Did you actually believe the IRS when they said not to worry about your tax returns until May 17?
As Washington continues to make our tax rules and regulations feel like a years-long fire drill, the IRS just heaped more confusion on everyone with their extension of the “regular” filing due date to May 17 from April 15. To top off the confusion, this extended due date DOES NOT include business tax returns.
The problem is that the IRS only extended 1040s, your individual income tax return, from April 15 to May 17 (May 15 falls on the weekend, so it goes to the next business day, May 17). And, really, confusingly to us, they did not extend any individual estimated payments. This means the first-quarter estimated payments that many of you must pay, which is due April 15, was not extended.
In essence, for all of you that make estimated tax payments, we’re still going to have to go through all the calculations, and all the work that we would normally go through to complete your tax return by April 15. That’s right, most of you will still need to get your tax returns processing and calculated by April 15.
If you’re not sure how the May 17 due date helps, or hurts you, just give us a call and we will walk through your options and how best to proceed.
Business owners, have you completed
all your Paycheck Protection Program work?
As I write this newsletter, the final date for any Paycheck Protection Program (PPP) forgivable loan is March 31, just a few short days away. The good news is that yesterday the Senate signed off on the PPP Extension Act of 2021 which extends the date to May 31. It is expected that the President will sign the Act.
We want to be sure that all of you who are self-employed understand that even if you do not have employees you may very well be eligible for a PPP forgivable loan, essentially a free government subsidy.
If your small business did not already received a PPP loan, then you likely qualify. If you did receive a PPP loan earlier in 2020 and had a drop in your gross receipts in 2020 compared to 2019 of 25% or more then you may qualify for a second draw from the government well with a second round PPP loan.
If you’re not sure if you’ve gotten what you’re entitled to or have any other questions regarding the PPP program give us a call.
American Rescue Plan Act of 2021,
just another several hundred pages of fun reading.
Signed into law just two weeks ago, the American Rescue Plan Act of 2021 includes wide-ranging pandemic economic stimulus actions and lots of tax law changes. We are updating all our systems to implement these changes, many of them retroactive into 2020 and affecting 2020 tax returns, to make sure all our clients benefit from the new provisions.
Of greatest impact for most of our business clients is the greatly expanded ability for businesses to benefit from the Employee Retention Credit. This credit can essentially provide a business with additional free government money to help get through the economic turmoil of the pandemic. This credit is somewhat complicated and technical to implement. The credit can be up to $28,000 per employee in some circumstances.
For our restaurant, bar, food truck, winery and food service clients, the Restaurant Revitalization Fund is a part of the Act that could provide you with a grant to help cover some of your pandemic-related losses. If eligible, the amount your business can receive is equal to your pandemic-related revenue loss (difference between your 2020 gross receipts and your 2019 gross receipts, reduced by any amounts received from the Paycheck Protection Program (PPP) loans).
The SBA is targeting early April to launch a phased rollout of the $28.6 billion Restaurant Revitalization Fund. Stay tuned for more details and, as always, don’t hesitate to call us with any questions you may have.
Office Update:
Yes, our office reconstruction is almost complete!
We’re happy to tell you that the reconstruction of our Salinas area office is nearing completion. We are certainly looking forward to welcoming you to our office again with the water damage repaired and the improving pandemic situation. While we don’t have a specific move-in date just yet, we fully expect it to be in about three weeks. I’d like to personally thank all of you for your patience and understanding during the chaos.
As a reminder, if you need to drop off any documents or files there is a secure drop box on the front porch of the office. This drop box is checked at least twice daily.
Scholl & Company is here to help you.
If you need help, or know of someone who does, we are ready to assist you. Just give us a call at
(831) 758-5966 or email us at info@schollcpa.com.