Our Blog

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.
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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.

Yesterday the IRS began depositing the second round of Economic Impact Payments (EIP) to qualifying individuals. Although they should have begun making direct deposits as early as last night they indicated that direct deposits will continue to be processed into next week.
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This week the U.S. Senate and House of Representatives passed the second round of COVID relief, the Consolidated Appropriations Act. The legislation provides another round of economic impact payments to individuals as well as additional funding for small businesses. Certain eligible small businesses who received the first wave of the PPP loan may be eligible to apply again. The legislation also opened the applications to non-profits, independent contractors, sole proprietors and the eligible self-employed. Additionally, the most anticipated guidance on the tax treatment of the Paycheck Protection Program (PPP) loan has been made clear.

Now, as year-end approaches, is a good time to think about planning moves that may help lower your tax bill for this year and possibly next. Year-end planning for 2020 takes place during the COVID-19 pandemic, which in addition to its devastating health and mortality impact has widely affected personal and business finances. New tax rules have been enacted to help mitigate the financial impact of the disease, some of which should be considered as part of this years' planning, most notably elimination of required retirement plan distributions, and liberalized charitable deduction rules.

In addition to November 10th being National Accountants Day and National Cupcakes Day, the IRS has also decided to add National EIP (Economic Impact Payment) Day to this list.
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Mallory Vincent, MBA •

With the holiday season approaching, tis the season for spreading kindness and being charitable. During the coronavirus pandemic, even more people and animals are in need, but many not-for-profits are struggling. By making a donation and giving a gift to charity, you are helping out others and spreading holiday cheer. This act of kindness could also be a great tax write-off, and in 2020 everyone will be eligible to receive a charity tax deduction on their tax return. Read on to learn some tips on how to make your donation count as a tax benefit on your 2020 tax return.
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Last week the IRS released guidance on how to report the deferral of withholding, deposits, and payments of certain payroll tax obligations. 

​On Monday, the IRS released Notice 2020-79 which provides cost of living adjustments for retirement plans for 2021. 
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401(k), 403(b), most 457 plans, and Thrift Savings Plan contribution limits have remained the same as 2020 at $19,500. The annual catch-up limitation for employees over age also remains unchanged from 2020, at $6,500.

The FAFSA application opens October 1, 2020 for the 2021 through 2022 year. The FAFSA is required for students to be eligible for federal financial aid. 

We received some great information from Raymond James on additional details related to how the FAFSA calculates financial need, how to submit the form, and if it should be filed when you don't think you'll qualify. To learn more check out their post here. 

Contact us with any questions and remember to follow us on LinkedIn so you can stay up to date on all of our blog posts!
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As we approach the last quarter of 2020, now is a good time to take a look at your withholdings and find out whether you are having enough taxes withheld from your paycheck. The IRS requires 100% of prior year tax (110% for adjusted gross income over $150,00) or 90% of current year tax to be withheld throughout the year. By adjusting your withholdings before the end of the year you can avoid underpayment penalties in April.
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