New Tax Laws - Linkenheimer LLP CPAs & Advisors

Partial Conformity to PPP Loan Tax Rules for California

Yesterday, Governor Gavin Newsom, Senate President pro Tempore Toni G. Atkins and Assembly Speaker Anthony Rendon announced that they have reached an agreement on a package of immediate actions that will speed needed relief to individuals, families and businesses suffering the most significant economic hardship from the COVID-19 Recession.

The package includes an agreement to partially conform California’s tax law to the new federal tax treatment for loans provided through the Paycheck Protection Plan (PPP). More than 750,000 PPP loans were taken out by California small businesses. The agreement allows companies to deduct up to $150,000 in expenses covered by the PPP loan. All businesses that took out loans of $150,000 or less would be able to maximize their deduction for state purposes. Larger firms that took out higher loans would still be subject to the same ceiling of $150,000 in deductibility.

This tax treatment would also extend to the Economic Injury Disaster Loans.

While the legislative language has yet to be published, this package is expected to be part of an early budget action that is quickly passed and signed by the governor. Similar proposals have emerged in the Legislature, namely AB 281 (Burke), […]

By Linkenheimer LLP|2021-02-18T22:32:01+00:00February 18th, 2021|ca, CA tax, california, New Tax Laws, ppp|0 Comments

California Tax Updates for February 17th

Update 1:

California’s Franchise Tax Board (FTB) has reopened. In a public service bulletin the FTB announced that beginning Feb. 1, 2021, its field offices and their public counter operations reopened to assist customers by appointment only. Requests for appointments can be made by contacting the field office directly by phone (here’s the link with phone numbers: https://bit.ly/3oXd0WN) or by sending an email to: FTBFieldOfficeAppointments@ftb.ca.gov

Update 2:

Interest rates on unpaid or underpaid taxes in California will remain unchanged for the second half of 2021. The CA Dept. of Tax and Fee Administration (CDTFA) has announced that the interest rate on taxes that are unpaid or underpaid remains at 6%. The interest rate on overpayments and refunds will remain at 0%, for taxes and fees administered by the CDTFA. These taxes include: sales and use tax, cigarette and tobacco products tax, hazardous substances tax, alcoholic beverage tax, […]

By Linkenheimer LLP|2021-02-17T17:23:33+00:00February 17th, 2021|ca, california, ftb, New Tax Laws|0 Comments

2021 Individual Taxes: Answers To Your Questions About Limits

Many people are more concerned about their 2020 tax bills right now than they are about their 2021 tax situations. That’s understandable because your 2020 individual tax return is due to be filed in less than three months (unless you file an extension).

However, it’s a good idea to acquaint yourself with tax amounts that may have changed for 2021. Below are some Q&As about tax amounts for this year.

Be aware that not all tax figures are adjusted annually for inflation and even if they are, they may be unchanged or change only slightly due to low inflation. In addition, some amounts only change with new legislation.

How much can I contribute to an IRA for 2021?

If you’re eligible, you can contribute $6,000 a year to a traditional or Roth IRA, up to 100% of your earned income. If you’re 50 or older, you can make another $1,000 “catch up” contribution. (These amounts were […]

By Linkenheimer LLP|2021-02-10T22:54:28+00:00February 10th, 2021|individuals, New Tax Laws, social security, tax|0 Comments

Many Tax Amounts Affecting Businesses Have Increased For 2021

A number of tax-related limits that affect businesses are annually indexed for inflation, and many have increased for 2021. Some stayed the same due to low inflation. And the deduction for business meals has doubled for this year after a new law was enacted at the end of 2020. Here’s a rundown of those that may be important to you and your business.

Social Security tax

The amount of employees’ earnings that are subject to Social Security tax is capped for 2021 at $142,800 (up from $137,700 for 2020).

Deductions

Section 179 expensing:
- Limit: $1.05 million (up from $1.04 million for 2020)
- Phaseout: $2.62 million (up from $2.59 million)
Income-based phase-out for certain limits on the Sec. 199A qualified business income deduction begins at:
- Married filing jointly: $329,800 (up from $326,600)
- Married filing separately: $164,925 (up from $163,300)
- Other filers: $164,900 (up from $163,300)

Business meals

Deduction for eligible business-related food and beverage expenses provided by a restaurant: 100% (up from 50%)

Retirement plans

Employee contributions to 401(k) plans: $19,500 (unchanged from 2020)
Catch-up contributions to 401(k) plans: $6,500 (unchanged)
Employee contributions to SIMPLEs: $13,500 (unchanged)
Catch-up contributions to SIMPLEs: $3,000 (unchanged)
Combined employer/employee contributions to defined contribution […]

By Linkenheimer LLP|2021-02-08T19:13:12+00:00February 8th, 2021|business, New Tax Laws|0 Comments

Updates From the IRS- February 1st Deadline, Employee Retention Credit and More

February 1 deadline: Employers to issue and file wage statements; Businesses to provide Forms 1099-MISC and 1099-NEC to recipients

By law, employers are required to file copies of their Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by January 31. However, since January 31 falls on a Sunday in 2021, the deadline is the next business day, Monday, February 1.

The IRS reminds businesses and other payors that the revised Form 1099-MISC, Miscellaneous Income, and the new Form 1099-NEC, Nonemployee Compensation, must be furnished to most recipients by February 1, 2021.

Take advantage of the extended Employee Retention Credit

The Internal Revenue Service urges employers to take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll.

Employers can withhold, make payments of deferred Social Security taxes from 2020

Read about IRS Notice 2021-11, which addresses how employers who elected to defer certain employees’ taxes […]

By Linkenheimer LLP|2021-01-29T00:10:57+00:00January 29th, 2021|irs, New Tax Laws|0 Comments