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About cbslee

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  1. The House, Senate and the Supreme Court have decided not to participate int the Payroll Tax Deferral.
  2. So far, various news sources have yet to report a single national employer who has opted to participate.
  3. You are correct, the TCJA limited like kind exchanges, which is what a trade-in is, to real property only.
  4. Be careful, if the corporation assumes Sole Prop liabilties which are in excess of the FMV of the Sole Prop assets it will trigger taxable gain, which happened to a new restaurant client of mine years ago.
  5. I have no idea about VA, but in Oregon, the largest home school organizations are state sponsored.
  6. You can also do a Coverdell ESA in addition to the QTP.
  7. There is "no one size fits all" answer to your question. What kind of entity? How many assets? What do you normally charge this client?
  8. One of my clients forwarded an email from U S Bank (5th largest bank ), which said that they wouldn't start accepting forgiveness applications until the end of this month or early next month due to all the changes which are still happening.
  9. Copied from the AICPA: "5 reasons borrowers shouldn’t rush their PPP forgiveness applications Posted by AICPA Communications on Jul 14, 2020 This blog post explains why borrowers shouldn’t rush their PPP loan forgiveness applications. Please share with clients who participated in the program. Borrowers who received Paycheck Protection Program (PPP) loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act are asking their CPAs if and how they will qualify for PPP loan forgiveness. There is uncertainty over some of the program details. Organizations — especially small businesses — worry about meeting the maximizing loan forgiveness requirements. While you may be anxious to apply for forgiveness, here are five factors affecting the forgiveness application process. Most lenders are not ready to process forgiveness applications. Many are developing technology tools such as “forgiveness portals” or will leverage other automation options for a more efficient process. Until the U.S. Small Business Administration (SBA) and the U.S. Treasury Department issue final guidance, those technology tools can’t be finalized. The timing on when that guidance will be available is uncertain. Bank of America, as one example, is telling PPP loan holders it expects to begin opening its online loan forgiveness application process in early August and will email instructions to borrowers when it’s ready. Organizations have 24 weeks to use their PPP money, leaving them more time to take steps that will help them qualify for full loan forgiveness. Borrowers who received their loans before June 5, 2020, can choose either eight weeks or 24 weeks for their covered period. That increased flexibility in the time to use PPP funds can be important in maximizing loan forgiveness. "Payroll costs are a significant component of PPP forgiveness. Many payroll providers are developing custom reports specifically to comply with PPP guidance. However, like lenders, they are waiting on final SBA and Treasury guidance so they can prepare the PPP-compliant reports borrowers will need. Borrowers aren’t required to make any loan payments before they apply for forgiveness or until 10 months after their covered loan period ends. Since payments aren’t due yet, there is less urgency to apply for forgiveness. Applying for forgiveness may be easier than clients expect. Borrowers can use a simplified process through SBA Form 3508EZ if they meet at least one of these requirements: They are self-employed individuals, independent contractors or sole proprietors who had no employees when they applied for their PPP loan and who didn’t include any employee salaries in calculating their average payroll amount in their application. They didn’t reduce salaries or hourly wages for certain employees by more than 25% during the loan period and — except for specified exceptions — didn’t reduce the number of employees or the average paid hours for employees between Jan. 1, 2020, and the end of their covered loan period. They didn’t reduce salaries or hourly wages for certain employees by more than 25% during the loan period and were unable to operate at the same business activity level during the loan period because of federal safety requirements or guidance related to the pandemic. CPAs expect SBA guidance to help determine how broadly this safe harbor can be used. Be prepared While waiting for final program guidance, borrowers can take steps to prepare for the forgiveness application process by documenting how the loan proceeds are used. Gather documentation needed to support non-payroll costs for expenses such as mortgage interest, rent or lease payments and utilities, including account statements and other proof of payments. Lenders may not request supporting documentation for all disbursements as part of the forgiveness application; however, increased scrutiny is guaranteed for loans of $2,000,000 or more. Be patient PPP loans have gone to 4.8 million organizations through June 30, 2020. Recent legislation extended the opportunity for organizations to apply for loans until Aug. 8. While questions remain about some forgiveness process details, CPAs are following developments. It can be difficult to be patient when your organization is affected by the ongoing uncertainty COVID-19 created. But that may be the best approach until the SBA and your lender establish a forgiveness application process. Count on your CPA to continue to be your trusted adviser throughout the process. The AICPA has several Paycheck Protection Program resources available to the public during this challenging time. You’ll find an overview of the PPP loan forgiveness process, answers to frequently asked questions and more. Lisa Simpson, CPA, CGMA, Director — Firm Services, Association of International Certified Professional Accountants" Based on what I learned from my 4th online CPE course about this process, I completely agree.
  10. The employee only has a say if the employer chooses to opt in, due to the way the memorandum and the IRS Guidance is worded.
  11. "The Internal Revenue Service said companies will be responsible for collecting and paying back any deferred payroll taxes under a directive by President Donald Trump aimed at helping workers while the administration and Democrats are stalemated on a stimulus deal. The agency issued guidance Friday that implements Trump’s order to delay the due date for payroll taxes for millions of workers from Sept. 1 through year-end. Come next year, the taxes will need to be paid by April 30, however — unless Congress votes to forgive the liabilities, the release showed. If lawmakers don’t step up, the guidance says employers must withhold the taxes from employees from Jan. 1 through April 30, meaning that workers will have double the deduction taken from their paychecks next year to pay back the deferred portion. Employers “may make arrangements to otherwise collect the total applicable taxes from the employee,” if necessary, the release said. The guidance puts the responsibility on employers for ultimately paying back the levies, and that could cause many to decline putting the extra money in workers’ paychecks — blunting any potential economic or political boost Trump had hoped to reap." This clearly puts the responsibility on the employer to collect all of the deferred taxes plus the responsibility for paying any uncollected deferred taxes.
  12. cbslee

    Delaying RMD

    One argument in favor of taking the RMD is that in the long run it's likely that tax rates are going up due to the huge deficits.
  13. It's the employer's decision whether or not to opt in. The employer's participation is not driven by their employee's desire to have more take home pay.
  14. Both of the payroll software programs that I use, have decided to to make no changes to their programs since so many unanswered questions remain!
  15. "Late on Friday, the IRS issued much-anticipated guidance on the payroll tax deferral that was ordered by President Donald Trump in a presidential memorandum on Aug. 8 (Notice 2020-65). The notice allows employers to defer withholding on affected employees’ compensation during the last four months of 2020 and then withhold those deferred amounts during the first four months of 2021 Under the guidance, employers can defer the withholding, deposit, and payment of certain payroll taxes on wages paid from Sept. 1 through Dec. 31, 2020. The deferral applies to the employee portion of the old-age, survivors, and disability insurance (OASDI) tax under Sec. 3101(a) and Railroad Retirement Act Tier 1 tax under Sec. 3201. The due date for withholding and payment of these taxes is postponed until the period beginning Jan. 1, 2021, and ending April 30, 2021. The deferral applies to any employee whose pretax wages or compensation during any biweekly pay period generally is less than $4,000. The notice defines applicable wages, for these purposes, as: wages as defined in [Sec.] 3121(a) or compensation as defined in [Sec.] 3231(e) paid to an employee on a pay date during the period beginning on September 1, 2020, and ending on December 31, 2020, but only if the amount of such wages or compensation paid for a bi-weekly pay period is less than the threshold amount of $4,000, or the equivalent threshold amount with respect to other pay periods. Amounts excluded from wages or compensation under Secs. 3121(a) or 3231(e) are not included when determining applicable wages. Under the notice, the determination of applicable wages is to be made on a pay-period-by-pay-period basis — meaning that if the amount of compensation payable to an employee for a particular pay period is less than the threshold amount ($4,000 for biweekly pay periods), then the payroll tax deferral applies to that compensation, irrespective of the amount paid to that employee in other pay periods. The notice requires affected employers to withhold and pay the deferred taxes from wages and compensation paid during the period between Jan. 1, 2021, and April 30, 2021. Interest, penalties, and addition to tax will begin to accrue on unpaid taxes starting May 1, 2021. The notice says, that, if it is necessary, employers can “make arrangements to otherwise collect the total Applicable Taxes from the employee” but does not provide details on that requirement. The AICPA, in a letter to Treasury and the IRS on Aug. 12, asked for guidance on many open issues regarding the implementation of the presidential memorandum." In the second sentence the verb "allows" is used not "requires". In the third sentence the verb "can" is used not "must" so it appears that employers compliance is "optional". Then any tax deferred must be collected from the employee(s) from January 1, 2021 thru April 30, 2021. As of May 1, 2021 any uncollected tax starts accruing penalties and interest.. I am sure everyone's payroll software will be reprogrammed and ready to go on Tuesday morning. I will be I will strongly advising my clients not to participate.
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