JFS LLC Interpretation of the CARES Act

JFS LLC Interpretation of the CARES Act

JFS LLC Interpretation of the CARES Act

Last week the US Government passed an act that offers incentives, loans, grants, and tax changes to individuals and businesses. Below is a brief summary of the act. If you have any questions, please feel free to reach out to the JFS team and we can assist.

Loans:

There are four loans that became available through the Act. These are listed below. Each of these loans has different requirements, calculations and ramifications. If you are interested in any of these loans and would like assistance in the application process, please feel free to contact the JFS office.

  • PPP – Paycheck Protection Program
    • This is a program offered through different lenders that are approved by the SBA. It is calculated based on payroll; however, it can be used for payroll, rent, utilities and mortgage interest.
  • SBA 7(a) Loan
  • SBA Express Loan
  • EIDL Loan

Grants:

  • There is a stimulus grant payment to each qualifying taxpayer of $1200.00 plus $500.00 per qualifying child under the age of 17.
    • There are limitations of gross income based on filing status that can affect the eligibility for this payment.
  • Unemployment – this is the normal rate plus an additional sum per week
  • EIDL Loan – there is a component that can later become a grant

Tax Provisions:

There are many tax provisions in the bill. Below are just a few.

  • Qualified Improvement Property is now subject to bonus depreciation
  • You can now use a Net Operating Loss (NOL) and carry it back to prior years
  • There is a business income limitation
  • Estimated tax payment date changes
A Guide to Handling Layoffs

A Guide to Handling Layoffs

A Guide to Handling Layoffs

We are in uncharted territory in the world right now. As you navigate through the new opportunities you are faced with, you may have to make difficult choices. We can support you through this time, even during difficult choices. We have created a guide on how to handle layoffs from a financial perspective.

JFS LLC Interpretation of the CARES Act

Changes to the April 15 Tax Deadline.

Changes to the April 15 Tax Deadline.

As of 03/20/2020, the tax filing deadline and tax payment deadline have been extended.

You are still able to file by April 15. There has been a 90-day extension on the deadline to pay & to file. If you have questions about this or on how to send in tax information remotely, we are here to help!

First Quarter Estimated payments have been deferred, however, there has been no word on the status of Second Quarter payments.  

Changes to Deductions!

Changes to Deductions!

Changes to Deductions!

Expenses related to activities considered entertainment, amusement or recreation can no longer be deducted.

Business meals can continue to deduct 50 percent of the cost of the meal if the taxpayer or an employee is present and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact.

Travel may alter this deduction.

Questions about Payroll and Payroll Taxes? We Have the Answers.

Questions about Payroll and Payroll Taxes? We Have the Answers.

Questions about Payroll and Payroll Taxes? We Have the Answers.

FAQ Payroll & Payroll Taxes

As businesses grow & progress there are many reasons to engage payroll & the payroll tax process. First, & foremost, is the need for assistance in the form of employees. Second, there might be a need to meet the S corporation requirement for the shareholder to have adequate payroll. Below are some common questions that we receive, & we hope that they can assist you.

Q: What is the reason that S corporation shareholders (depending on the situation) require payroll?

A: The IRS has an adequate payroll requirement. This is to encourage the payroll tax & proper reporting for the new structure.

Q: How often do I pay payroll taxes?

A: This depends on how much in gross payroll that you have per month. The most common payment schedule is monthly for form 941 payments & State withholding with quarterly unemployment. However, please contact your payroll provider to confirm your payroll tax payment schedule.

Q: What about the year-end?

A: Year-end requires a couple of additional forms. This would include a W-3 with forms W-2 for your employees & form 940 for Federal Unemployment.

Q: What forms are required with payroll?

A: There are forms that are monthly, quarterly & annually & are laid out below. These forms are mainly for informational purposes. We have identified the common scenarios below:

Form 941 –

This form is an informational return that is filed quarterly. This form rarely requires payment & is usually for informational purposes. Of course, please speak with your accountant as some circumstances may change this scenario. The taxes reported on this form are Federal Withholding, Social Security & Medicare. The Federal Withholding is the employee withholding. Social Security & Medicare are both the employee & employer portion.

State Withholding Form –

There will usually be a state form for information filing. This is to report the state employee withholding. This form may or may not require payment. Depending on your state, your filing may be your payment.  Check with your payroll provider to confirm your state filing requirements.

State Unemployment Form –

This form is filed quarterly &, depending on your payment schedule, usually requires a form of payment for the quarter with the filing.

As you can tell, payroll varies depending on your state & amount that you are offering in payroll. We strongly encourage that you listen to your payroll preparer & pay close attention to any payroll correspondence that is sent. There will be forms to sign or payments that will be remitted.

JFS LLC Interpretation of the CARES Act

The Importance of Estimated Tax Payments

The Importance of Estimated Tax Payments

Estimated tax payments, every one’s favorite topic, right? NOT. However, they are an important aspect of owning and managing a business. One area that many individuals and businesses forget to account for is making sure they are paying in to the federal and state the correct amount of estimated tax payments through out the year to cover for income made. So, let’s delve a little deeper into this topic.

What is an estimated tax payment?

Estimated taxes are a way of paying income tax on income that was earned but has not had anything withheld on it. So, imagine you are an employee. When you get a paycheck (“income” for your personal household) your employer will withhold federal and state income taxes from this check and pay it to these agencies on your behalf. This then will show up on your tax return at the end of the year and can even result in a refund. So, as a business owner or income earner with no withholding, estimated payments are needed to pay those federal and state income taxes.

Who pays estimated tax payments?

Estimated tax payments can be paid by anyone who has income that does not have withholding. This includes self-employment, business earnings, interest, rent, dividends and other sources. Estimated tax payments must be paid if you expect to owe at least $1000.00 in tax for the current year after subtracting previous withholding and refundable credits.

How much should you pay?

This is a loaded question, but typically it is paid in four equal installments based on either prior year income tax calculations or current year. This is an important conversation to have with your tax accountant to ensure that you do not receive a penalty for not paying in enough throughout the year.

When are they due?

Estimated tax payments are due four times a year. They are not on your typical quarter end dates, so the dates below are important to note:

April 17,2018

June 15, 2018

September 17, 2018

January 15, 2019

Therefore, don’t forget to include these payments in your business strategy and personal finance planning. They are important. If you have any questions regarding estimated tax payments, please feel free to contact us!

Written by: Kelly Johnston