Archives for Industry News

2021 Payroll Tax and Standard Auto Mileage Rate Changes

Bonnie Thompson   Beginning January 1, 2021, the following changes go into effect for the withholding of payroll taxes and reimbursement of auto mileage. SOCIAL SECURITY The wage base for withholding social security tax has increased to $142,800. The social security tax rate will be 6.2% for both employers and employees for a maximum expense of $8,853.60  For Medicare, the rate is still 1.45% each for employers and employees with no limit this year. Continuing in 2021, employees earning in excess of $200,000 will be subject to a mandatory additional 0.9% medicare tax withholding regardless of their individual tax filing
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Categories: Industry News and Newsletter and Updates.

New COVID Relief Bill Signed Into Law

Richard A. Huffman, CPA, MST Tax Partner   The House and Senate passed the Consolidated Appropriations Act, 2021 (CAA, 2021) which is expected to be signed into law by the President. The CAA, 2021 bill includes the renewal and expansion of popular provisions in earlier COVID relief bills with the significant provisions summarized as follows: Paycheck Protection Program (PPP) forgivable loan expenses allowed as a tax deduction (overriding IRS ruling disallowing the deduction). Uncertainty remains whether California and other states will conform. Reopen PPP for first time borrowers who have not yet applied or who previously withdrew their application. Second
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Categories: Industry News and Newsletter and Updates.

New California Sales Tax Relief Announced for Small Businesses

Ryan Working, CPA, MST Tax Director   Back in April 2020, the Governor allowed taxpayers to apply for sales tax penalty and interest relief for 90 days for any taxpayer reporting less than $1 million in sales on their sales tax return. The Governor has now directed the California Department of Tax and Fee administration (CDTFA) to provide additional and expanded temporary tax relief for eligible small businesses impacted by COVID-19.   This temporary relief includes the following: Automatic three-month sales tax extension for taxpayers filing less than $1 million in sales tax. Interest and penalties will not accrue on the
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Categories: Industry News and Newsletter and Updates.

Applying and Qualifying for CA Small Business Hiring Tax Credit

Cameron Lee Tax Staff   Applications have recently opened on December 1st, 2020 to apply for California’s small business hiring tax credit. This past September, Governor Gavin Newsom signed SB 1447 allowing qualifying small business owners to claim a $1,000 credit for each net increase in monthly average employees. Each employer is limited to no more than $100,000 total credit under this program. In order to qualify for the credit, taxpayers must meet the following: Have 100 or fewer employees on December 31, 2019 (all employees, including part-time employees). Have experienced a 50% decrease in gross receipts from April to
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Categories: Industry News and Newsletter and Updates.

CA Proposition 19 and the Qualified Personal Residence Trust

Nancy Van Lanen, CTFA, EA Estate & Trust Director   The recently passed Proposition 19 in California provides expanded property tax benefits by allowing homeowners who are disabled, over 55 years of age, or whose homes were damaged in wildfire or other natural disasters, to transfer their property tax base value to a replacement residence of any value anywhere in the state.   This new law becomes effective on April 1, 2021. However, Proposition 19 limits the availability of the parent-child exclusion for purposes of real estate tax assessments.  It now requires inherited homes that are not used by the child
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Categories: Industry News and Newsletter and Updates.

PPP Loan Forgiveness Taxability in 2020

Richard A. Huffman, CPA, MST Tax Partner Tony Maldonado, CPA Tax Senior   While the current law states forgiven Paycheck Protection Program (PPP) loans are tax-free, the Internal Revenue Service previously issued guidance stating that the qualifying expenses paid with the forgiven loan funds are nondeductible for income tax purposes.  There has been uncertainty as to whether the qualifying expenses would be non-tax deductible when paid in 2020 or when the loan is forgiven which could go into 2021. The IRS just recently released awaited guidance stating if your business received a PPP loan and there is a reasonable expectation
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Categories: Industry News and Newsletter and Updates.

Year End Estate and Gift Tax Planning Action to Consider Taking

Angela Tang, CPA Estate and Trust Supervisor   Election day on November 3rd is upon us, and the outcome may determine the future landscape for Estate and Gift Tax policy for next year and beyond.  High Net Worth Individuals (HNW) should consider the potential changes for individual lifetime estate and gift tax exemption amounts and take appropriate actions to meet their individual estate tax planning goals.  Currently, individuals are able to gift or bequest $11.58 million, free of estate and gift taxes, to their beneficiaries.  The amounts will sunset after 2025 to $5 million (inflation indexed) as part of the
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Categories: Industry News and Newsletter and Updates.

Non-Deductibility of PPP Related Expenses to the Extent of Forgiven PPP Funds (IRS Notice 2020-32)

Janet Kim, CPA, MST Tax Director   The IRS released Notice 2020-32 on April 30, 2020, which provides guidance on the deductibility of expenses paid with Paycheck Protection Program (PPP) loan proceeds that are forgiven and excluded from the borrower’s income. The IRS has determined otherwise deductible expenses that are paid with PPP funds may not be deductible for federal income tax purposes to the extent the expenses were reimbursed by a PPP loan that was then forgiven. The PPP was created by Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Under the PPP, the
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Categories: Industry News and Newsletter and Updates.

Business Transition Preparedness Post COVID-19

During the ongoing management of COVID-19 restrictions, we are all trying to determine and assess the short- and long-term damage on businesses, the economy, and the capital markets. While we don’t pretend to have answers better than others, we would like to share our thoughts on the impact of the virus on M&A transactions. First off, we don’t want to trivialize the health impact imposed by the pandemic nor the human element of lost jobs, life disruptions, and family separations. Our intent is to provide our strategic thoughts while we try to maintain a sense of normalcy. Prior to the
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Categories: Industry News and Newsletter and Updates.

Learn the Business Benefits of the CARES Act

Our WFY Tax Partner, Richard Huffman, has created a 15-minute video presentation to illustrate the benefits your business may qualify for under the CARES Act.  Included are the Paycheck Protection Program Loans, Employee Retention Credit and deferral and income tax benefits. Watch the video to learn which benefits apply to you. Please contact your WFY advisor to discuss how your business can benefit from these programs or you can contact us here.  
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Categories: Industry News and Newsletter and Updates.