IR-2021-33, February 9, 2021

WASHINGTON — With some areas seeing mail delays, the Internal Revenue Service reminds taxpayers to double-check to make sure they have all of their tax documents, including Forms W-2 and 1099, before filing a tax return.

The IRS reminds taxpayers that many of these forms may be available online. When other options aren’t available, taxpayers who haven’t received a W-2 or Form 1099 should contact the employer, payer or issuing agency directly to request the missing documents before filing their 2020 federal tax return. This also applies for those who received an incorrect W-2 or Form 1099.

Those who don’t get a response, are unable to reach the employer/payer/issuing agency or cannot otherwise get copies or corrected copies of their Forms W-2 or 1099 must still file their tax return on time by the April 15 deadline (or October 15 if requesting an automatic extension). They may need to use Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. to avoid filing an incomplete or amended return.

If the taxpayer doesn’t receive the missing or corrected form in time to file their tax return by the April deadline, they may estimate the wages or payments made to them, as well as any taxes withheld. Use Form 4852 to report this information on their federal tax return.

If the taxpayer receives the missing or corrected Form W-2 or Form 1099-R after filing their return and the information differs from their previous estimate, they must file Form 1040-X, Amended U.S. Individual Income Tax Return. For additional information on filing an amended return, see Topic No. 308 and Should I File an Amended Return?

Taxpayers should allow enough time for tax records to arrive in the mail before filing their 2020 tax return. In a normal year, most taxpayers should have received income documents near the end of January, including:

Forms W-2, Wage and Tax Statement
Form 1099-MISC, Miscellaneous Income
Form 1099-INT, Interest Income
Form 1099-NEC, Nonemployee Compensation
Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund
Incorrect Form 1099-G for unemployment benefits
Millions of Americans received unemployment compensation in 2020, many of them for the first time. This compensation is taxable and must be included as gross income on their tax return.

Taxpayers who receive an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits. Taxpayers who are unable to obtain a timely, corrected form from states should still file an accurate tax return, reporting only the income they received.

Use IRS.gov
IRS tax help is available 24 hours a day on IRS.gov, the official IRS website, where people can find answers to tax questions and resolve tax issues online. The Let Us Help You page helps answer most tax questions, and the IRS Services Guide PDFlinks to other important IRS services.

Source: IRS feb/2021

A new coronavirus relief bill will provide $284 billion in loans for small businesses. Here are some key details.

President Donald Trump has signed into law a new $900 billion coronavirus relief and stimulus package. Among its provisions: An extension of last spring’s Paycheck Protection Program, allowing another $284 billion or so in forgivable, federally backed loans for ailing small businesses.

The initial program, overseen by the U.S. Department of Treasury and Small Business Administration, shepherded some $525 billion to more than 5 million recipients but was fraught with loopholes and liabilitiesthat raised countless issues throughout an already complex process.

The new Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act clarifies questions about the loan process, but also adds rules about applying for new loans and seeking forgiveness for old ones. The bill gives the Small Business Administration 10 days to implement the new rules, so more specific rules could be coming. Until then, borrowers should turn to their lenders for guidance.

Here are some answers to questions business owners might have.

How does this round of loans differ from the last one?

Some aspects are broadly the same. Applicants have between eight and 24 weeks to use the funds, with at least 60 percent going toward payroll and the rest toward eligible expenses like rent and utilities.

New loans are capped at $2 million, compared to $10 million before. Applicants must have no more than 300 employees, instead of up to 500, and must demonstrate at least a 25 percent drop in revenues from the fourth quarter of 2019 to the same period this year.

The bill expands the type of covered expenses to include things like cloud computing or remote-work software; and equipment for government-mandated sanitation and social-distancing, like sneeze guards or air filtration systems. It even covers “property damage and vandalism or looting due to public disturbances that occurred during 2020.”

One notable aspect of the new bill that’s not directly tied to new loans is an expansion of the employee retention tax credit, a facet of the Coronavirus Aid, Recovery and Economic Stimulus (CARES) Act that encouraged employers not to shed jobs. Originally, businesses that got Paycheck Protection Program loans were not eligible to claim that credit. Now they are.

If I already got one loan, can I get another one?

Yes. These are called “second draw” loans, and as long as you meet the qualifications above, you can apply. The deadline for all new loans is March 31.

Are any businesses eligible for more help than others?

New loan amounts are determined by a formula that involves payroll costs multiplied by a factor of 2.5 (again, capped at $2 million). Restaurants and other hospitality businesses may multiply those costs by 3.5, making them eligible for slightly more funding.

The bill restricts certain companies from applying for loans, including businesses specializing in political or lobbying activities — like the Florida Democratic Party, which received, then returned, $780,000 the last time around. Also excluded: Businesses with extensive dealings in China, or who have China residents on their boards.

Concert venues, theaters and museums, which had long lobbied for additional aid, are not eligible for new Paycheck Protection Program loans, but can apply for special “Shuttered Venue Operator Grants” worth up to $10 million.

How will this impact my existing forgiveness application?

If you got more than $150,000, it probably won’t. If you got less, the process should be much easier.

A few weeks ago, the government simplified forgiveness applications for businesses that got less than $50,000, requiring only a description of how much loan money was spent on payroll, and how many employees the recipient was able to retain as a result. The new bill ups that limit to $150,000. Affected businesses will not need to submit documentation supporting their claims, but should keep it on hand in case of an audit down the line.

If you’ve already applied for and received forgiveness, none of the new provisions apply — you’re done. But you can try to get a second loan.

By Jay Cridlin

THE IMPORTANCE OF FINANCIAL ADVICE WHEN STARTING A BUSINESS

Understand the importance of financial advice when starting your own business

THE AMERICAN TRUTH

Understand the importance of financial consulting when starting your own business.

When starting your own business, you need to keep in mind how to invest your initial capital and how to maintain cash flow, so that your company continues generating income and is potentially recognized in the market. For that, it is essential to analyze and organize your finances with the assistance of a specialized financial consultant. With a good financial planning, it will be easier to make large investments in order to ensure your company’s success.

1. What is the meaning of financial consulting?

It is necessary to first identify its literal meaning in order to have a better notion of consulting. The word consulting comes from “receiving or giving advice”, which means the branch of activity that will help someone, or in this case an entrepreneur, to diagnose financial problems and solutions to leverage results and prospect your business. Furthermore, it is the financial consultant who evaluates the data of your finances to seek strategies that may keep them more organized, so that your company is safe to invest and also ready to face the challenges of the market.

2. Build a good financial plan

Every entrepreneur needs to build a good financial plan to achieve his/her goals based on an appropriate level of organization. This will help them avoid going bankrupt due to lack of efficient financial management and it will make your company stands out. Regardless of whether the entrepreneur owns a small, medium or large company, to be successful you must start by separating personal and business finances, record excessive expenses and spending, set prices for services according to what the market demands, have a cash flow, pay attention to payroll, among other initiatives that help keeping your company running. Therefore, for this financial plan to work, it is necessary to rely on the help of a financial consultancy that will make the entrepreneur understand the direction his/her company is going. As a smart act that will add value to the success of your business.

3. How is the financial consulting conducted?

Many entrepreneurs expect to be almost bankrupt and full of problems to seek financial advice, but it does not have to be this way. Before starting a business it is essential to identify the points you need to improve in your company’s financial life to prevent future situations that could put everything to lose. When hiring this service, the consultant will visit your business and compile a detailed data sheet, analyzing the inflows and outflows of money, and assembling a report with the entire financial routine that the entrepreneur provides. Afterwards, the consultant will assemble a diagnosis with all the information to propose actions and strategies to help improve your company.

4. What Do Consultants Do?

The consultant’s work is simple: he will impartially analyze the company’s situation, suggesting changes and understanding the company’s profitability to enable the healthy growth of your business. With his help, the entrepreneur will be able to make more assertive decisions about which direction the company wants to take. In addition, the suggestions may impact several areas of the business such as feasibility, administration and investments.

Now that you, entrepreneur, already know the importance of having the support of a financial consultancy, search for a good company and do not waste more time in bureaucratic processes alone. A good financial management at the beginning of your business, will make you climb higher mountains towards success. Investing in financial consulting will make your company more stable and consequently easier to manage.