Translations from Your Trusted Advisor.
The American Rescue Plan Act of 2021 was signed into law on March 11, 2021 and included changes to the law that impact 2020 taxes. As some tax returns have already been filed, there are many questions about how resolve or when to file affected tax returns.
If your business received Main Street Funds in 2020 and performed better than anticipated, there is a looming question of whether your business will need to repay any of those funds. Taylor Caswell, Executive Director of the Governor's Office for Emergency Relief Recover, recently spoke with WMUR and provided some important clarification.
Alyssa Hodges, CPA •
After your business taxes are done and any adjusting journal entries have been provided by your accountant, a best-practice is to officially close the books. QuickBooks makes this easy by having a closing date feature which can either warn you or require a password before prior-year data is changed.
To enable a closing date:
Earlier this month a bill was filed with the NH Senate that would allow for PPP loan forgiveness to mirror the federal tax treatment. This ultimately means that loan forgiveness would not be taxable for BPT or BET purposes and the expenses would continue to be deductible.
Even if your business received a Payroll Protection Program (PPP) Loan, you may still qualify for the Employee Retention Credit. If you haven’t already claimed the credit in 2020, you still have the opportunity to amend your Q4 Form 941 to benefit from the credit.
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.
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