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Archives for March 2020

CLIENT TAX UPDATE: CARES ACT – Insights

March 30, 2020 by Burcu Bree Manay

The long-awaited Stimulus Bill known as The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Trump.  This new law not only sends rebate checks to taxpayers but also rolls back several provisions of the Tax Cuts and Jobs Act.

Below is a summary of the law that was signed into law March 27, 2020.  The law was designed to infuse immediate cash into the hands of business and individual taxpayers, here’s how:

Individuals and Families

Individual Tax Credit/Rebate

All individuals who are not dependents are eligible to receive a rebate of up to $1,200 rebate ($2,400 for married filing joint taxpayers).  In addition, taxpayers with children dependents qualify for up to a $500 rebate per child.  The payment will be based on the 2018 tax return (2019 if already filed) and includes a phase out for AGI over thresholds of $75,000 ($150,000 for married filing joint and $112,500 head of household filers).

The rebate acts as an advanced tax credit and will be reconciled on the 2020 tax return.

Retirement Account Changes

Retirement distributions used for coronavirus related purposes will be taxed over a 3 year period and the amount will not be subject to early withdrawal penalties after 1/1/2020.  In addition, amounts may be recontributed beyond contribution limits during that time.

In addition, required Minimum Distributions are waived for the 2020 tax year.

Enhanced Charitable Deductions

Taxpayers who take the standard deduction are eligible to deduct up to $300 on their 2020 tax returns as special deduction.  This is a permanent change.

Student Loans

Student loan payments made by employers on behalf of their employees are deductible to the business and exempt from tax to the employee up to $5,250 for 2020.

Unemployment Insurance Provisions

Changes in the law provide payments to “Covered Individuals” who would not normally be eligible for or who have exhausted regular unemployment compensation and who are unemployed, partially unemployed, or unable to work as a direct result of the COVID-19 public health emergency. This includes self-employed taxpayers

Covered Individuals, as well as all those who have qualified for regular unemployment compensation are entitled to receive an additional $600 payment per week, above what state unemployment compensation law already provides. The additional $600 weekly payment is available from the date that the applicable state enters into an agreement with the federal government until July 31, 2020 (i.e., four months maximum).

Up to 39 weeks of unemployment compensation, including any week for which the Covered Individual received regular compensation or extended benefits is available. An additional 13 weeks of pandemic emergency unemployment compensation through December 31, 2020 is available.

Business Provisions

Employee Retention Tax Credit

Up to 50% of qualified wages paid between 3/13/2020 and 12/31/2020 are eligible for a tax credit related to COVID-19.  In order to qualify the business must have been fully or partially shut down due to COVID-19 or have gross income that is 50% less than the same quarter in the prior year.

Deferment of Employer Payroll Taxes

Employers and Self-Employed taxpayers can defer the employer’s portion of the social security tax (6.2%) to be repaid in equal payments by 12/31/2021 and 12/31/2022.

Expanded Net Operating Loss Deduction

A net operating loss (NOL) of a corporate taxpayer between January 1, 2018 and 2021 generally can be carried back five years preceding the taxable year of such loss.

Repeal of Excess Business Loss Rules

The excess business loss limitation has been repealed for self-employed individuals and owners of pass through businesses for tax years 2018-2020.

Qualified Tenant Improvements Bonus Depreciation

One hundred percent bonus depreciation now applies to qualified improvement property. Qualified improvement property (QIP) is any improvement to the interior of a non-residential building after the building was placed in service, other than elevators, escalators, building enlargements or changes to the building’s internal structural framework. It has a recovery period of 15 years for general depreciation.

AMT Credit Refunds

Under the TCJA Corporate AMT tax credits were refundable over several years with any remaining credits fully deductible in 2021.  Under this provision, the corporate AMT credit is now 50% refundable in 2018 with any remaining balance fully refundable in 2019.  Additionally, an election can be made applying 100% of the AMT credit to 2018 taxes allowing businesses to potentially amend 2018 tax returns to obtain refunds.

Funding Solution Provisions

Small Business Loans

Paycheck Protection Program (PPP)

For businesses with 500 or less employees and in operation on 2/15/2020 new modified loans are made available through the SBA.  The amount of the loan is limited to the lesser of $10 million or 2.5 times the borrower’s average total monthly payroll costs.  The application period ends June 30, 2020.

The loan proceeds may be used for payroll costs (as defined), employee benefits and commissions, interest payments on mortgages, rent, utilities, and interest on debt incurred before 2/15/2020.

No collateral is required with a maximum interest rate of 4% and a maximum term of 10 years.  While interest will accrue from the day the loan is made, not interest or principal payments are required for a 6-12 month period of time.  The loan may be paid off at anytime without prepayment penalties.

The PPP loan has a forgiveness provision allowing the borrower to apply for loan forgiveness in an amount equal to the payroll costs, rent, utilities, and interest paid on mortgages during the 8 weeks after the loan is made.  The amount of forgiveness will not be taxable to the borrower, but the taxpayer may not use both the loan and the employee retention tax credit as described above.

 Economic Injury Disaster Loan (EIDL)

The program currently allows for emergency loans of up to $2M to assist companies affected by COVID-19. The new law waives the requirement for personal guarantees on loans under $200K, it also waives the requirement that the borrower not be able to obtain credit elsewhere, and provide emergency grants of up to $10K within 3 days of the borrower filing an application, though the amount of the grant would reduce any loan forgiveness under the PPP. The law also streamlines the loan application process.

If you are wondering how the new law may benefit you, please contact Manay CPA for a virtual appointment.  We hope this summary will be helpful in your understanding of new aid available.

Together, we can get through this.

Good thoughts for you and your loved ones.

Burcu Bree Manay, CPA,MPAc, CTC
President & Managing Partner

Filed Under: Uncategorized

MANAY CPA VERGİ BÜLTENİ: COVID-19: GÜNCEL VERGİ/TEŞVİK DÜZENLEMELERİ

March 25, 2020 by Burcu Bree Manay

Değerli Manay CPA müşterileri,

Bildiğiniz gibi COVID-19 epidemisi nedeniyle IRS ve Kongre son günlerde hızlı bir şekilde hareket ederek kapsamlı bir çok düzenleme yaptılar. Bu bültende sizleri, çalışanlarınızı ve şirketinizin nakit akışını ve finansal yapısını etkileyecek unsurları kısaca özetleyip önümüzdeki süreci planlamanıza yardımcı olmaya çalışacagız. Ayrıca kaynaklara doğrudan erişebilmeniz için konularin içinde linkler bulacaksınız.

  • Federal Gelir Vergisi Beyanı Verme ve Ödeme Tarihleri 

    21 Mart 2020 tarihinde IRS ve ABD Hazine Bakanlığı federal gelir vergisi beyan verme ve ödeme tarihini 15 Nisan 2020 tarihinden 15 Temmuz 2020 tarihine erteledi.Bu muafiyet son ödeme tarihi 15 Nisan 2020 olan estimated tax ödemelerini de kapsıyor ve onların ödemelerini de 15 Temmuz 2020 tarihine kadar erteleme imkanı veriyor.

    Bu erteleme tüm vergi yükümlülerini, kısaca bireyleri, şirketleri, trust ve estates’leri, şirket olmayan vergi yükümlülerini ve self-employment vergi yükümlülerini kapsıyor.

    Tüm vergi yükümlüleri miktar sınırlaması olmaksızın ceza ve gecikme faizi olmaksızın 15 Nisan 2020 tarihine kadar ödemekle yükümlü oldukları vergileri 15 Temmuz 2020 tarihine kadar ödeyebilecekler.

    15 Temmuz 2020 tarihine kadar beyanname veremeyecek olanlar uzatma (extension) formu doldurarak 15 Temmuz 2020 tarihinden önce uzatma talep edebilir ve 15 Ekim 2020 tarihine kadar ek süre alabilirler. Manay CPA olarak müşterilerimizin talebi üzerine biz bu formları kendi adlarına doldurup IRS bildirimini yapıyoruz.

    IRS ayrıca vergi iadesi alacak durumda olanların 15 Temmuz 2020 tarihini beklemeden vergi beyanını vererek vergi iadelerini bir an önce almalarını tavsiye ediyor.

    IRS duyurusunun tam metnine bu linkden ulaşabilirsiniz: https://bit.ly/3agNxAT

  • Eyalet Gelir Vergisi ve Beyanları 

    Bilinmelidir ki IRS duyurusu sadece federal gelir vergisi ödeme ve beyan suresinin ertelenmesi ile ilgilidir. Eyalet vergi beyanları ve ödemeleri bu erteleme kapsamı içinde değildir.Her eyaletin eyalet vergi beyan ve ödeme tarihleri değişiklikler göstermekledir. Eyaletlerin vergi beyan ve son ödeme tarihleri federal vergi son beyan ve ödeme tarihleri ile aynı olmayabilir. Bundan dolayı eyalet vergi beyanı ve ödeme tarih değişiklikleri konusunda bulunduğunuz eyaletin vergi departmanı ile iletisime geçmenizde fayda bulunmaktadır. Manay CPA olarak biz müşterilerimizin bağlı bulunduğu eyalet vergi daireleri duyurularını yakından takip edip müşterilerimizi bilgilendiriyoruz.

    Siz de bulunduğunuz eyaletteki vergi dairesi duyurularına bu linkden ulaşabilir ve bilgi alabilirsiniz: https://bit.ly/2wr4I4i

 

  • The Families First Coronovirus Response Act (H.R. 6201) 

    18 Mart 2020 tarihinde imzalanarak 2 Nisan 2020 tarihinden itibaren yürürlüğe girecek olan The Families First Coronavirus Response Act ile bireylere, self-employed olanlara ve işverenlere yeni imkanlar sağlandı. Kanunda yer alan The Emergency Family and Medical Leave Expansian Act, Emergency Paid Sick Leave ve bunların işverene maliyetini karşılamak için oluşturulan vergi destekleri (tax credit) yakın gelecekte tüm işletmeler için hayati öneme sahip olacaktır. 

    Kanunun uygulama aşamasında yasanacak sıkıntıların daha netleşmediği görülmektedir. IRS 20 Mart 2020 tarihinde bir açıklama yaptı ancak yasada geçen tüm yardımların nasıl uygulanacağına dair kanunun yürürlüğe gireceği 2 Nısan 2020 tarihine kadar IRS ve diğer devlet kurumlarından gelecek açıklamaları yakından izlemek gerekmektedır. İşletmenizin ve çalışanlarınızın bu zorlu dönemi güvenli bir şekilde atlatmasına yardımcı olmak ve devlet desteklerinden isletmenizi ve çalışanlarınızı maksimum yararlandırmak için yapılacak uygulama açıklamalarını Manay CPA olarak yakından takip ediyor olacağız.Kanunun tüm metnine bu linkden ulaşabilirsiniz: https://bit.ly/2UCcdNC

    Kanuna ve uygulamasına ilişkin ilk IRS duyurusuna buradan erişebilirsiniz: https://bit.ly/2QK8XyN

    Kanunun uygulanması ile ilgili yapılacak açıklamalar sonrası sizleri bilgilendirmeye devam edecegiz.

  • Small Business Administration (SBA) COVID-19 Disaster Relief Kredileri 

    COVID-19 virüsunun küçük işletmelerin nakit akışlarında yarattığı sıkıntıları hafifletmek için SBA, COVID-19’dan zarar gören küçük işletmelere 30 yıl vadeye, $2M dolara kadar 3.75% faizle kredi kullandırmaya başladı. Kredi fatura, maaş, tedarikçi ödemeleri ve kredi ödemelerinde kullanılabilecek.Manay CPA olarak müşterilerimizin düşük faizli ve uzun vadeli SBA kredilerine hızlı bir şekilde erişimlerini sağlamak için SBA kredi başvurusu için gerekli tüm dökümanları biz hazırlayarak kredi işleminin sorunsuz sonuçlanmasını sağlıyoruz.

    Small Business Administration COVID-19 Disaster Relief kredileri ve başvuru koşulları sayfasına bu linkden ulasabilirsiniz: https://bit.ly/2UEKmN4

    Bu zor günlerde Manay CPA olarak müşterilerimizin, çalışanlarımızın, iş ortaklarımızın zarar görmemeleri ve yapılmakta olan devlet yardımları ve teşviklerınden en iyi şekilde yararlanmaları için yapılacak açıklamaları takipte olacağız. Kurmuş olduğumuz güvenli sanal iletişim altyapısı ile Manay CPA Team olarak müşterilerimizin tüm işlemlerini online olarak yapabiliyoruz. Çalışma mesai saatlerimiz değişmedi Pazartesi-Cuma: 08:00-19:00, Cumartesi: 09:00-17:00.

    Birlik olup iletişimde kalarak bu günleri atlatacağımıza inancım tamdır.

    Evde kalin, sağlıkta kalın.

    Burcu Bree Manay, CPA,MPAc, CTC
    President & Managing Partner

Filed Under: Türkçe Vergi Bülteni

July 15th is the New Tax Day

March 21, 2020 by Burcu Bree Manay

It has been hard to distinguish the chatter and recommendations for the actual law. Earlier this week Treasury Secretary Mnuchin implied that there would be a 90-day tax filing and payment extension from the April 15th deadline. He said, “just file your taxes. you will automatically not get charged interest and penalties.” The next day, the IRS issued Notice 2020-17 announcing a payment extension until July 15, 2020, but not a filing extension.

Yesterday Mnuchin tweeted that the extension to July 15, 2020 would be a filing and a payment extension. He stated as follows: “at the President’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”

We are not sure how the IRS will interpret this statement. Will it eliminate the $1 million and $10 million thresholds in the IRS Notice? Will it include the April 15th estimated tax payment in the filing extension? Bottom line is we won’t know the answers until the IRS issues guidance. Hopefully we’ll know sooner than later.

With all the minute-by-minute changes please note that we are working feverishly to keep you abreast of the changes – be sure to read the client alerts before emailing to ensure you are including the most up to date information.

Together, we can get through this.

Good thoughts for you and your loved ones.

Burcu Bree Manay, CPA,MPAc, CTC
President & Managing Partner

Filed Under: Uncategorized

TAX DEADLINE EXTENDED TO JULY 15

March 19, 2020 by Burcu Bree Manay

IRS Delays Tax Payment Deadline by 90 Days for Most Individuals and Businesses

The IRS has issued a notice extending tax payment deadlines into the summer however the April 15 tax return filing deadline remains in place.

Notice 2020-17 extends the tax payment deadline to July 15, with the extension applying to all taxpayers with federal income tax payments due April 15, up to specified thresholds.

Individual taxpayers can postpone up to $1,000,000 in federal income tax payments, while corporate taxpayers can postpone up to $10,000,000 in income tax payments.

The extension doesn’t apply to other types of federal taxes or to the filing of federal tax or information returns, according to the notice.

Filed Under: Uncategorized

COVID19 UPDATE

March 19, 2020 by Burcu Bree Manay

Dear Clients,

With fears of COVID-19 changing our lives at the present moment, it is easy to let something like taxes fall by the wayside. While Congress is considering extending the deadline, it actually pays to get moving on your return faster rather than later if you are due a refund.

With all the financial uncertainty during the crisis, it is better to have that money in your pocket now more than ever.

On Friday, March 13, 2020, President Trump declared a national emergency over the virus, setting the stage for the Treasury and IRS to offer administrative tax relief. Some of the solutions being discussed include extending deadlines for tax return filing and tax payments, waiving penalties for late payments and interest, and expediting amended tax return processing.

In addition, the House and Senate are voting on a bill to provide tax cuts for employers offering emergency sick leave. It does not include the payroll tax cut sought by the President, but it does require insurers to cover virus testing and it provides enhanced unemployment benefits and increased food aid for children, among other things. The Senate is expected to pass the bill this week, and a Presidential signature after that is all but certain.

The President has announced that he will instruct Treasury to allow individuals and businesses that are negatively affected by the coronavirus to defer their tax payments beyond the April 15 deadline.

Individuals and businesses will have an extra 90 days to pay the IRS if they owe additional income tax for 2019.

Normally, taxpayers owe the amount due by April 15. But as part of the government’s response to the coronavirus, individual and small business filers will be able to defer payments of up to $1 million and corporations can defer up to $10 million — without incurring interest or penalties.

Please be aware this is not an extension of time to file extension requests or tax returns, but does provide some relief for those who owe tax.

It is important to remember that all bills must pass both the House of Representatives and the Senate and be signed into law by the President – many things being discussed in the media have not yet become laws and until they are, the current laws stand including the due dates for tax returns and extension requests.

We will continue to keep you informed about changes that directly impact and benefit you. In the meantime if you have any questions, please don’t hesitate to contact Manay CPA Team!

Sincerely,

Burcu Bree Manay, CPA,MPAc, CTC

President & Managing Partner

Filed Under: Uncategorized

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