To our Clients and Friends:
We hope everyone is doing well during the sequel to 2020, otherwise known as 2021. In the last year we have been introduced to the FFCRA (Families First Coronavirus Response Act, 3/18/20), CARES Act (Coronavirus Aid, Relief, and Economic Security Act, 3/27/20), Paycheck Protection Program and Health Care Enhancement Act (4/24/20), and the Consolidated Appropriation Act, 2021 (12/27/20). And now comes the American Rescue Plan Act of 2021, already passed by the House and will be voted on in the Senate, likely over the weekend. This is an additional $1.9T bill that has additional stimulus, extended pandemic unemployment, additional child tax credits, additional child and dependent care credits, extension of the Families First Act until 12/31 (also resetting maximum days effective 3/31/21), possible extension to PPP round 2, and extension of the ERTC (Employee Retention Tax Credit) until 12/31/21. There are possible changes to tax laws that could require extensions or amendments to be filed. We hold out hope the IRS will extend the deadline, however we are working towards 4/15 being the deadline and will continue to do so until told otherwise.
There was recently a change made (3/3) to the PPP program for sole proprietors (Schedule C filers) that allow borrowers to base their loan on gross income versus net income, but only if you have not already applied (which we believe is wrong/unfair, but nothing we can do, it appears the government assumes we can all predict the future). The new base loan amount is only related to the owner, not to their employees. This is constantly a moving target and if you think this may affect you, please reach out to us, we are here to assist. I know many have continued to ask about PPP forgiveness and we still want everyone to hold off, there were changes to the PPP being used in conjunction with the ERTC and we just received guidance from the IRS regarding ERTC (a nice 102 page Notice on 3/2). Again, constant changes to these programs makes planning near impossible, we are doing our best to make sure we communicate with everyone. Bottom line is do NOT apply for forgiveness if you have not already done so, there may be other credits available for those that qualify. There are specific guidelines for the ERTC, but we do not want clients to leave potential credits on the table. We are taking notes of clients we think may qualify and will follow up after tax season, nothing for you to do, other than hold off on applying for PPP forgiveness.
For anyone getting notices from the IRS, we recognize the frustration you are feeling, but realize we have the same frustrations. Contrary to media reports, the IRS is months behind. They sent out 2 million incorrect 2019 notices, and this is just the tip of the iceberg. I empathize with the IRS, they are being asked to do a lot of the stimulus, ERTC work and it is added pressure to an already understaffed agency. Imagine that, a CPA giving the IRS the benefit of the doubt, 😉. We all have jobs to do, just like they do and they are being asked to do a lot and were already months behind. Although frustrating for taxpayers and tax professionals, please exercise patience. If you paid them or filed, you will be fine once their systems catch up. I know that is not what most want to hear, but it is the best we have, outside of our control.
We will likely be filing more extensions given the delay in filing and many institutions didn’t have their forms out in a timely manner. Extensions are not a bad thing, they do not cost extra and do not add extra scrutiny to your return. We will do our best to calculate any amounts due (extension of time to file, NOT to pay) and have you send in by the due dates.
This has been a challenging year for our Country, the World, our Clients, and our Firm. We have done our best to stay on top of all the legislation passed, constant changes to the rules, and trying to maintain a “normal” family life. This has been the never ending tax season that started in December 2019 and has not stopped for our Firm or our Staff. We are pushing through to the end, please be patient with us and if we have to file extensions it is not the end of the world, it is normal (Full disclosure: our Firm and one of its Partners whose initials may or may not be EH have filed extensions for at least 10 years). We appreciate all of our clients and their understanding during these crazy times. As much as this has been a tough year, it has been a great learning experience for the accounting profession keeping up with all of the new legislation, programs and rules. We are here for our clients as these changes continue to happen and appreciate your business.
We will send an update of the new bill once it is signed into law and will post an overview on our website.
We appreciate all of you. Stay safe.
P.S. If you have had a good experience with one or more of our staff, let them know. We can’t thank them enough for all of their hard work so sometimes it just sounds better coming from you!