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Tax Day for Individuals Extended to May 17: Treasury, IRS Extend Filing and Payment Deadline

The Treasury Department and Internal Revenue Service announced on Wednesday that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.

“This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities,” said IRS Commissioner Chuck Rettig. “Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to.”

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, […]

By Linkenheimer LLP|2021-03-19T17:56:36+00:00March 19th, 2021|ca, CA tax, california, ftb, irs, tax deadlines|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

California Tax Update for January 20

A new federal form, Form 1099-NEC (nonemployee compensation), must also be filed in California. This form is for use by payors beginning with tax year 2020, to report payments of $600 or more to someone who isn’t their employee, paid to an individual, partnership, estate, or in some cases a corporation, for services or for fish purchases for cash, in the course of trade or business. The same form must also be filed on paper with the CA Franchise Tax Board, even if it was already filed with the IRS. For 2020, the due dates are Feb. 28, 2021, for paper and March 31, 2021, for electronic submissions. Contact your Linkenheimer CPA with questions or check here for more information: https://bit.ly/35jdC1H

By Linkenheimer LLP|2021-01-20T23:36:20+00:00January 20th, 2021|1099, New Tax Laws|0 Comments

PPP Loans Have Reopened: Let’s Review The Tax Consequences

The Small Business Administration (SBA) announced that the Paycheck Protection Program (PPP) reopened the week of January 11. If you’re fortunate to get a PPP loan to help during the COVID-19 crisis (or you received one last year), you may wonder about the tax consequences.

Background on the loans

In March of 2020, the CARES Act became law. It authorized the SBA to make loans to qualified businesses under certain circumstances. The law established the PPP, which provided up to 24 weeks of cash-flow assistance through 100% federally guaranteed loans to eligible recipients. Taxpayers could apply to have the loans forgiven to the extent their proceeds were used to maintain payroll during the COVID-19 pandemic and to cover certain other expenses.

At the end of 2020, the Consolidated Appropriations Act (CAA) was enacted to provide additional relief related to COVID-19. This law includes funding for more PPP loans, including a “second draw” for businesses that received a loan last year. It also allows businesses to claim a tax deduction for the ordinary and necessary expenses paid from the proceeds of PPP loans.

Second draw loans

The CAA permits certain smaller businesses who received a PPP loan and experienced […]

By Linkenheimer LLP|2021-01-19T19:11:15+00:00January 19th, 2021|cares act, New Tax Laws, ppp, small business|0 Comments

IRS Operations During COVID-19: Mission-Critical Functions Continue

The IRS is still open and processing mail, tax returns, payments, refunds and correspondence. However, COVID-19 continues to cause delays in some of their services. The service delays include:

Live phone support
Processing tax returns filed on paper
Answering mail from taxpayers
Reviewing tax returns, even for returns filed electronically

What You Can Expect

Click on the following link to see a list for the action you took – whether that’s sending your individual or business tax return or answering a letter. Then, open the action to see how long you may have to wait and what to do next.

IRS Expectation List

By Linkenheimer LLP|2021-01-07T21:53:20+00:00January 7th, 2021|irs|0 Comments