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ppp

SBA Releases PPP Flexibility Act Guidance and Revised Forgiveness Application Form

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ppp

Richard A. Huffman, CPA, MST
Wright Ford Young & Co., CPAs

The Small Business Administration has released additional Paycheck Protection Program (PPP) guidance and revised the forgiveness application form to align with the Paycheck Protection Program Flexibility Act which was signed into law on June 5, 2020. Highlights of the updates are as follows:

1. For non-owners included compensation is 24 weeks of compensation up to $100,000 with a maximum per employee amount of $46,154.
2. For owners (S and C corporation owner-employees, self-employed individuals and general partners) the included compensation is the lesser of 2.5 months of 2019 compensation or $20,833.
3. Employer paid health insurance is only included for non-owners, excluded for all owners.
4. Employer paid retirement plan contributions are included for employees (including S and C Corporation owner-employees) but excluded for self-employed individuals and general partners.
5. Clarified that if less than 60% of the loan proceeds are utilized for payroll costs, the amount qualifying for forgiveness will be incrementally reduced.
6. There is a new EZ application for forgiveness that requires fewer calculations and can be utilized if meet certain criteria.

If you have not yet applied, PPP funds are still available with an application deadline of June 30, 2020.

For additional information or guidance regarding the Paycheck Protection Program, please contact your WFY advisor or contact us here.
© Copyright 2020. All rights reserved.

paycheck protection program

BREAKING NEWS: Significant Taxpayer Friendly Changes to the Paycheck Protection Program.

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Richard A. Huffman, CPA, MST

Wright Ford Young & Co., CPAs

The Senate just passed the House bill, called the Paycheck Protection Flexibility Act which is expected to be signed into law by the president.  The law will extend the Paycheck Protection Program (PPP) loan forgiveness period from eight weeks to twenty four weeks and reduce the payroll forgiveness spend requirement from 75% to 60%.  Loan recipients now have until December 31, 2020 to complete their twenty four week spend period and to meet the restoration of workforce and pay requirements.

However, if at least 60% of the loan is not spent on payroll, there is a cliff effect where none of the loan will be forgiven.  Certain Senators and members of Congress have stated this was not the intent and they are working on a technical correction to allow the bill to restore the previous sliding scale of only partial loss of loan forgiveness if the 60% threshold is not met.

The law provides exceptions for the restoration of workforce requirements to achieve full PPP loan forgiveness if can document a good faith effort for the following:

  1. The inability to rehire individuals who were employees on February 15th
  2. The inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020
  3. The inability to restore business operations to Feb. 15, 2020 levels due to COVID-19 related operating restrictions

For any remaining amount of the loan that is not forgiven, the payback period maybe extended from two years to five years.

Additional guidance is needed from the SBA to clarify certain items in the law, for example, whether the limit of cash compensation per employee would increase in proportion to the increase in the covered period, from $15,385 to $46,153.

PPP funds are still available for eligible businesses who have not yet taken advantage of this program.

Another significant benefit is that the law allows businesses that intend to have a PPP loan forgiven to now qualify to delay payment of their payroll taxes, which was prohibited under the CARES Act.  Businesses should immediately consider deferring payment of the employer’s 6.2% share of 2020 Social Security tax until the end of 2021 (50%) and 2022 (50%).

For additional information or guidance regarding the Paycheck Protection Program or payroll tax deferral, please contact your WFY advisor or contact us here.

© Copyright 2020.  All rights reserved.

two new hires

WFY Welcomes Two New Hires to Audit Department

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This month, Wright Ford Young & Co. is pleased to announce we have two new hires joining our team. Mimi Duong will be joining as an Audit Staff and Lauren Gilmour will be joining as an Audit Intern in our audit department. WFY is pleased to welcome these new hires to our team.

Mimi Duong

At the end of May, Mimi Duong started a position with WFY as Audit Staff.  She will be graduating CSUF later this year with a Business Administration degree with a concentration in Accounting.  In her spare time, she enjoys spending time with friends and family, experimenting with makeup, and trying new foods.

Lauren Gilmour

Lauren Gilmour joined WFY as an Audit Intern in May. She is currently attending USC as a Junior, and this will be her first experience working at a CPA firm.  Other than attending her classes, she loves to hike, go to the beach, and be outdoors.

 

Interested in joining WFY in one of our departments? Please email your resumes careers@cpa-wfy.com or go to our Careers page.

 

gifting

Why Gifting During an Economic Downturn May Be Right for You

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Janelle Tokunaga, CPA, MST

Wright Ford Young & Co., CPAs

 

While it may seem like there has been a shortage of good news lately, we wanted to bring your attention to a few bright spots that have come about during our current economic downturn.  With the extra time you have at  sheltering in place, it may be a good time to revisit your current estate and gift plan.

To recap: the 2020 Federal lifetime exemption is $11.58 million per person, including inflation, and the 2020 annual Federal gift exclusion is $15,000 per donee and donor.  The current economic market is showing decreased values in the public securities arena and lower overall real estate values in light of the COVID-19 environment.

The current lifetime exemption gives you the opportunity to make larger gifts of assets. But when combined with lower current asset values you can gift now with less exemption utilization, it leaves more exemption available for future gifts.  So, now, may be a good time to think about gifting those depressed value assets that are expected to increase considerably in the future. Then, when the markets eventually recovers and your gifted asset values increase, they will already be outside of your taxable estate.

If you aren’t ready to gift assets directly, setting up and transferring ownership of real estate and marketable securities into closely held entities (such as FLPs and LLCs) may be a good option as well.

We encourage you to use this unique time to reflect on your current estate plan. Considering whether gifting is something for you may benefit you and your loved ones now and in the future.  WFY advisors are available to discuss the tax benefits of gifting during our economic downturn and look forward to hearing from you. If you’d like to contact us, click here.

© Copyright 2020. All rights reserved.

coronavirus

Avoid Phishing in the Time of COVID-19

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As the uncertainty of the coronavirus pandemic continues, scammers are using different ways to gather your information and use it for ransom.

Some websites are offering information on COVID-19 relief programs in exchange for signing up through them as a subscription or requesting a fee. With this, the websites hold your basic information ransom and could possibly cause you problems in the near future.

WFY wants to make sure there aren’t any more problems for our clients who are already going through an ambiguous period of time. Fraud will only increase as the coronavirus pandemic goes on. Therefore, we advise you to only work with sources you know are safe and whom you’ve worked with before. On our WFY website, we have provided a COVID-19 relief page with safe links that can help you with any questions on resource programs at https://www.cpa-wfy.com/staging.cpa-wfy.com/dev/covid-19-resources/

If you have any questions or concerns on a COVID-19 relief program, please contact your WFY tax advisor.

coronavirus enacted laws

Summary Analysis of Coronavirus Enacted Laws

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By Richard A. Huffman, CPA, MST

With the recently enacted laws to help companies with the current Coronavirus pandemic, there has been confusion regarding which benefit programs will apply to what companies.

In our efforts to assist you in which benefits can help you and your company, WFY has created a breakdown summary spreadsheet and flowchart below.

 

 

six new hires

Six New Hires Join WFY Team

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Wright Ford Young & Co. is proud to announce we are adding six new hires to our team. We have Cheryl Shelton joining our estates & trusts department, and Brody Alcanter, Marzeh Khanjari, Rajbir Singh, Linh Trinh and Diane Waxler-Milne joining our tax department. WFY is pleased to welcome these new hires to our team.

Cheryl Shelton

In January, Cheryl Shelton started with WFY as an Estates & Trusts Supervisor in our estates & trusts department. She graduated from Cal State Fullerton and continued her education at Western State Law School. Cheryl has worked in accounting for over 15 years. In her spare time, she volunteers with a local dog resue doing adoption events and fostering dogs.

Brody Alcanter

Brody Alcanter joined WFY in January as a Tax Senior. He graduated from Northwood University with a Bachelor’s degree for Business Administration, Accounting, and moved to Orange County shortly after graduating. In his spare time, he enjoys playing golf.

Marzeh Khanjari

In January, Marzeh Khanjari started with WFY as a Tax Senior.  She received her degree in Business Administration with emphasis in Accounting, and has been working as a tax professional for almost 15 years. While she’s away from the office, she likes to travel, watch movies, and play ping pong.

Rajbir Singh

Rajbir Singh joined WFY as a Tax Staff in January.  He graduated from University of California, Riverside, with a degree in Business Administration and Psychology. Rajbir’s hobbies are working out and traveling with his family.

Linh Trinh

Joining us again at WFY as a tax intern is Linh Trin.  She is graduating from Cal State Fullerton this Spring and will become a full-time Tax Staff at WFY after she graduates.  During her free time, she likes to play the piano.

Diane Waxler-Milne

Diane Waxler-Milne joins WFY for this upcoming tax season as a tax intern.  She is currently attending Cal State Fullerton as a senior and will graduate with a Bachelor’s degree in Accounting and Finance. When she’s out of the office and away from school, Diane enjoys time with her husband and three daughters.

 

Interested in joining WFY in one of our departments? f you are interested and qualified for the position above, please email your resumes careers@cpa-wfy.com or go to our Careers page.

 

bruin professionals

Tax Director Melodie Reguero on Tax Planning at Bruin Professionals

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On Wednesday, November 20th, our WFY Tax Director Melodie Reguero presented at the Orange County Bruin Professionals meeting.

Ms. Melodie Reguero spoke on tips about year-end tax planning along with Cheryl Gee from UBS. Year-end tax planning is especially critical this time of year to proactively reduce a taxpayer’s risk exposure and tax liability before the new year. If you are interested in tips about year-end tax planning, read our article on Year-End Tax Saving Moves for Individuals.

Reguero regularly attends Bruin Professionals meetings, which is diverse group of UCLA alumni who are established in business. The group focuses on commerce, camaraderie, and community. They have several chapters spread all over California. If you are interested in learning more about Bruin Professionals, click here.

 

savings

Year-End Tax Saving Moves for Individuals

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Since 2019 is coming to a close now is the time to take action to proactively reduce your tax liability before the new year.

Included are a few strategies that may help with your tax situation:

  1. Harvest stock losses while substantially preserving one’s investment position.  This can be accomplished by selling the shares and buying other shares in the same company or another company in the same industry to replace them, or by selling the original shares then buying back the same securities at least 31 days later.2.
  2. Apply a bunching strategy to deductible contributions and/or payments of medical expenses. The increased standard deduction and limited itemized deduction of state and local taxes to $10,000 will cause many taxpayers to lose the benefit of their itemized deductions.  By bunching multiple years of charitable contributions and medical expenses into one year, a taxpayer may create a taxable benefit that would not otherwise exist.  For example, a taxpayer who expects to itemize deductions in 2019 and usually contributes a total of $10,000 to charities each year, should consider prefunding 2020 and 2021 charitable contributions by contributing a total of $30,000 into a donor advised charitable fund and then distribute the funds to the charities over the following two years.
  3. Take required minimum distributions (RMDs). Taxpayers who have reached age 70-½ should be sure to take their 2019 RMD from their IRAs or 401(k) plans (or other employer-sponsored retired plans). Failure to take a required withdrawal can result in a penalty of 50% of the amount of the RMD not withdrawn. Those who turned age 70-½ in 2019 can delay the first required distribution to 2020, however, this can result in taking a double distribution in 2020 (the required amount for 2019 and 2020).
  4. Use IRAs to make charitable gifts. Taxpayers who have reached age 70-½, own IRAs, and are thinking of making a charitable gift should consider arranging for the gift to be made by way of a qualified charitable contribution, or QCD—a direct transfer from the IRA trustee to the charitable organization. Such a transfer (not to exceed $100,000) will neither be included in gross income nor allowed as a deduction on the taxpayer’s return. A qualified charitable contribution before year end is a particularly good idea for retired taxpayers who don’t need all of their as-yet undistributed RMD for living expenses.
  5. Make year-end gifts. A person can give any other person up to $15,000 for 2019 without incurring any gift tax. The annual exclusion amount increases to $30,000 per donee if the donor’s spouse consents to gift-splitting. Anyone who expects eventually to have estate tax liability and who can afford to make gifts to family members should do so.
  6. Reinvest capital gains in Opportunity Zones.  Capital gains reinvested within 180 days into an qualified opportunity fund allows for federal tax deferral and partial tax exemption and tax free appreciation if held for the required ten year period.

These are broad suggestions that will benefit some but not all taxpayers.  To discuss and create a personalized tax strategy, be sure to contact a WFY tax specialist at info@cpa-wfy.com or (949) 910-2727.

© Copyright 2019. All rights reserved.