Translations from Your Trusted Advisor.
Employers who elected to defer certain employees’ payroll taxes can withhold and pay the deferred taxes throughout 2021 instead of just the first four (4) months of the year, announced the IRS. IRS Notice 2021-11 extended the end date of the period during which employers must withhold and pay applicable taxes (the employee share of social security tax) from April 30, 2021 to December 31, 2021. Accordingly, interest and penalties will not begin to accrue until January 1, 2022, rather than on May 1, 2021.
Yesterday, the U.S. Small Business Administration (SBA) and the Department of the Treasury released a document outlining how Paycheck Protection Program (PPP) borrowers should calculate revenue reduction and maximum loan amounts for second-draw PPP loans. The guidance also lists the documents borrowers must provide to support each set of calculation.
Alyssa Hodges, CPA •
You may have recently heard the news that the IRS will not be accepting tax returns until mid-February. While that is true for Individual/Personal tax returns, this does not apply to businesses. This also does not mean you should delay sending your tax information to your tax preparer because we still need time to prepare your return. We also hope that by getting information in early we can avoid a bottleneck situation once the IRS does allow returns to be filed.
So when should you send in your information? It depends on a few factors including the type of return (business or individual?), the information you need to be “ready”, and/or the type of tax forms you are waiting on.
Don’t miss out! The second round of Paycheck Protection Program (PPP) funding for small businesses impacted by COVID-19 will be open to more organizations tomorrow – January 15, 2021. The US Small Business Administration and Treasury announced jointly that the application window for Paycheck Protection Program (PPP) forgivable loans will open tomorrow for lenders with $1 billion or less in assets. The opening is scheduled to start at 9AM for both first- and second-draw PPP loans. Additionally, the program will begin accepting applications for first- and second-draw loans from large lenders on Tuesday, January 19, 2021.
Yesterday, the Paycheck Protection Program (PPP) reopened in a limited capacity. Monday’s opening was scheduled to be a specific window for financial institutions that serve minority and women-owned business to apply for first-time PPP loans. On Wednesday, the program will begin allowing these financial institutions to begin accepting applications for second-time PPP loans.
As part of the CARES Act the SBA paid six months of principal, interest, and associated fees that borrowers owed for certain types of loans. If you already received six months of loan payments, the Consolidated Appropriations Act brings some added benefits.
As we quickly approach the deadline for filing 1099-MISC or 1099-NEC, it is time to consider whether your business is ready to file.
Note that – effective for the 2020 tax year – Form 1099-NEC is utilized to report amounts of nonemployee compensation, while form 1099-MISC is utilized to report other forms of compensation. The due date for furnishing 1099-MISC or 1099-NEC statements to recipients and to the IRS for the 2020 tax year is Monday, February 1st, 2021 (since January 31st doesn’t fall on a business day).
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