Lee B

I have a foggy memory that the biggest issue is that the way it's disbursed may affect the way it's reported on the FAFSA affecting the amount of financial aid ?

I can see that the details of your post makes sense, but I don't think what you propose passes the "exclusive use test".

Copied from IRS eNews; " Update on $500 per child payments for federal beneficiaries To help people who were unable to provide their information in time to receive Economic Impact Payments for their qualifying children, the IRS announced that federal beneficiaries who did not register to receive $500 per child payments earlier this year now have additional time. If eligible, anyone who registers using the Non-Filers: Enter Info Here before the 3 p.m. E.T. Nov. 21 extended due date will receive an EIP. This includes federal beneficiaries who already received an EIP but did not receive a supplemental $500 payment for qualifying children."

What are you trying to accomplish? Do you want it to be a gift or not?

You may have a problem, because under current law, employees can no longer claim home office use as a misc itemized deduction on Schedule A. In order to deduct home office for your freelance work, you have to meet the "exclusive use test". So the question is if you use the same space for both functions, have you blown the "exclusive use test" requirement?

Copied from the Journal of Accountancy: "When reporting total Social Security wages paid to an employee on Form W-2, Wage and Tax Statement, employers who deferred the employee portion of Social Security tax should include any wages for which the employers deferred withholding and payment of employee Social Security tax in box 3, “Social Security Wages,” and/or box 7, “Social Security Tips.” Employers should not include in box 4, “Social Security Tax Withheld,” any amount of deferred employee Social Security tax that has not been withheld. Employee Social Security tax deferred in 2020 under Notice 2020-65 that is withheld in 2021 and that was not reported on the 2020 Form W-2 should be reported in box 4, “Social Security Tax Withheld,” of Form W-2c, Corrected Wage and Tax Statement. On Form W-2c, employers should enter tax year 2020 in box c and adjust the amount previously reported in box 4 of the Form W-2 to include the deferred amounts that were withheld in 2021. All Forms W-2c should be filed with the Social Security Administration, along with Form W-3c, Transmittal of Corrected Wage and Tax Statements, as soon as possible after the employer has finished withholding the deferred amounts. These rules will be in the 2021 General Instructions for Forms W-2 and W-3 (which will be published in January 2021). The IRS says that Forms W-2c should also be furnished to employees." Having to file a W-2c for every employee who has deferred a portion of their 2020 SS, which then is withheld in 2021 is just insane! What a mess! I am so glad I don't have any payroll clients who are doing this.

Whether there is 6 or 11 counties the same logic applies. There was a thread about a month ago discussing the topic, if you want more information.

You don't. The IRS will handle it automatically based on your client's zip code being within one of the 6 qualifying Oregon counties.

I am curious. Is Google Voice easy to use. If you get a call, is it easy to tell which line is active ?

Just Google "Reimbursement of employee phones" and you will find lots of stuff

When I first read your post, I agreed with what you said. But after thinking about it, I think that it's quite likely that a law will be passed next year that will make the these expenses deductible. Second how do you record forgiveness income as of 12/31/20 if the application hasn't been filed? Third, where do you show nontaxable forgiveness of debt income on the tax return?

Last year or the year before the IRS decided that when an employer pays for a cell phone and the monthly bill, that the personal usage by an employee was no longer taxable. Unfortunately, this is not your client's situation. Other nontaxable items are one time payments like Safety Awards or the proverbial "Thanksgiving Turkey" Your client's socalled stipend is not one time but monthly so from my point of view this is taxable income. Actually many years ago I was an Accounting Supervisor for a good sized Forest Products Company, who would buy a truckload of frozen turkeys and then give them out to the employees.

I wouldn't do that. What you have is a M-1 adjustment, a Book Tax Difference. No changes on the Books.

Since the expenses paid by the forgiven PPP Loan are 2020 expenses, what I am trying avoid is having to go back and amend 2020 by extending and delaying the filing of 2020 tax returns.

I have advised my clients with PPP loans of the taxation problem. My advice to them is to plan on waiting until next year since they have 10 months from the end of their expense window before they have to apply. Hopefully legislation will be passed to resolve this problem. This may also require their tax returns to go on extension, so that we know exactly what we're dealing with before we file.

I don't get it, what's the point of this supposed fictitious scenario?

Why would you draw any salary without the funds to cover it? There is one simple answer, wait until the 150K payment arrives before drawing any salary.

On September 16th the IRS extended any tax returns and tax payments due on October 15th to January 15th for residents and businesses in the 6 Oregon counties affected by wildfires. The extension was automatic for all zip codes located within the 6 designated counties.

I have never done this, but supposedly your client can pay thru via his bank via an ACH credit.

Setting up EFTPS is much easier than it used to be.

Call the Taxpayer Advocate Service, this is the kind of stuff they help to resolve.

Last year Form 1040 efiling shutdown on the 16th of November.

Remember, this was the result of the lawsuit saying that the fee constituted a tax not authorized by Congress. The U S District Court agreed and as a result the fee was zero while the ruling was appealed up to the U S Court of Appeals which said the IRS could only charge a fee to recoup the cost of administering the PTIN Program and sent the case back down to the U S District Court to decide the amount of the fee allowed. The current fee is the result of all of the legal wrangling.

Current estimates are that the IRS still has a backlog of 2.5 million unprocessed paper filed 2019 Form 1040s.

The election is on the forgiveness application.