April/May 2021 Newsletter

May 2021

Tax News & Updates

In this issue:

Tax Corner: Child Tax Credit Payments
SBA Restaurant Revitalization Fund
Special Alert: IRS Tax Payments, Portals and Correspondence
Tax Facts
Good Reads
Important Dates

Tax Deadline Approaches

Individual tax return filings are due May 17, 2021. It should come as no surprise that the team here at CPA is looking forward to the deadline! This signals the end of the busiest part of tax season, and we will get a chance to catch our breath and return to business as usual. So if you’re dragging your feet on your personal taxes and haven’t started filling out your Tax Planner yet, you’d better start now!

This month, we wanted to highlight some things to note about the Child Tax Credit payments and when you can expect them to be distributed. I also wanted to take the chance to let you know about the SBA’s Restaurant Revitalization Fund, since applications for grants just opened on May 3! And don’t forget to check the special alert section for some important news and recommendations about IRS payments, portals, and correspondence.

We love our clients and are honored to serve you throughout this tax season and the years to come. Please don’t hesitate to reach out to us!

Susan Clarke & The CPA Team

Tax Corner: What You Need to Know About the Expanded Child Tax Credit

The American Rescue Plan was signed into law by President Joe Biden in March, and one of the important relief measures concerned enhancements to the Child Tax Credit.

The American Rescue Plan raised the maximum Child Tax Credit amount to $3,000 per dependent ages 6 to 17, and $3,600 for younger children.

Individuals with children and an adjusted gross income of less than $75,000 or $150,000 for a married couple filing jointly are eligible for the full credit per qualifying child. The expanded credit will be phased out by $50 for every $1,000 of income over those limits.

Taxpayers with children under the age of 17 who earn less than $200,000 and married couples filing jointly earning less than $400,000 will still be eligible for the regular child tax credit, which is $2,000 per qualifying child.

Instead of the tax credit being issued in the form of a lump-sum refund, the Treasury Department will issue half of the credit in regular installments starting as early as July 2021.

Families could get up to $300 a month per child. These advance payments are estimated by the IRS based on data such as income, marital status, and the number and age of qualifying dependents.

Taxpayers who receive a larger advance than they’re eligible for will generally have to repay the excess. But there are measures in place to protect lower-wage earners from having to repay the full advance amount.

Parents will also be able to opt out of the advance payments and update relevant information using an online portal the IRS will roll out in the next few months. Instead, they will receive the full credit at tax time in 2022.

Questions? Email Us

The SBA’s Restaurant Revitalization Fund

Do you or someone you know own a restaurant, bar, or related food service business? You could be eligible for a grant from the SBA’s Restaurant Revitalization Fund!

The American Rescue Plan Act of 2021 set aside $28.6 billion to provide grants for restaurants that sustained financial losses due to the COVID-19 pandemic.

The Restaurant Revitalization Fund (RRF) grants are intended to help restaurants and other eligible businesses keep their doors open. This program will provide restaurants with funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location.

Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.

Who is eligible?

Restaurants
Food stands, food trucks, food carts
Caterers
Bars, saloons, lounges, taverns
Snack and nonalcoholic beverage bars
Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products

Funds may be used for business operating expenses such as payroll costs, mortgage payments, rent, utilities, maintenance, construction of outdoor seating, supplies, and food and beverage supplies.

Applications are now open! Learn how to apply here >>

Here are a few important alerts and recommendations concerning recent IRS tax payments, portals, and correspondence.

Check to see if a mistake was made in your IRS Tax Payment on 4/15/2021

The IRS messed up some 4/15/2021 tax payments! This caused confusion and delays of the ACH from some taxpayer’s bank accounts. If you had a payment scheduled, be sure to double-check your bank account and visit the IRS Tax Portal to make sure everything processed correctly!

Set up your IRS and State Tax Portals

We highly recommend that all clients set up their own IRS and state tax portals. There’s a ton of useful information and features in these portals, and it is a very secure way to communicate with the tax agency, among many other things.

Don’t ignore correspondence from a tax agency!

Getting mail from a tax agency can be nerve-wracking. But whatever you do, don’t let it sit there unopened. OPEN IT AND READ IT! And you’ll also want to upload a copy of it to your CPA portal and let a team member know.

Willie Nelson Wrote an Album Just to Cover His Tax Debts

That’s right! Even stars can get “surprised” by a big tax bill at times. But in the 90s, Willie Nelson came up with a creative solution: he wrote an entire album called The IRS Tapes: Who’ll Buy My Memories and all proceeds went to settle his tax debts! Source