021 Filing Deadline be extended?
This is a moving target. On 2/18/2021 the House Ways & Means Democrats requested that the IRS extend the tax return filing season beyond 4/15/2021 in response to the ongoing nature of the Covid-19 pandemic and the delayed start and shortening of the filing season. If Congress passes a 3rd stimulus package, IRS said they will extend the 4/15/2021 filing deadline > 6/15/2021. However, for now, the current 4/15/2021 deadline still stands – with the exception of victims of the winter storms in Texas who will have until June 15 to file returns and pay any taxes that would have been due on April 15 (or March 15 for businesses).
Is it really better to eFile or is paper just as good?
The IRS has a backlog of 6.7M returns from 2019! Anything filed on “paper” will take many months for IRS to process.  Currently IRS is processing returns received around 7/15/2020. Things are very slow! We want to avoid paper filing anything with IRS whenever possible!
Do Extensions Cause Audit Flags?
NO! We receive this question every year from fretting taxpayers. This is a resounding NO, an extension does not cause an increased audit risk. Rushing to file an inaccurate return will though. While we do strive to file accurate and complete returns by the filing deadline, extensions may be necessary in some years to provide additional time to gather the necessary information and allow the taxpayer to review the completed return prior to submission to the tax agency.
COVID-19 Relief Funding Updates
PPP Loans: New Exclusivity Period for Small Businesses
In order to promote more equitable access to COVID-19 relief for small businesses, the Biden-Harris administration announced a new “exclusivity period” for PPP Loan Applications.
A 14-day exclusivity period for businesses and nonprofits with fewer than 20 employees will begin on Wednesday, February 24, 2021, at 9 am ET and end on Tuesday, March 9, 2021, at 5pm ET.
During this two-week period, SBA will not accept new applications from lenders for businesses and nonprofits with 20 or more employees, so that lenders can focus on serving smaller companies and “micro” businesses.
The Targeted EIDL Advance provides businesses located in low-income communities with additional funds to ensure small business continuity, adaptation, and resiliency. Advance funds of up to $10,000 will be available to applicants located in low-income communities who previously received an EIDL Advance for less than $10,000, or those who applied but received no funds due to lack of available program funding.
To see if your business is in a low-income community and will qualify, use this New Mapping Tool.
Remember, if you qualify, THE SBA WILL CONTACT YOU.
SBA will first reach out to EIDL applications that already received a partial EIDL Advance (between $1,000 – $9,000). Applicants will be contacted directly by SBA via email in the coming weeks with instructions to determine eligibility and submit documentation. 
All communications from SBA will be sent from an official government email with an @sba.gov ending. Please do not send sensitive information via email to any address that does not end in @sba.gov.
The Consolidated Appropriations Act (CAA) passed on December 27, 2020, and it temporarily increased the business meal deduction from 50% > 100% for 2021 and 2022. So feel free to support your local restaurants by eating out or ordering in for your business meals. Here’s a helpful chart for what is and isn’t deductible.
Welcome Geoff Fukawa!
We are so pleased to announce that we’ve added a new accountant to our team! Geoff recently completed his degree in Accounting, and he comes to CPA with over 10 years of corporate experience – much of his career being spent with the Chicago-based restaurant powerhouse, Lettuce Entertain You. Welcome, Geoff!
There Was a Time When Paying a Big Tax Bill Was a Badge of Honor!
In ancient Athens, only the very wealthiest people paid direct taxes, and these went to fund the city-state’s most important national expenses—the navy and honors for the gods. Therefore, many of these top taxpayers not only paid happily, but boasted about how much they paid! Source
Tax News & Articles
Important Dates & Deadlines
March 15, 2021
Due date for filing Partnership & S Corporation 2020 Tax Returns or Extension
 
April 15, 2021
Individual Tax Returns Due for Tax Year 2020
Individual Tax Return Extension Form Due for Tax Year 2020
Due date for filing Calendar Year C Corporation Tax Returns or Extension
1st Quarter 2021 Estimated Tax Payment Due
Last day to make a 2020 IRA Contribution
Last day to fund an H.S.A. for 2020
 
June 15, 2021
2nd Quarter 2021 Estimated Tax Payment Due
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