WASHINGTON — The U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.
The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee's own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.
The Act provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.
The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee's pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee's pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee's pay.
PAID SICK LEAVE CREDIT
For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee's regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.
For an employee who is caring for someone with Coronavirus, or is caring for a child because the child's school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee's regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
CHILD CARE LEAVE CREDIT
In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee's regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
PROMPT PAYMENT FOR THE COST OF PROVIDING LEAVE
When employers pay their employees, they are required to withhold from their employees' paychecks federal income taxes and the employees' share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.
Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.
If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.
SMALL BUSINESS EXEMPTION
Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer's business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.
Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.
As we expected, the Service has 'chipped in' and extended Tax Day from April 16th, 2020 to July 15th, 2020. Thank you! Here are some additional information from the Service that many of us may find useful:
The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.
Tax Largie, Inc. is practicing Social Distancing, too. It's the right thing to do! Therefore, we will be processing tax returns from documents received through electronic media: email, text, etc. We're doing our part to prevent the spread of COVID-19.
If you have any questions, please contact us at (786) 715-6781 or email@example.com
How many of you have asked the "Money" questions, "Where's my refund?" The IRS may be able to shed some light on this.
Taxpayers who claim the Earned Income Tax Credit or the Additional Child Tax Credit may experience a refund hold. According to the Protecting Americans from Tax Hikes (PATH) Act, the IRS cannot issue these refunds before mid-February. The IRS expects the first EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they chose direct deposit and there are no other issues with their tax return. Check Where’s My Refund for your personalized refund date.
WMR on IRS.gov and the IRS2Go app will be updated with projected deposit dates for most early EITC/ACTC refund filers by February 22. So EITC /ACTC filers will not see an update to their refund status for several days after Feb. 15.
The IRS, tax preparers and tax software will not have additional information on refund dates, so Where’s My Refund? remains the best way to check the status of a refund. Where’s My Refund? is only updated once daily, usually overnight, so you don’t need to check the status more often.
Why is my refund being held?If you claim the EITC or ACTC on your tax return, the IRS cannot issue your refund before mid-February. The law requires the IRS to hold the entire refund — even the portion not associated with the EITC or ACTC. Like previous years, some tax refunds may be held if there are questions about the tax return or the IRS needs more information.
When will I get my refund?The IRS expects the first EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they chose direct deposit and there are no other issues with their tax return. Check Where’s My Refund for your personalized refund date.
Tax Largie, Inc.'s nationwide tax preparation service is available to assist you with your current, prior years, and future years tax prep and filing. Contact us; we can help!
As you are undoubtedly aware, e-filing tax returns begin January 27th, 2020. For those of you that will have a refund, Service provided a 'What to Expect for Refunds in 2019' that many of us taxpayers should keep in mind during this tax season.
The IRS issues more than 9 out of 10 refunds in less than 21 days. However, it’s possible your tax return may require additional review and take longer. Where’s My Refund? has the most up to date information available about your refund. The tool is updated daily so you don’t need to check more often.
Join the eight in 10 taxpayers who get their refunds faster by using e-file and direct deposit. It's the safest, fastest way to receive your refund and is also easy to use.
Your refund should only be deposited directly into accounts that are in your own name; your spouse’s name or both if it’s a joint account. No more than three electronic refunds can be deposited into a single financial account or pre-paid debit card. Taxpayers who exceed the limit will receive an IRS notice and a paper refund.
Whether you file electronically or on paper, direct deposit gives you access to your refund faster than a paper check.
Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding
If you requested a refund of tax withheld on a Form 1042-S by filing a Form 1040NR, we will need additional time to process the return. Please allow up to 6 months from the original due date of the 1040NR return or the date you actually filed the 1040NR, whichever is later to receive any refund due.
The word is out! Everyone is talking about it; some are screaming it; but it's all the same news: The IRS announced today that the nation's tax season will start for on Monday, January 27, 2020!
ARE YOU READY?
Ensure to give your Tax Professional all required documents and information needed to e-file an accurate tax return - the first time. Please have a conversation with your CPA and notify him/her of any changes in your life since the last tax return (newborn, new home, new business, marital status, relocation, etc.).
IP PIN - If you received an IP PIN, your tax professional will need it to file your tax returns. "The IP PIN is a six-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number on fraudulent federal income tax returns. An IP PIN helps the IRS verify a taxpayer's identity and accept their electronic or paper tax return." (IRS).
FBAR - Report of Foreign Bank and Financial Accounts (FBAR)A United States person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report:
Entrepreneurs should ensure their estimated tax payments, payroll tax deposits and all related liabilities, income tax payments are current and reflected in your respective bookkeeping.
Here's wishing all of you a happy holiday! May the spirit of Christmas 2019 bless you and others; and may your New Year 2020 be filled with continued blessings.
Tax Largie, Inc.
Let’s just jump right into it.
Extension Deadline – Tuesday,10/15/2019
Whether you drive the Maserati Alfieri, Telsa, or the BMW 740e, the IRS allows a tax credit for vehicles acquired after December 31, 2009. The credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.
Watch out! Micro-Captive Insurance is an effective strategy to save money – if used correctly! Tax law generally allows businesses to create "captive" insurance companies to protect against certain risks. Under section 831(b) of the Internal Revenue Code, certain small insurance companies can choose to pay tax only on their investment income. However, be careful! In abusive "micro-captive" structures, promoters, accountants or wealth planners persuade owners of closely held entities to participate in schemes that lack many of the attributes of genuine insurance. Unfortunately, those individuals engaging in this abusive practice is being hunted by the IRS.
First Time Home Buyers
Did You Know you could use your 401(k) savings to Buy Your First Home – without an early distribution penalty? Absolutely! Call your broker to find out more details about this. If they confirm, then your next call should be me, Realtor Largie! Realtor Largie will find you a home for you and the family, asap!
Self-employed folks, remember Realtor Largie is also a CPA. You're in excellent hands in Largie's world :)
As the last quarter of 2019 winds down, there have been some tax updates that you should know. Straight from the Service, check these updates below.
TAX TIPS, 2019:
Now that we've gotten the tax reminders and home-buying stuff out the way, who's down for a Jerk Chicken dinner with Realtor Largie?
Have a GREAT day folks!
2018 tax season was challenging for many due to the impact of the TCJA and the new tax laws associated with it. Though it was a tough road for many, some had the best tax season they have ever had. Why? Simply put - they were prepared. Tax planning can go a long way and save you a lot of money.
Thank you goes out to everyone that chose Tax Largie, Inc. as their business professional of choice. I look forward to working with you all, soon.
You should have all filed your Business Tax Returns by now. If not, what are you waiting for? I hope you're not saying, "Oh, I'll just filed an extension - again!" If that's your thought, then shame on you.
Business Tax Returns Due:
Partnership returns are due March 15th!
S-Corporations returns are due March 15th!
You have until Friday, folks! Let's get to work.
Tax Largie, Inc. is here to help! Contact us!
That's right folks! With the right tax professional, you stand a chance of benefiting from several tax credits available to you, both from a business and individual tax credit perspective.
Hopefully, your Business Tax Professional is familiar with all those credits and seek to ensure you receive every penny you are eligible for and deserve to receive.
Yes, the work can be time-consuming; may require higher level tax knowledge; may cost a little more in fees, but it's well worth the benefit of it being done right.
Tax Largie, Inc. is available to assist you with your tax preparation needs, both business taxpayers and individual taxpayers. Contact us; we can help!
"Oh, snap! Tax season is here again!"
That's right folks! It's time to e-file your tax returns, starting January 28, 2019.
Everyone is worried about the government shutdown and how it will affect their tax refunds this filing season. In summary, the IRS will begin accepting tax returns as of January 28th, 2019! Likewise, "The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns." (IRS)
Noteworthy, the IRS will be waiving, "...the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year." (IRS). Therefore, if you were one of those individuals that did not adjust your withholding to accommodate the tax changes provoked by the TCJA on December 2017, you're in luck - this year!
Because of the unpredictable nature of the government shutdown, changes could possibly occur. An update will be given should that happen.
Entrepreneurs, there are a lot changes happening for you this year. In short, get a CPA. It's time! Tax Largie, Inc. is available to assist you with your bookkeeping, payroll, business and individual tax preparation needs. You may also visit our Service Plan Fees tab for services that suit your business. Then, let's talk about getting you started. Contact us!
Have a Great Season!
Some Quick Updates:
Child Tax Credit increase from $1,000 to $,2000! Remember, this is in addition to the $500 for dependents that didn't qualify for the Child Tax Credit. Not bad, huh? Of course not!
Taxpayers with No Tax Due can still be eligible for a refund of up to $1,400! However, you will only get the refund - if you file a tax return.
401K contributions limit increased from $18,500 to $19,000! Take advantage.
IRA contributions limit increased from $5,500 to $6,000! Take advantage.
ITIN Folks - Make sure you renew asap or prior to year-end.
One easy way to maximize your refund and avoid delays of receiving it is to merely have a folder or place where you keep all your current year tax documents, such as your 1095-A (healthcare), 1099-R (retirement), and if you're self-employed and do not have a bookkeeper - get one! You're throwing away money without knowing.
Prior Year Tax Returns - if you have prior year tax returns that you need help with resolving issues associated with them, call us. We'll get it rectified for you. Simply send us an e-mail at firstname.lastname@example.org or call us at (786) 715-6781.
If you haven't heard, yet, your favorite Accounting professional [Dale Largie, CPA] is now a licensed Realtor for the State of Florida.
Whether you're looking to buy, sell, lease, or rent, Dale Largie, CPA - The Realtor is here to help you reach your goals. The link to our secured real estate page is:
There you may search for your new investment at your convenience. We look forward to working with you.
"OMG! The tax extension deadline Pac-Man looking monster is coming to get me! Aaaahhhh!" Yep! That's what a lot of people are saying.
Haha! Though we say it in jest, there are a lot of entrepreneurs having anxiety attacks, because the September 17, 2018 deadline is quickly approaching. Businesses that would be impacted include:
Monday, 9/17/2018 –
In the following month, specifically October 15, 2018, additional tax filing deadlines will be chasing entrepreneurs and individuals as follows:
Monday, October 15, 2018 -
The solution is simple: Hire Tax Largie, Inc.
Our fees starts at $43.75 weekly! Yes - no catch! Check out our Service Plan Fees tab for more details. After hiring us, you will have more time for vacations and spending time with the family and/or friends. More importantly, you'll be in compliance and not have the IRS on your back hounding you for payment; placing liens on your business; and sending you correspondence that depresses your day.
What's the point of making money if you can't enjoy it?
Tax Largie, Inc. will help you make extensions a thing of the past. Call us now at (786) 715-6781 or e-mail us at email@example.com. Let's talk!
Use Your Tax Refund to Buy A Property: