Stimulus Check Overview & Information

(Originally Emailed: April 17, 2020)
Dear Clients:

Please use the link below to navigate to the Stimulus Check Calculator (Please note: You will need to scroll down the screen a bit to get to the actual calculator portion):

https://www.washingtonpost.com/graphics/business/coronavirus-stimulus-check-calculator/

If you have NOT filed your Year 2019 Individual Tax Return, then the IRS will use your Year 2018 Adjusted Gross Income “AGI” to calculate your stimulus check amount.

  • AGI: Year 2018 Individual Tax Return can be found on Line 7 – front page of Form 1040

  • AGI: Year 2019 Individual Tax Return can be found on Line 8b – front page of Form 1040

On your last filed Individual Tax Return (either Year 2018 or Year 2019), if you had your bank account information AND you received a direct deposit REFUND, then your stimulus check should be paid via direct deposit into that same bank account.

On your last filed Individual Tax Return (either Year 2018 or Year 2019), if you had your bank account information AND you owed money, then the IRS will NOT use that bank account for a direct deposit of your stimulus check.

If this pertains to you or you did not have a bank account listed on your tax return or if your bank account has been closed AND you would like your stimulus check to be directly deposited into a bank account, then follow this link to update your bank account information.

Click on 'Get My Payment' and follow the prompt: https://www.irs.gov/coronavirus/economic-impact-payments

NOTE:

  • Married Filing Jointly taxpayers must use a Joint Bank Account

  • You may not use a Corporate Bank Account to get a personal direct deposit

Many taxpayer are receiving error messages that read: ‘No Information on File,’ ‘No Payment Status Available,’ or ‘Status Not Available.'  We believe this could be due to the fact that your bank account is linked to only paying in taxes and not receiving refunds.

If your stimulus check is based on Year 2018 and you would have received a higher amount if you had filed your Year 2019 return, then dollar amounts will get reconciled on your Year 2020 tax return. 

The stimulus check is a refundable tax credit that taxpayers would have received on their 2020 Individual Tax Return; to stimulate the economy, taxpayers are being issued the tax credit in the form of a check (money) now. 

Paper stimulus checks are taking much longer to receive:

Taxpayer AGI | Date Check Mailed

$0 to $10,000 April 24th
$10,001 to $20,000 May 1st
$20,001 to $30,000 May 8th
$30,001 to $40,000 May 15th
$40,001 to $50,000 May 22nd
$50,001 to $60,000 May 29th
$60,001 to $70,000 June 5th
$70,001 to $80,000 June 12th
$80,001 to $90,000 June 19th
$90,001 to $100,000 June 26th
$100,001 to $110,000 July 3rd
$110,001 to $120,000 July 10th
$120,001 to $130,000 July 17th
$130,001 to $140,000 July 24th
$140,001 to $150,000 July 31st
$150,001 to $160,000 August 7th
$160,001 to $170,000 August 14th
$170,001 to $180,000 August 21st
$180,001 to $190,000 August 28th
$190,001 to $200,000 September 4th
All Others September 11th

Get My Payment FAQs:

https://www.irs.gov/coronavirus/get-my-payment-frequently-asked-questions#payment

NOTE:
There is a fair amount of fraud occurring.  Please make certain to only put your bank account information directly on the link on the IRS website.  If you are not comfortable doing this, then we recommend that you wait to receive a paper check in the mail.

The Paycheck Protection Program is out of money (as of the original date of this writing: April 17, 2020).

On Thursday, the SBA announced that it had exhausted the programs allocated funds.  For those taxpayers who received a loan number, you should still receive your funds from the first round of funding.

For taxpayers who applied but have not heard back from their bank or lender, then you are in line if Congress signs off on additional funding.

For additional sources of accurate information and for 'Plan B,' here are some links that are very informative:

Paycheck Protection Program Loan Overview

(Originally Emailed: April 8, 2020)
Dear Clients:

By now we are sure that each of you have received an endless number of emails about the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Our email blast sent out last week pointed each of you in the right direction toward websites to get accurate, updated information on the new legislation we are learning about together.

In our email we highlighted the Paycheck Protection Program Loan.  Directly below, you will find the Paycheck Protection Program Loan Overview for your reference.

Paycheck Protection Program Loan Overview 

Covered Loan Period
Retroactive to February 15, 2020 through June 30, 2020

Maximum loan amount
Equal to lesser of:

  • 2.5 times the average total monthly payroll costs (maximum $100,000 per employee) during the one year before the date on which the loan is made (between January 1, 2020, and February 29, 2020, for newer businesses); plus any refinanced
    Economic Injury Disaster Loans; or

  • $10 million

Payroll costs defined
“Payroll costs” means the sum of the following payments:

  • Salary, wages, or other compensation paid to an employee, sole proprietor, or independent contractor (up to $100,000 annual limit per worker);

  • Payment of cash tips or equivalents;

  • Vacation, parental, family, medical or sick leave (other than the paid leave benefits required under the FFRCA);

  • Termination allowances;

  • Group health care benefits, including insurance premiums;

  • Retirement benefit payments; and

  • State or local payroll taxes

Who's eligible
Businesses, including nonprofits, that:

  • Were in operation on February 15, 2020, and

  • Have fewer than 500 employees (exceptions for certain industries)

Includes sole proprietorships, self-employed individuals, and independent contractors (including gig workers)

Business only needs to self-certify that loan is necessary due to economic uncertainty caused by COVID-19

Loan Forgiveness
Loan amount equal to eight weeks of the business’s payroll, mortgage/rent, and utilities, up to loan principal amount. Reduced if employees were laid off over last year or salaries are reduced from prior quarter

Up to 60 days to process loan forgiveness application. COD exclusion for federal income tax purposes

Use of Loans
Loans can be used to pay:

  • Payroll costs;

  • Group health care benefits;

  • Retirement benefits;

  • Mortgage/rent;

  • Utilities; and

  • Interest on pre-February 15, 2020, incurred debts

Payment Deferral
Payments on principal deferred for six (6) months

How to Apply
Most banks will be accepting applications.  Check with bank regarding processing times.

Loan Conditions

  • Two-year maturity date;

  • No personal guarantees or collateral (although owner(s) liable for amounts used for non-qualified purposes);

  • 1.0% interest rate;

  • Borrower and lender fees waived;

  • No prepayment penalties; and

  • One loan per business

Coronavirus Aid, Relief & Economic Stimulus Act aka CARES ACT | Families First Corona Virus Response Act

Dear Client:            

The Federal Government of the United States passed the following legislation last week:

Corona Virus Aid, Relief and Economic Stimulus Act aka CARES ACT
Families First Corona Virus Response Act

CARES ACT

Provides several different types of loans.  We are going to address two (2) of the loans below:

Loan #1:
Paycheck Protection Program (aka PPP): Provides small businesses with the funds to pay up to eight (8) weeks of payroll costs (including benefits), interest on mortgages, rent and utilities.

  • Administered through Banks

  • Apply beginning April 3, 2020 if you are a small business or sole proprietorship

  • Apply beginning April 10, 2020 if you are an independent contractor and/or self-employed individual

  • Apply through your existing SBA lender OR your bank

Please find the link to the US Department of the Treasury for overview of the program, lender information, borrower information and an application:

https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses

In response to many questions regarding the loan application and its completion, our office can provide assistance.  If you would like our office to complete the application for you, then please contact Claudia Garcia at Claudia@StreitfeldAccounting.com.  Our fee to complete the loan application for you is: $500.

Loan #2:
Economic Injury Disaster Loan Application (aka Emergency EIDL Grants): Includes a provision that makes it easier for a small business to apply for an amount UP TO $10,000 in working capital without having to go through a number of the requirements that are customary when applying for a conventional small business loan.

Link for eligibility and for the application for the Economic Injury Disaster Loan: https://covid19relief.sba.gov/#/

FAMILIES FIRST CORONA VIRUS RESPONSE ACT

Provides immediate relief starting April 1, 2020 to employees and employers through:

  • Mandatory Paid Sick Leave

  • Mandatory Paid Family Leave

  • Employer Payroll Tax Credits

  • Expanded Unemployment Benefits

For a detailed chart of each program available, please navigate directly to the Labor & Workforce Development Agency website: https://www.labor.ca.gov/coronavirus2019/#chart

OTHER IMPORTANT INFORMATION AFFECTING TAXPAYERS

Federal:

Filing Extensions:
The IRS has announced that the Federal Income Tax Filing due date is automatically extended from April 15, 2020 to July 15, 2020 (if you are a Fiscal Year taxpayer, then your due date has not been extended).

Payment Extensions:
A Taxpayer with a Federal Income Tax Payment due April 15, 2020, who is affected by the COVID-19 emergency is eligible to defer all income tax liabilities until July 15, 2020.

Year 2019 Federal Balance due – Extended to July 15th

Year 2020 Federal Estimated Tax Payments:

  • April 15th – Now due July 15th

  • June 15th – NO CHANGE

  • Sept 15th – NO CHANGE

  • Jan 15th – NO CHANGE

Important:  If you did not make your required estimated payments in Year 2019, then you are still exposed to penalties and interest.

If you have already filed your Federal tax return and have a payment scheduled to be paid electronically that you would like to change, then please call: (888) 353-4537 to change your scheduled tax payment.

California State:

Filing Extensions:
The CA FTB has announced that the State Income Tax Filing due date is automatically extended from April 15, 2020 to July 15, 2020 (if you are a Fiscal Year taxpayer, then your due date has not been extended).

Payment Extensions:
A Taxpayer with a State Income Tax Payment due April 15, 2020, who is affected by the COVID-19 emergency is eligible to defer all income tax liabilities until July 15, 2020.

Year 2019 CA State Balance due – Extended to July 15th

Year 2020 CA State Estimated Tax Payments:

  • April 15th – Now due July 15th

  • June 15th – Now due July 15th

  • September 15th – NO CHANGE

  • January 15th – NO CHANGE

If you have already filed your California State tax return and have a payment scheduled to be paid electronically that you would like to change, then please call (916) 845-0353 to change your scheduled tax payment.

OTHER STATES’ RESPONSES TO COVID-19

https://www.caltax.com/FILES/2020/COVID19RESPONSE.PDF

CALIFORNIA UNEMPLOYMENT

The Pandemic Unemployment Assistance is a brand-new program.  Please click on the link below to find out more about this assistance and California’s response to COVID-19.

https://www.edd.ca.gov/about_edd/coronavirus-2019.htm
https://www.edd.ca.gov/Unemployment/Filing_a_Claim.htm

CDTFA – SALES AND USE TAXES AND FEES

Extensions are available through May 11, 2020.

https://www.cdtfa.ca.gov/services/#Request-Relief

Welcome to Year 2020!

Happy New Year and Welcome to 2020!

 

Year 2019 flew by and we are certain that it must have had something to do with the changes and challenges of learning the ins and outs of the Tax Cuts and Jobs Act (TCJA) of 2017.  It has been an interesting year for our firm, and we hope that it has been a happy and prosperous year for you too.

 

Please review the important information below that will assist you in getting organized and prepared for the upcoming Tax Season.

 

Engagement Letters:

We now use just one Engagement Letter (EL) for all individuals and businesses. Taxpayers must complete just one EL for all tax filings each year that we prepare your return. Our EL includes a 'Payment Authorization' page, which states that your accounting fees are due and payable upon completion of your tax return.  Please note that work will not be started on your tax return until your completed and signed EL has been received by our office.
 

The 2019 Engagement Letter can be found on either one of our websites and signed and submitted electronically: CLICK HERE


Tax Preparation Fees:

This year expect a minimum increase of 5% for all our services, including but not limited to: tax preparation, accounting services, and business filings. In addition, starting in Year 2020, our offices will be charging a 3% processing fee for all credit card payments.  There are no additional charges for payments made via an electronic bank draft (EFT).


ShareFile:

Our offices use ShareFile to securely transfer and store files.  If you have not set up your ShareFile account, then please follow this invitation link: CLICK HERE

 

 

Use your specific email address listed on your tax return.  If you file a joint return, then both taxpayer and spouse are linked to the same ShareFile account. 

 

Scheduling your Tax Appointment – New: Online Scheduling:

To increase efficiency and make it easier for clients to book appointments, we are implementing a new online scheduling program.  When you call the office or email us, then we will direct you to our new online scheduling program.  You will then be able to view all our open appointment times and schedule a time that works for you.

 

Tax Return Due Dates for Year 2019 returns:

  • Individual Tax Returns:  April 15, 2020

  • Partnerships: March 15th for calendar-year filers (fiscal year; due by the 15th day of the third month following the close of the taxable year)

  • C corporations: April 15th for calendar-year filers (fiscal year; due by the 15th day of the fourth month following the close of the taxable year)

  • S corporations: March 15th for calendar-year filers (fiscal year; due by the 15th day of the third month of the taxable year)

  • W-2s and 1099s: Due no later than January 31, 2020

  • City of LA Business License Renewal: Due no later than Friday, February 28, 2020


Identity theft:

Starting in 2019, the IRS permits residents of some states, including California, to obtain an Identity Protection Personal Identification Number (IP PIN) upon request. Taxpayers who are part of the IRS’s IP PIN program receive a letter from the IRS every January containing a special PIN number that prevents their income tax return from being filed without that taxpayer’s unique IP PIN.
 

Taxpayers must create an IRS account and request their own IP PIN.  If you are interested in obtaining your own IP PIN, then you can do so at: www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin


Virtual currencies:

The IRS has ramped up its enforcement of virtual currencies, such as Bitcoin. Most taxpayers who own virtual currencies fail to report their taxable transactions when filing their income tax returns.  In 2019, the IRS started sending letters to taxpayers with known virtual currency accounts and now requires taxpayers (on their 2019 income tax return) to affirmatively declare whether they engaged in any virtual currency transactions during the year.  Intentionally failing to report taxable income can have severe consequences.
 

For more information please click here:
https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions

 

California Health Insurance Mandate:

The federal government repealed the penalty for failure to maintain health insurance (referred to as the “individual mandate”) starting with the 2019 tax year.  In response to the federal government’s repeal, as of January 1, 2020, the State of California will charge an individual who fails to secure ACA-qualified health insurance coverage an annual penalty of $695 (or more) when they file their 2020 California tax return.
 

For more information please click here:

https://www.ftb.ca.gov/about-ftb/newsroom/health-care-mandate/index.html?WT.ac=Healthcare


Foreign accounts:

We must report overseas assets owned by businesses as well as individuals.  The reporting requirements are increasing and the penalties for failure to report continue to be harsh.  Not all foreign holdings must be reported.  If, for example, you hold stock in a foreign company through a U.S. broker, those holdings do not have to be separately reported. However, if you hold any other types of foreign assets, including bank accounts and securities accounts, then please let us know.
 

For more information please click here:

https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

 

Gig Economy:

According to a Gallup poll, 35% of U.S. workers participate in the ‘Gig Economy’.  When we think of the gig economy, we think of rideshare drivers or using Airbnb to rent out a room.  There has been much debate and controversy as to whether payors in the gig economy must treat their workers as employees rather than as independent contractors.  If you are receiving a 1099 for the first time, then please reference the information below to help you prepare for your tax filing.
 

For more information please click here:

https://www.irs.gov/businesses/gig-economy-tax-center

 

California adopts ABC test for classifying workers:

 

AB 5 codifies and expands upon the CA Supreme Court’s Dynamex ruling, in which the court adopted the ABC test for determining whether a worker is an employee or an independent contractor for purposes of CA wages.

 

Under AB 5, most workers are presumed to be an employee.  Under the ABC Test, all three conditions of the test must be met in order to treat the worker as an independent contractor. 

 

The ramifications of misclassification are severe.

 

The EDD is aggressive when it comes to payroll tax audits and California does not offer relief from penalties or have a voluntary classification settlement program.  If the EDD finds the workers are employees, the business will be assessed significant tax, penalties, interest and any unpaid withholding and/or payroll tax.

 

In addition, California law allows the Labor Commissioner or a court to assess a civil penalty for “willful misclassification” of employees as independent contractors.  The penalty, which is in addition to other assessments, penalties, or fines, is

  • $5,000 to $15,000 for each violation (a single misclassified individual); and

  • $10,000 to $25,000 for each violation if the Labor Commissioner, or a court, determines there is a “pattern and practice” of these violations.

 

For more information please click here:

https://www.edd.ca.gov/Payroll_Taxes/ab-5.htm

 

HAPPY 2019!

Dear Clients:

Happy New Year and welcome to 2019!

2018 produced important tax changes that will impact all taxpayers. Please review the information below that will assist you in getting organized and prepared for this tax season.

Our Engagement Letter has a new look! To simplify the process, we are using just one Engagement Letter for all individuals and businesses. Taxpayers only have to complete the one EL for all of their tax filings. The Engagement Letter now includes a 'Payment Authorization' page, which states that your accounting fees are due and payable upon completion of your tax return.

Please note that work will not be started on your tax return until your completed and signed Engagement Letter has been received by our office.

The 2018 Engagement Letter can be found on either of our websites and signed and submitted electronically:

Software:

You may be familiar with the two software programs we have used in the past:

  • Right Signature: You will receive secure documents from our office through Right Signature when signatures are required

  • ShareFile: ShareFile is the software we have selected to securely transfer and store files. In the next few days, you will receive an invitation email to access your unique ShareFile folder. The email will come from: mail@sf-notifications.com. You MUST accept the invitation from ShareFile, after which you may set-up your account and begin storing and sharing files with our office.

Please note that our office will no longer provide paper copies of tax returns (unless requested). Instead, we will load your return(s) in your ShareFile to be retrieved by you, as needed.

2018 Federal Tax Reform Law

2018 saw the largest federal tax reform legislation (in the last 30 years) signed into law. All taxpayers will see major changes to their 2018 federal tax returns. The following are some key points:

Some taxpayers will pay less tax, but due to problems with the IRS’s published withholding tables, many taxpayers will be under-withheld on their paychecks;

Prepare your tax documents as you have in the past. Although there are new (deductible) restrictions on your federal return, many states did not conform to the law.

Bitcoin & Other Virtual Currencies

With the rapid fluctuation in value of virtual currencies and the recent ability to trade Bitcoin futures, the IRS is placing special scrutiny on these transactions. Please visit the following 'CoinTracking' website to utilize their reports as a guide on how to properly track your trading activity.

Tax Return Due Dates:

W-2s and 1099s: January 31, 2019 for Year 2018

City of LA Business License renewal: February 28, 2019

Partnerships: March 15th for calendar-year taxpayers; others are due by the 15th day of the third month following the close of the taxable year

C Corporations: April 15th for calendar-year taxpayers; others are due by the 15th day of the fourth month following the close of the taxable year

S Corporations: March 15th for calendar-year taxpayers; others are due by the 15th day of the third month following the close of the taxable year

Non-Profits: May 15th for calendar-year taxpayers; others are due by the 15th day of the fifth month following the close of the taxable year

Estates & Trusts: April 15th for calendar-year taxpayers; others are due by the 15th day of the fourth month following the close of the taxable year

Thank you!

Happy 2018!

Dear Clients:

We hope that 2017 was a prosperous and successful year for you and your family.  2017 certainly was an interesting year capped off with the passage of the tax reform legislation. 

Our office continues to grow and evolve.  January 2018 marks the one-year anniversary at our offices for Jacquelyn Shaw.  Many of you have had the opportunity to work with Jacquelyn and have experienced her professionalism and thoroughness; we feel very fortunate to have her!  We are pleased to welcome Dora Bessenbacher to our firm on a full-time basis beginning in early January.  Dora's emphasis will be on tax return preparation and accounting services.

Our downstairs offices have been completed and will officially house Retsky Insurance Agency, Inc. as of March 1st.  The other two downstairs offices are utilized by Streitfeld Accounting staff and Bing Xu, who offers international tax services.

Of course, the new tax reform legislation is front and center on our minds.  We are taking the necessary time to educate ourselves on the many changes incorporated in the new law and how our clients will be impacted.  Please rest assured that we will work hard to educate ourselves on the intricacies of the law so that we can pass this information onto you.

Thank you!