Souther Accounting

04/20/2023

https://go.usa.gov/xuZCy

Find out about the IRS First Time Penalty Abatement policy and if you qualify for administrative relief from a penalty.

03/06/2023

IRS: May 15 tax deadline extended to Oct. 16 for disaster area taxpayers in
California, Alabama and Georgia
IR-2023-33, Feb. 24, 2023
WASHINGTON- Disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file various federal individual and businesstax returns and make tax payments, the Internal Revenue Service announced today. Previously, the deadline had been postponed to May 15 for these areas.
The IRS is offering relief to any area designated by the Federal Emergency Management Agency(FEMA) L'in these three states. There are four different eligible FEMA declarations, and the start dates and other details vary
for each of these disasters. The current list of eligible localities and other details for each disaster are always available on the Tax Relief in Disaster Situations page on IRS.gov.
The additional relief postpones until Oct. 16, various tax filing and payment deadlines, including those for most calendar-year 2022 individual and business returns. This includes: Individual income tax returns, originallydue on April 18; Variousbusiness returns, normally due on March 15 and April 18; and returns of tax-exempt organizations, normally due on May 15.
Among other things, this means that eligible taxpayers wil also haveuntil Oct. 16 to make 2022 contributions to their IRAs and health savings accounts.
In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until Oct. 16, 2023, to file their 2022 return and pay any tax due.
The Oct. 16 deadline also appliest o theestimated tax payment for thefourth quarter of 2022, originally due on Jan. 17, 2023. This means that taxpayers can skip making this payment and instead include it with the 2022 return they file, on or before Oct. 16.
The Oct. 16 deadline also applies to 2023 estimated tax payments, normally due on April 18, June 15 and Sept. 15. It also applies to thequarterly payroll and excise tax returns normallydueon Jan. 31, April 30 and July 31.

The Governor's office has announced that it will conform to the IRSs postponement of filing
and payment deadlines to October 16, 2023, for taxpayers located in all California counties except the following:
• Imperial; •Kern;
• Lassen;
• Modoc; •Plumas; •Shasta; and • Sierra.
This applies to all returns due prior to the October 16, 2023, deadline. It also applies to any estimated taxes that are due prior to October 16, as well as the March 15 and June 15 passthrough entity elective tax payments.
While the extension applies to payroll tax returns, ti does not apply to employment and excise tax deposits.

04/17/2021

AB 80, the California bill to allow deductions for expenses paid with forgiven PPP debt, has been amended to include significant changes. This bill is not yet final, but here is a summary of the important changes included in the current version:

There is no longer a $150,000 limit on the amount of expenses that may be deducted.
However, to qualify to take the deductions, a business must demonstrate at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. If the entity was not in business during all of 2019, then the business must show a 25% reduction in gross receipts during any quarter in 2020 from the 2019 calendar quarters it was in operation. If the PPP application was submitted on or after January 1, 2021, then the fourth quarter of 2020 may be used as well. If they were in business for all of 2019, they can also compare calendar-year 2019 to calendar-year 2020. This language mirrors the gross receipt reduction requirement for eligibility for second draw PPP loans. However, the bill does not include any of the other restrictions from that provision, such as an employee limit.
Our sources say that this bill should be passed by the Legislature in the next few weeks.

03/31/2021

IRS announces plan to adjust returns for unemployment exclusion (03-31-21)

The IRS will automatically adjust 2020 returns for taxpayers who filed prior to the enactment of the unemployment compensation exclusion included in the American Rescue Plan Act. (IR-2021-71) The returns will be adjusted to exclude up to $10,200 ($20,400 for MFJ) of unemployment compensation for taxpayers with modified AGI of less than $150,000.

The IRS expects that the first refunds will not be issued until May and will continue into the summer. With processing delays at the IRS, it is unlikely that filing an amended return will generate a refund any faster. However, the IRS has confirmed that the automatic adjustments will not increase any other benefits on the taxpayers’ returns that are limited by AGI. As a result, for clients who will benefit from increased Recovery Rebate Credits, Earned Income Credits, etc., you may want to consider amending those returns.

Though the IRS has stated they will also be automatically refunding excess Premium Tax Credits that were paid with 2020 returns, there was no information on those refunds included in this guidance.

03/29/2021

New sales and use tax rates starting April 1, 2021

03/25/2021

Social Security, SSI, SSDI: Stimulus checks for some? Who's delayed, everything to know
Those who receive Social Security benefits, veterans and retired railroad workers are the last major group in line to receive the $1,400 stimulus payment. Why?
The Treasury said that 37 million new stimulus checks for up to $1,400 per person will have gone out this week. But many of the 8 million people who receive Supplemental Security Income, Social Security Disability Insurance and other federal income benefits, like veterans, may still be waiting for their stimulus payment -- including money for dependents. Why? It all comes down to whether or not you used a tool in 2020 and if your details have changed.

"Many federal beneficiaries who filed 2019 or 2020 returns or used the Non-Filers tool were included in these first two batches of payments, if eligible," The Treasury said in a statement Wednesday. "For federal beneficiaries who did not file a 2019 or 2020 tax return or did not use the Non-Filers tool, the IRS is working directly with the Social Security Administration, the Railroad Retirement Board, and the Veterans Administration to obtain updated 2021 information to ensure that as many people as possible are sent fast, automatic payments."

Being on a separate payment track is only one important distinction for SSDI and SSI recipient. For example, you'll also receive your money in a different payment method this time than with the second check (you can calculate how much of the $1,400 your household could get and eventually track your payment here.) The fact that the checks are arriving during tax season could also complicate matters, especially if you gained a new dependent in 2020. If you stopped or started receiving SSI or SSDI in 2019 or 2020, or are missing money from the first two stimulus checks, you could also face another obstacle.

03/23/2021

https://www.sba.gov/funding-programs/loans/covid-19-relief-options/shuttered-venue-operators-grant -header-6

This grant provides emergency assistance for eligible venues affected by COVID-19.

03/18/2021

https://www.irs.gov/coronavirus/economic-impact-payments
Economic Impact Payments | Internal Revenue Service
IRS.GOV
Economic Impact Payments | Internal Revenue Service
We’re committed to helping you get your economic impact, or stimulus, payment as soon as possible. See if you are eligible for an

03/18/2021

California conforms to IRS May 17 extension, and AB 80 update (03-18-21)

The FTB has confirmed that California will follow the IRS filing and payment extension date of May 17, 2021, for individual taxpayers only. Like the IRS extension, the California extension will not apply to the estimated tax Q1 payment date of April 15, 2021. Taxpayers must pay their California estimated tax by April 15, 2021, to avoid penalties.

There is still no news on AB 80, the PPP forgiveness deduction conformity bill. We wait while the state tries to clarify whether we will lose federal funding from the American Rescue Plan Act if California enacts this legislation. Because it’s unlikely, in our opinion, that this will happen quickly, we recommend filing extension vouchers for any affected business and include the estimated state tax on the disallowed deductions.

We will continue to keep you informed if/when any changes happen.