Lee B

IRS Announcement dated January 13, 2021: "The IRS is now opening mail within normal time frames. The IRS has also made significant progress in processing returns. As of December 25, 2020, we had 6.9 million individual tax returns in the processing pipeline. For refunds that could not be issued in 2020 because the tax return is being corrected, reviewed or awaiting correspondence from a taxpayer, the refund will be issued as a paper check in 2021 per our normal processes. Taxpayers are encouraged to continue to check Where’s My Refund for their personalized refund status. How long you may have to wait: It depends on where you sent your tax return and where it is in the process. In some locations, we are caught up or almost caught up. In other locations we are processing returns we received over the summer due to the extended July 15 tax filing due date and, in some cases, are processing tax returns dated as early as April 15, 2020. However, we are rerouting tax returns and taxpayer correspondence from locations that are behind to locations where more staff is available, and we are taking other actions to minimize any delays. Tax returns are opened in the order received. As the return is processed, it may be delayed because it has a mistake, is missing information, or there is suspected identity theft or fraud. If we can fix it without contacting you, we will. If we need more information or need you to verify that it was you who sent the tax return, we will write you a letter. The resolution of these issues depends on how quickly and accurately you respond, and the IRS staff trained and working under social distancing requirements to complete the processing of your return. What you should do: Other than responding to any requests for information promptly, there’s no action you can take. We’re working hard to get through the backlog. Please don’t file a second tax return or contact the IRS about the status of your return."

There were still 6.9 million unprocessed individual returns as of Dec. 25, according to the IRS. Some were filed as far back as April, according to the National Taxpayer Advocate’s annual report to Congress."

When I was still using ATX, in this situation I would have to delete the efile form, recreate the efile form, then it should go thru.

I think the SBA 's FAQs may address this issue.

Yeah, I saw that announcement when it came out. My main hesitation is that it only good for 12 months and you have to reapply every January, which has it's pros & cons

I expect we will find out when the IRS makes makes it's regular weekly announcements on Friday.

Copied from the IRS FAQs: 55. Should Eligible Employers withhold federal employment taxes on qualified leave wages paid to employees? (updated November 25, 2020) Yes. Qualified leave wages are wages subject to withholding of federal income tax and the employee’s share of social security and Medicare taxes. Qualified leave wages are also considered wages for purposes of other benefits that the Eligible Employer provides, such as contributions to 401(k) plans. In other language, the FFCRA specifically says that double dipping is not allowed.

The IRS started accepting efiled 1099s on the 8th, so the problem may be with your software provider.

What is "Medishare", all parts of Medicare are deductible as SEHI?

Sounds just like California

Yes it is a double dip, which the Consolidated Appropriations Act made legal.

1. Be very careful with EIDL Loans, There are a lot of very restrictive covenants that could hamstring a business. 2, Yes you can do both a PPP Loan and the retention credit, but you have to really thread the needle to make them both work together. 3. I have one client who qualifies for a second PPP Loan, which we are seriously considering since it offers the most flexibility.

Depends on when they passed away

Best to wait until 1040 efile reopens in about 3 weeks, otherwise you will be waiting until sometime this summer

Don't ATX programs install a server even on standalone computers?

The IRS will begin accepting business returns on Friday, January 8, 2021. Forms 1120, 1120S, and 1065 can be transmitted to Drake after installing the Drake Tax 2020 January release. E-File for form 990 will be enabled as soon as development and testing is complet

I pay $ 340 a year for $ 250,000 of coverage thru Hiscox.

I have a refurbished Acer Laptop and a refurbished Dell Optiplex Desktop and I haven't had any problems. From what I have read, most refurbished items are subject to fairly extensive testing before they're sold.

Copied from the CPA Practice Advisor( includes a bit of helpful commentary ): "The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 is a $900B relief package to deliver a second round of economic stimulus for individuals, families, and businesses. The package provides relief through multiple measures and expands many of the provisions already put into place under the CARES Act. Below are some of the higher-impact items, more important elements of each provision and key callouts critical to tax professionals. Additional Round of Economic Impact Payments (EIP) Direct payments $600 per eligible family member $1,200 for married filing joint returns $600 per dependent child under 17 years’ old Credit phase-out starting at $75,000 of modified adjusted gross income ($112,500 for head of household and $150,000 for married filing joint). Advance payments are based on information on 2019 tax returns. Taxpayers without a social security number are not eligible. If the credit determined on the taxpayer’s 2020 tax return exceeds the amount of the advance payment, the taxpayer will receive the difference as a refundable tax credit. Taxpayers who receive an advance payment that exceeds the credit do not need to repay the amount. Key takeaway: This measure provides additional, much needed financial assistance for Americans impacted by the global pandemic. Unemployment Insurance Additional $300 per week for all workers receiving unemployment benefits, from December 26, 2020 to March 14, 2021. Extends and phases out PUA, a temporary federal program covering self-employed and gig workers, to March 14 (after which no new applicants) through April 5, 2021. Provides additional weeks for those who would otherwise exhaust benefits by extending PUA from 39 to 50 weeks — with all benefits ending April 5, 2021. The bill also provides an extra benefit of $100 per week for certain workers who have both wage and self-employment income but whose base UI benefit calculation doesn’t take their self-employment into account. Key takeaways: The extension was critical in preventing as many as 14 million Americans from losing this economic lifeline at the end of the year. Tax professionals can help their clients stay up to date on state’s guidelines. Paycheck Protection Program Loans Businesses are now allowed to deduct expenses associated with their forgiven PPP loans. The new law provides $284.45 billion to reopen and strengthen PPP for first and second time borrowers and reauthorizes the program through March 31, 2021. Develops a process for a small business to receive a second PPP if the small business has less than 300 employees and can demonstrate a revenue reduction of 25 percent. Creates a simplified PPP loan forgiveness application for loans under $150,000 whereby the borrower signs and submits a one-page certification that requires the borrower to list the loan amount, the number of employees retained, and the estimated total amount of the loan spent on payroll costs. Expands the list of eligible expenses to include covered operations (software, cloud computing and other human resources and accounting needs), PPE, covered supplier costs and damage costs due to public disturbances. Repeals the CARES Act provision that requires borrowers to deduct their EIDL Advance from their PPP loan forgiveness amount. Key takeaways: Tax professionals can help their clients to determine PPP loan and forgiveness eligibility and with applications. Tax professionals can encourage their clients to keep all PPP funds separate and to keep important records. Economic Injury Disaster Loan (EIDL) Advance Program The new law provides $25 billion to restart and extend the EIDL Advance Grant for small businesses in low income communities. Creates a process for existing EIDL Advance grantees that received less than $10,000 to reapply for the difference between what they received and the maximum EIDL Advance Grant of $10,000. Extension of the Employee Retention Credit Beginning on January 1, 2021 and through June 30, 2021, the provision: Increases the payroll tax credit rate from 50 percent to 70 percent of qualified wages. Expands eligibility for the credit by reducing the required year-over-year gross receipts decline from 50% to 20% and provides a safe harbor allowing employers to use prior quarter gross receipts to determine eligibility. Increases the limit on per-employee creditable wages from $10,000 for the year to $10,000 for each quarter. Increases the 100-employee delineation for determining the relevant qualified wage base to employers with 500 or fewer employees. Employers who receive Paycheck Protection Program (PPP) loans may still qualify for the ERTC with respect to wages that are not paid for with forgiven PPP proceeds. Key takeaways: The extension of this tax credit will help keep additional U.S. workers on payroll and more small businesses and nonprofits across the country afloat. Tax professionals can help their clients determine whether to take the Employee Retention Credit or a Paycheck Protection Program loan. Special lookback for Earned Income Credit and Child Tax Credit Special temporary rule allowing lower-income individuals to use their earned income from tax year 2019 to determine the Earned Income Tax Credit and the refundable portion of the Child Tax Credit (i.e., the Additional Child Tax Credit) in the 2020 tax year. Key takeaway: This will help workers who experienced lower wages this year, due to the pandemic, to get a larger refund that is consistent with their earnings from prior filing seasons. Eviction Moratorium and Rental Assistance The bill extends the moratorium on evictions under the CARES Act, designed to protect renters from eviction, until January 31, 2021. Families struggling to pay rent or with past due rent will be able to get assistance with paying past due rent, future rent payments, as well as utility bills. Miscellaneous provisions A 100% deduction for business meal food and beverage expenses provided by a restaurant that are paid or incurred in 2021 and 2022. Currently, the deduction is available for only 50% of such expenses. Extends the non-itemizer charitable deduction for 2021 and increases the maximum amount that may be deducted to $600 for married couples filing a joint return (while non-married filers or married filers who file separately are limited to $300). For 2020 and 2021, the percentage limit rules for individuals making cash charitable contributions do not apply. (i.e. you don’t need to apply the 60% AGI limitation) Further flexibility for taxpayers to rollover unused amounts in their health and dependent care flexible spending arrangements from 2020 to 2021 and from 2021 to 2022. Permits employers to allow employees to make a 2021 mid-year prospective change in contribution amounts. College students and parents with federal student loans will receive an additional extension on student loan payments, and will not be required to make payments on Federal Student loans until April 1, 2021. This includes both principal and interest payments. Contractors who were temporarily unable to work due to facility closures and other restrictions will be able to receive reimbursement for paid leave from federal agencies. Extender provisions The 7.5% adjusted gross income limit (instead of 10%) pertaining to the medical expense deduction has been made permanent. The higher learning tuition deduction is made permanent by increasing the phase-out limits in the permanent lifetime learning credit. The exclusion from gross income of discharge of qualified principal residence debt has been extended through 2025 (was due to expire at the end of 2020). The maximum acquisition debt limits are reduced from $2 million to $750,000 (from $1 million to $375,000 for married filing separate returns). The treatment of mortgage insurance premiums as qualified residence interest has been extended for one year through 2021 (was due to expire at the end of 2020). The nonbusiness energy property credit for qualified energy improvements to a principal residence has been extended for one year through 2021 (was due to expire at the end of 2020). Conclusion This $900B relief package delivers a second round of economic stimulus, expands on CARES Act provisions, and provides additional relief through multiple different measures. To help your clients stay on top of these changes, and to take advantage of the right provisions offered, set up a meeting to formulate a plan soon. It is essential to communicate the applicable changes to your clients at the right level."

This is the most current IRS update, dated 12/1/20: "The IRS has made significant progress opening backlogged mail. While, as of November 24, 2020, we had 7.1 million unprocessed individual tax returns and 2.3 million unprocessed business returns, the IRS expects to issue all refunds for 2019 individual tax returns in 2020 where there are no issues with the return. For refunds that cannot be issued in 2020 because the tax return is being corrected, reviewed or awaiting correspondence from a taxpayer, the refund will be issued as a paper check in 2021 per our normal processes. Taxpayers are encouraged to continue to check Where’s My Refund for their personalized refund status. How long you may have to wait: It depends on where you sent your tax return and where it is in the process. In some locations, we are caught up or almost caught up. In other locations we are processing returns we received over the summer due to the extended July 15 tax filing due date and, in some cases, are processing tax returns dated as early as April 15, 2020. However, we are rerouting tax returns and taxpayer correspondence from locations that are behind to locations where more staff is available, and we are taking other actions to reduce this backlog. Tax returns are opened in the order it is received. As the return is processed, it may be delayed because it has a mistake, is missing information, or there is suspected identity theft or fraud. If we can fix it without contacting you, we will. If we need more information or need you to verify that it was you who sent the tax return, we will write you a letter. The resolution of these issues depends on how quickly and accurately you respond, and the IRS staff trained and working under social distancing requirements to complete the processing of your return. What you should do: Unfortunately, other than responding to any requests for information promptly, there’s no action you can take. We’re working hard to get through the backlog. Please don’t file a second tax return or contact the IRS about the status of your return."

Don't know if this still applies, but I remember when I was still using ATX, that sometimes I had to go back to the prior year and update forms on returns in order for the rollover to come across correctly.

Don't think that will be a problem, since for some unknown reason the last day the IRS will be mailing checks and initiating direct deposits will be January 15th. Everyone else who qualifies will have to claim it on their 2021 tax return.

Yes, this is new and also I believe temporary for tax year 2020 only. I haven't seen any additional commentary on this.

Well on a more upbeat note, I feel prepared and ready to go

Tom, hopefully, this is one of those times that will open the doors to other opportunities.