Larson Accounting – Larson Accounting Group

7 de February de 2021

IR-2021-16, January 15, 2021

WASHINGTON ― The Internal Revenue Service announced that the nation’s tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.

To speed refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the information they need. People can begin filing their tax returns immediately with tax software companies, including IRS Free File partners. These groups are starting to accept tax returns now, and the returns will be transmitted to the IRS starting February 12.

“Planning for the nation’s filing season process is a massive undertaking, and IRS teams have been working non-stop to prepare for this as well as delivering Economic Impact Payments in record time,” said IRS Commissioner Chuck Rettig. “Given the pandemic, this is one of the nation’s most important filing seasons ever. This start date will ensure that people get their needed tax refunds quickly while also making sure they receive any remaining stimulus payments they are eligible for as quickly as possible.”

Last year’s average tax refund was more than $2,500. More than 150 million tax returns are expected to be filed this year, with the vast majority before the Thursday, April 15 deadline.

Under the PATH Act, the IRS cannot issue a refund involving the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law provides this additional time to help the IRS stop fraudulent refunds and claims from being issued, including to identity thieves.

The IRS anticipates a first week of March refund for many EITC and ACTC taxpayers if they file electronically with direct deposit and there are no issues with their tax returns. This would be the same experience for taxpayers if the filing season opened in late January. Taxpayers will need to check Where’s My Refund for their personalized refund date.

Overall, the IRS anticipates nine out of 10 taxpayers will receive their refund within 21 days of when they file electronically with direct deposit if there are no issues with their tax return. The IRS urges taxpayers and tax professionals to file electronically. To avoid delays in processing, people should avoid filing paper returns wherever possible.

Tips for taxpayers to make filing easier

To speed refunds and help with their tax filing, the IRS urges people to follow these simple steps:

File electronically and use direct deposit for the quickest refunds.
Check IRS.gov for the latest tax information, including the latest on Economic Impact Payments. There is no need to call.
For those who may be eligible for stimulus payments, they should carefully review the guidelines for the Recovery Rebate Credit. Most people received Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include any information about their payments when they file. However, those who didn’t receive a payment or only received a partial payment may be eligible to claim the Recovery Rebate Credit when they file their 2020 tax return. Tax preparation software, including IRS Free File, will help taxpayers figure the amount.
Remember, advance stimulus payments received separately are not taxable, and they do not reduce the taxpayer’s refund when they file in 2021.

Key filing season dates

There are several important dates taxpayers should keep in mind for this year’s filing season:

January 15. IRS Free File opens. Taxpayers can begin filing returns through Free File partners; tax returns will be transmitted to the IRS starting Feb. 12. Tax software companies also are accepting tax filings in advance.
January 29. Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
February 12. IRS begins 2021 tax season. Individual tax returns begin being accepted and processing begins.
February 22. Projected date for the IRS.gov Where’s My Refund tool being updated for those claiming EITC and ACTC, also referred to as PATH Act returns.
First week of March. Tax refunds begin reaching those claiming EITC and ACTC (PATH Act returns) for those who file electronically with direct deposit and there are no issues with their tax returns.
April 15. Deadline for filing 2020 tax returns.
October 15. Deadline to file for those requesting an extension on their 2020 tax returns

Filing season opening

The filing season open follows IRS work to update its programming and test its systems to factor in the second Economic Impact Payments and other tax law changes. These changes are complex and take time to help ensure proper processing of tax returns and refunds as well as coordination with tax software industry, resulting in the February 12 start date.

The IRS must ensure systems are prepared to properly process and check tax returns to verify the proper amount of EIP’s are credited on taxpayer accounts – and provide remaining funds to eligible taxpayers.

Although tax seasons frequently begin in late January, there have been five instances since 2007 when filing seasons did not start for some taxpayers until February due to tax law changes made just before the start of tax time.

Source: IRS Jan,15-21

by Larson Accounting

6 de February de 2021

IR-2021-30, February 5, 2021

WASHINGTON — The Internal Revenue Service reminds taxpayers to avoid “ghost” tax return preparers whose refusal to sign returns can cause a frightening array of problems. It is important to file a valid, accurate tax return because the taxpayer is ultimately responsible for it.

Ghost preparers get their scary name because they don’t sign tax returns they prepare. Like a ghost, they try to be invisible to the fact they’ve prepared the return and will print the return and get the taxpayer to sign and mail it. For e-filed returns, the ghost preparer will prepare but refuse to digitally sign it as the paid preparer.

By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number, or PTIN. Paid preparers must sign and include their PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to make a fast buck by promising a big refund or charging fees based on the size of the refund.

Unscrupulous tax return preparers may also:

Require payment in cash only and not provide a receipt.
Invent income to qualify their clients for tax credits.
Claim fake deductions to boost the size of the refund.
Direct refunds into their bank account, not the taxpayer’s account.

The IRS urges taxpayers to choose a tax return preparer wisely. The Choosing a Tax Professional page on IRS.gov has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification.

No matter who prepares the return, the IRS urges taxpayers to review it carefully and ask questions about anything not clear before signing. Taxpayers should verify both their routing and bank account number on the completed tax return for any direct deposit refund. And taxpayers should watch out for preparers putting their bank account information onto the returns.

Taxpayers can report preparer misconduct to the IRS using IRS Form 14157. If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, they should file Form 14157-A.

Source: https://www.irs.gov/newsroom/beware-of-ghost-preparers-who-dont-sign-tax-returns

by Larson Accounting

26 de January de 2021

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Leverage these four emerging business trends to give your business an edge in the new year.

For small businesses across America, 2020 has been one of the most challenging years in history. Despite the coronavirus pandemic, small business owners have been resilient, pivoting, and adapting their business models to navigate continually changing conditions. With the new year on the horizon, there are potential new opportunities to take advantage of and ways to adapt to challenges you may face. Here are a few business trends that are likely to dominate in 2021, along with tips on how to position your business for growth:

Businesses will continue to prioritize e-commerce. While e-commerce was already growing before the pandemic, a report by IBM shows the shift away from physical stores to digital shopping has sped up by roughly five years. According to the report, e-commerce is projected to grow by 20% in total in 2020. To prepare for this shift in consumer spending, fine-tune your small business’s e-commerce presence in 2021. Create a seamless e-commerce experience for your customers by making your site mobile-friendly.

Alternative payment options will proliferate. Another trend that is likely to last into 2021 and beyond is the dominance of alternative payment options. In their annual State of Retail Payments study, the National Retail Federation found that no-touch payments (e.g. contactless credit and debit cards or mobile pay) for retailers have increased 69% since January. Among retailers that have implemented contactless payments, 94% expect the increase to continue over the next 18 months. Heading into next year, explore touchless payment options for your small business, including online payments with curbside pickup.
Remote work will persist. During the pandemic, many small businesses shifted to part-time or full-time remote work schedules in response to local ordinances. According to a survey by Intermedia, 57% of small to medium-sized business owners said they will continue to offer remote work options in the long term. Depending on your type of business, you may need to consider offering remote work options to compete for talented workers in 2021 and beyond. This also means that you may need to invest in additional technology and software solutions going forward to ensure that your employees can telework. For example, another survey from GGV Capital shows that 54% of small business owners spent more on software solutions in 2020 than in 2019, and 75% expect that spending to increase next year.

Businesses that offer virtual services will continue to be in high demand. According to the U.S. Chamber of Commerce, the pandemic has led to increased demand for certain business types, particularly those related to technology and virtual health and fitness. These include cybersecurity, at-home fitness, food delivery, gaming, home improvement, and telemedicine businesses. If you are considering starting a business, or are looking for ways to pivot or expand your business, look to these business categories for inspiration.
For further insights on how you can incorporate these trends into your small business plans for 2021, connect with a local SBA resource partner for expert, tailored advice.

Author

U.S. Small Business Administration

U.S. Small Business Administration

by Larson Accounting

11 de January de 2021

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WASHINGTON – The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, announced today that the Paycheck Protection Program (PPP) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on January 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.

This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.

“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” said Administrator Jovita Carranza. “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”

“The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs,” said Treasury Secretary Steven T. Mnuchin. “This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19. We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”

Key PPP updates include:

PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
The PPP provides greater flexibility for seasonal employees;
Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
Has no more than 300 employees; and
Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

The new guidance released includes:

For more information on SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.

About the U.S. Small Business Administration

The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.

By Office of Communications and Public Liaison
Contact U.S. Small Business Administration at Press_Office@sba.gov or (202) 270-3876