Regina Bianucci Rus CPA

11/18/2021

Get ready to file your taxes. See tips that can make filing taxes easier next year. Learn about tax law changes, how to view your tax account information online, and ways to get help.

09/03/2021

AB 150 also creates two new hiring credits to small businesses impacted by COVID-19 and to businesses that hire homeless individuals.

The Main Street Hiring Credit is reenacted from last year's credit. There are modifications that allow more businesses to qualify, and the amount of the credit is increased. The credit is claimed against the taxpayer's personal income tax or corporation's franchise tax, or at the election of the taxpayer, against state sales and use taxes. The business must employ fewer than 500 employees and experienced a 20% or more decrease in gross receipts when comparing 2020 and 2019 calendar year. (In 2020, the credit was limited to businesses with fewer than 100 employees that experienced a drop of 50% gross receipts.)

This credit must be reserved during the period November 1, 2021 and ending the earlier of November 30, 2021 or once the maximum $70 million of tax credits are allocated. There will be a credit reservation system on the CDTFA website. https://www.cdtfa.ca.gov/

https://www.ftb.ca.gov/file/business/credits/main-street-small-business-tax-credit-II.html

09/01/2021

California New Pass-through Entity Law saves Federal Taxes and other state opportunities (AB150)

To help California taxpayers navigate the $10,000 limitation on SALT state and local taxes, a new pass-through entity tax can be used to reduce federal tax.

For 2021 through 2025 taxable years (the years remaining on the $10,000 limitation), a qualified S corporation, partnership or LLC taxed as a partnership or S corporation, that is doing business in California and required to file a California return may elect to pay a pass-through entity tax equal to 9.3% on its qualified net income. This will decrease the federal net income included on the owner's Schedule K-1.

The consenting pass-through entity owners may also claim a nonrefundable credit on the California return for the amount of tax paid on the owner's distributive share of the pass-through entity's net income. The credit is allowed in full for nonresidents and pert-year residents, and no proration is required. Unused credits may be carried forward for up to five years.

08/27/2021

Still waiting for the Infrastructure bill that will include more tax changes

While Congress still works on a bi-partisan infrastructure bill dubbed the INVEST in America Act, and contemplates new spending on highways, bridges, waterways, transit, airports, the electric grid and broadband, we wonder about how it will be funded.

Although there is nothing published yet and Congress has yet to begin debate, there are tax and non-tax revenue raisers under consideration. Non-tax offsets for the additional spending include rescinding unused funding from COVID-19 relief bills, delaying a scheduled change in Medicare prescriptions drug rebate rules and projected revenue gains generated from the expected economic growth effects of infrastructure improvements.

Tax offsets include a new cryptocurrency information reporting requirement, so beware if you are buying and selling! Another tax offset includes sunsetting the COVID-19 employee retention tax credit after September 30, 2021. This payroll tax credit has been lucrative to businesses that qualify, and it is also complicated. A good payroll service like Paychex or ADP can provide the guidance you need.

We still expect tax reform for corporations and "tax fairness" for high-income individuals. The IRS could still see more funding to beef up enforcement and hopefully improve its technology. On tax changes, we can expect changes to the Section 199A 20% deduction for certain pass-through business income, and modification of carried interest income by investment fund managers.

06/17/2021

Time for Change... it's in the air
In my tax practice, I talk to people not just about their current year tax return and getting it done, but about their plans, what they are thinking about, and changes they plan to make.

I've concluded that it is a time for change. As we all recover from the pandemic crisis, individually and as a community and world, people are making plans for change.

Some of you have already set this in place. There were a number of clients that already moved - out of state. Some are living in two places, and one of those places is out of state. So many questions are popping up - where is my tax home?

Businesses are closing down, some are starting up. How do I do that? How should I run this new business?

I can help with your questions. This is the reason I'm in business - to help people with their income tax needs but also to PLAN.

Here are some resources to help with some of these questions -

2020 Guidelines for Determining Resident Status (CA) 2020 Publication 1031 Guidelines for Determining Resident Status

Closing a California Business Entity - Closing a California Business Entity | FTB.ca.gov

Tax Information for Businesses - https://www.irs.gov/businesses

Once a client moves out of California and establishes residency in another state, I will ask you to find another tax preparer. Each state has different conformity to federal tax law and other differences from California state tax law. Did you know that some states tax unemployment and social security income? California does not. Other states have different business tax returns to file, and some states even have city income tax.

06/16/2021

CalSavers deadline June 30 and a repeat of Upcoming Advance Child Tax Credit Payments & Due Dates

June 30 - If your business employs more than 50 employees and does not have an employer-sponsored retirement plan, the deadline to sign up with CalSavers is June 30, 2021.

Your business can avoid CalSavers if it implements its own retirement plan. Contact me if you have questions, or your payroll company. A SIMPLE IRA or 401K plan allows for deferral of taxes by the employee. A CalSavers plan is more of a ROTH IRA type plan and no tax deduction is allowed for the contribution. (There are advantages to a ROTH, but that is for a separate conversation.)

06/16/2021

Upcoming Advance Child Tax Credit Payments & Due Dates

June 15 - Second quarter estimates are due - Please pay on-line if you can and send me your e-mail confirmation of the payment. The number one reason for a tax notice once your tax return is filed is that the estimated tax payments you thought you made don't line up with the ones you did really make. Let me help you with this! If you send me the confirmation, I can place it in your current year folder which saves you having to find them later.

July 15 - Advance Payments of the 2021 Child Tax Credit for eligible taxpayers begins - https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021 The increased credit is $3,000 per qualifying child between ages 6 and 17 at end of 2021 or $3,600 per qualifying child under age 6 in 2021 (up from $2,000). Advance payments will be up to 50% of the expected tax credit and are estimated from information included in eligible taxpayers' 2020 tax returns (or 2019 if 2020 is not filed and processed yet).

Portal to decline Advanced Payments open by July 1 - You might want to DECLINE the advanced payment!! Maybe you are divorced and claimed your one child in 2020, but you won't in 2021 (your ex-spouse will if taken in alternate years). Maybe your 2020 income would make you eligible for the larger tax credit but not in 2021. Will your income be over $150,000 (married taxpayers filing joint return) or $112,500 (heads of household) or $75,000 (filing single)? The IRS will provide more information about advance payments soon. This advanced credit will be paid back if you are not eligible in 2021.

August 15 - Time to reassess your 2021 estimated taxes. If your income or deductions have changed from 2020, and the estimated tax payments I provided you were based on 2020 taxable income, it is time to re-evaluate before the 3rd quarter estimate (due Sept 15). Please contact me by August 15 if you need to review your 2021 estimated taxes.

At any time of year we can check your 2021 tax withholdings to ensure they are adequate to cover your taxable income. Checking too late in the year leaves you with little time to make small and more comfortable adjustments.

06/16/2021

Biden unveils tax plan
There are 3 tax proposals that could change income tax, corporate tax, and estate and gift transfer tax in 2022.

The American Families Plan - Individual income tax changes that include:

>> Increase in top rate from 37% to 39.6%.

>> The capital gain rate could increase for taxpayers with adjusted gross income over $1 million by taxing long-term capital gain and qualified dividends at ordinary rates.

>> Estate and gift transfers would tax the donor or deceased owner of an appreciated asset at the time of transfer (when the donor gifts the asset, or the deceased person passes the asset to a beneficiary). The asset's fair market value that exceeds basis would be taxed on the date of gift or date of death. (Planning through trusts is something to consider now, contact me or your trust and estate attorney.)

>> Like-kind exchanges - Deferral of gains on like-kind exchanges would be capped at $500,000 for each taxpayer ($1 million for married taxpayers filing jointly) annually.

>> For taxpayers whose adjusted gross incomes exceed $400,000, there could be higher net investment income tax or self-employment taxes. This could subject S corporation owners to self-employment tax on their distributive share of S corporation income (the pass-through income taxed in addition to the compensation paid) if the partner materially participates in the business.

The American Jobs Plan would increase C corporation tax rate from 21% to 28% and create a corporate minimum tax.

The third proposal called the Made in America Tax Plan contains other corporate provisions.

We think these tax changes would not be effective until 2022, if passed. Early discussions will be beneficial to plan.

04/21/2021

Read about: Common tax issues that lead to an audit on my website here: https://www.rbrcpa.com/news-updates

04/21/2021

May 17, 2021 - the real Tax Day
Here is what is due May 17 -

** Your 2020 Personal tax return (Form 1040 and CA Form 540)
** Taxes due for 2020
** IRA contribution
** Health Savings Account contribution
** Superseding returns that correct a previously filed 2020 tax return (omitted Schedule K-1, deduction not reported)

Why May 17 and not May 15? Because if a deadline falls on a weekend, it is automatically bumped to the next Monday.

Should we get used to these delayed Tax Days? No, I don't think so. The IRS didn't give up on the April 15 due date for 2021 first quarter estimated taxes.

Do you have a deadline for tax information to file a return by May 17? No, because I have enough work in the office to keep me busy until then. If you are providing your tax information to me now, expect an extension.

For individuals who receive a Schedule K-1 from their pass-through entity (LLC, S corporation) that is extended only because of the state non-conformity to PPP expense deductibility, there is good news and possibly bad news. The state is set to finally conform but only for businesses that can demonstrate a 25% reduction in gross receipts (comparing 2020 to 2019). That means if your business took a PPP loan for under $150,000, and did not have this reduction in gross receipts, the expenses paid with the PPP loan (salary, primarily) will be added to your state taxable income. The federal return allows for the deduction. Neither the state or the IRS will tax the loan forgiveness income.

I hope to be able to file all individual returns for LLC members and S corporation shareholders once this law is final, hopefully by May 17.

03/04/2021

A few pointers to prepare your return promptly and accurately:
> Complete your tax organizer
> Include both stimulus checks received (even if in 2021) or be clear you receiving nothing
> If you bought, held or sold virtual currency, please let me know!
> If you ever applied for a PIN with IRS (personal identification number), be sure to log onto the IRS website and obtain your 2020 specific PIN, last year's PIN won't work and IRS may not have mailed you the annual notice.

Here are the links to pay taxes on-line:

https://www.irs.gov/payments https://www.ftb.ca.gov/pay/index.html

Pay your taxes, view your account or apply for a payment plan with the IRS.

03/03/2021

Marin County Small Business Fund Application Period Open Until March 15:
Qualified small business owners in Marin County may apply to receive a portion of $915,000 in federal relief funding targeted to businesses hit hard by the COVID-19 pandemic. The money will be in the form of grants of no more than $10,000 and interest-free loans of no more than $50,000.

As recommended by the Marin County Community Development Agency, 27% of the Marin County Small Business Fund will be targeted for businesses in or near Novato. Funding distribution is tied to coronavirus infection rates throughout the county. Businesses will be selected by a lottery because of the expected high demand for assistance and forms must be submitted by March 15.

Need help completing an application? Contact Marin SBDC Small Business Development Center at 415.482.1819.

Get the most up-to-date info from SBA, info on new grants and other important news to help you through COVID-19. NEWSLETTER SIGNUP