Many small businesses need extra help during our current circumstances. Here’s a list of programs and resources that you can read about and apply for to keep your business solvent.
Delayed Deadline for Filing and Paying Federal and State Income Taxes
Both the IRS and Treasury have announced that the deadline to file AND pay your individual federal and California state income tax for the tax year of 2019 has been extended to July 15, 2020.
Many other states have extended their deadlines as well; please check with us if you live in a state other than California to determine the deadline applicable to you.
Estimated tax payments for 2020 originally due on April 15 will now be due on July 15.
If you cannot file your return by July 15, 2020, we can help you file an extension until October 15, 2020. The payment is still due by July 15, however.
If you are due a refund, we encourage you to file as soon as possible so you can get that cash influx as early as possible.
IRA and Retirement Plan Contributions
Contributions can be made to your IRA, for a particular year, at any time during the year or by the due date for filing your return for that year.
Because the due date for filing federal income tax returns has been postponed to July 15, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020
From the SBA (Small Business Administration)
The SBA has a number of programs and loans available to small businesses, including the SBA Economic Injury Disaster Loan Program and the SBA Express Bridge Loan Program. Its resource page also includes guidance for small businesses. You can apply online and/or call 1-800-659-2955, the SBA Disaster Assistance Customer Service Center, to get help with your application.
Los Angeles Small Business Emergency Microloan Program
Businesses in Los Angeles that provide low-income jobs can get an emergency loan of $5,000 to $20,000. Interest rates on loans vary from 0% to 5%, depending on the length of the loan. Apply online:
Los Angeles has also instituted a moratorium on evictions of businesses impacted by the coronavirus through March 31.
San Francisco COVID-19 Small Business Resiliency Fund
A moratorium on evictions for small- and medium-sized businesses whose revenue has been affected by the coronavirus is in effect in San Francisco from March 17 to April 16, 2020. The mayor can extend it another 30 days.
Your bank can often be the fastest path to the cash you need. Grab your line of credit before it disappears. You can also inquire about loan deferment.
Many businesses have created resource hubs for small business assistance. Here are a few of our favorites:
Intuit is joining Yelp and GoFundMe to pour $1.5 million into a Small Business Relief Fund which will be used to issue $500 matching grants to businesses that raise at least $500 on their COVID-19 related GoFundMe campaign. More here: https://quickbooks.intuit.com/smallbusinesshelp/
Facebook is offering up to 30,000 small businesses $100 million in cash grants and Facebook advertising credits. The grants will be provided to businesses in more than 30 countries. Read more here:
We’re Here Too
If you need help with things like cash flow projections, financial statements for loan applications, or tax planning, please feel free to reach out to us any time.
Please click here > YOUR 2019 YEAR-END TAX PACKAGE
We’ve made a few wonderful changes to our firm and want to keep you up to date on what’s happening at Magidov CPA.
First, we have new team members to introduce you to:
- Virna is our new office manager who will be responsible for scheduling all of our tax appointments.
- Cyrus is our new tax manager.
- Keith and Sandy will be working in our tax department.
- Janet is our new accountant and will also be doing bookkeeping for clients.
- Julia and William are no longer with our firm.
- We know you love Rochelle; she’ll be working on weekends and will be meeting with clients who are scheduled on weekend days.
- Dave Dichner has decided to semi retire and will not be seeing clients this tax season at our office. We are grateful to him for helping us last tax season and entrusting us with his many clients that we will be serving this upcoming tax season. Dave will continue to retain his email. Thank you, Dave!
Here are our team’s emails:
- Virna (office) – email@example.com
- Cyrus (tax manager) – firstname.lastname@example.org
- Keith (tax) – email@example.com
- Sandy (tax) – firstname.lastname@example.org
- Janet (bookkeeper) – email@example.com
- Rochelle (tax/bookkeeper) – firstname.lastname@example.org
- Dave (Principal) – email@example.com
- Ruslan (Principal) – firstname.lastname@example.org
Here are some of the other services and firm updates that tremendously add value and improve your experience with us.
- Short phone calls throughout the year – free of charge. Most CPAs charge for all phone calls;
- Short meetings – free of charge. Most CPAs charge for all meetings;
- Bi-weekly high quality newsletters with helpful tips on running your own small practice or business so we are constantly in contact with you and our clients;
- Easy appointment/call scheduling via http://meetme.so/RuslanMagidov;
- Quick response to our clients emails and phone calls;
- Secure document shredding and data storage. Security of our clients information is of the highest importance to us;
- Electronic signature services. In our effort to save trees and paper, we are now offering e-signing services of documents free of charge so you do not have to print in order to sign;
- New Business Kit written to provide our new businesses with basic information about the financial, tax and accounting considerations of starting a new business – free of charge. If you’d like a copy of our NEW BUSINESS KIT, just let us know;
- Social media presence. We are on twitter and facebook now. Please make sure you “like” and follow us on social media.
It’s been an interesting year with important tax changes that will impact you. Here are some of the changes and issues you need to know about.
Tax return due dates:
- Individuals must file returns by July 15, 2020, for the 2019 tax year;
- C corporation returns are July 15, 2020, for the calendar 2019 tax year;
- Nonprofit returns are still due May 15, 2020, for the calendar 2019 tax year.
Solar credits: The 30% credit for installing solar property on your personal use properties (primary residence, vacation home) is reduced to 26% for property installed after December 31, 2019. The credit drops to 22% for property installed after December 31, 2020, and no credit is available if the solar property is installed after December 31, 2021.
Solar property includes solar panels and can even include home batteries. Please keep these important dates in mind if you are considering installing these items on your personal use property.
Identity theft: Starting in 2019, the IRS permits residents of some states, including California, to obtain an Identity Protection Personal Identification Number (IP PIN) upon request. Taxpayers who are part of the IRS’s IP PIN program receive a letter from the IRS every January containing a special PIN number that prevents their income tax return from being filed without that taxpayer’s unique IP PIN.
Taxpayers must create an IRS account and request their own IP PIN. If you are interested in obtaining your own IP PIN, you can do so at:
Virtual currencies: Over the last couple years, the IRS has ramped up its enforcement of virtual currencies, such as Bitcoin. Most taxpayers who own virtual currencies fail to report their taxable transactions when filing their income tax returns. In 2019, the IRS started sending letters to taxpayers with known virtual currency accounts and now requires taxpayers, on their 2019 income tax return, to affirmatively declare whether they engaged in any virtual currency transactions during the year.
Intentionally failing to report taxable income can have severe consequences. Be sure to provide us with all information containing your virtual currency transactions during the year.
California introduced penalties for failure to carry health insurance: The federal government repealed the penalty for failure to maintain health insurance (referred to as the “individual mandate”) starting with the 2019 tax year. In response to the federal government’s repeal, the state of California will charge an individual who fails to secure coverage an annual penalty of $695 or more when they file their 2020 California tax return. The minimum penalty for families of four or more individuals is $2,085. The penalty can rise as high as 2.5%of household income, which can be many thousands of dollars. Be sure to maintain your health insurance coverage to avoid this costly California tax penalty.
Rental real estate: The Tax Cuts and Jobs Act (TCJA), the major tax reform bill that took effect in 2018, provides a deduction for up to 20% on business income (referred to as the qualified business income deduction, or IRC §199A deduction). In 2019, the IRS provided guidance for taxpayers to claim the 20% deduction on rental real estate, but certain requirements must be met, including strict documentation requirements.
If you have income from rental real estate, please be sure to schedule an appointment (or mail in your tax documents) as early as possible so that we can be sure you have maintained the appropriate documentation and can claim this major deduction.
Property transactions: Did you sell any real estate this year? Be sure to provide copies of escrow statements, as well as the Loan Estimate form, the Closing Disclosure form, and California Form 593, Real Estate Withholding Tax Statement. We need these documents to properly prepare your return. If you can get them to us as early as possible, we can make sure we have everything we need, and make sure that any state withholding documentation is correct.
1099s and K-1s: If you received 1099s or K-1s from investments in 2019, we may extend your return in case these documents are corrected after the original filing deadline. We are seeing increasing numbers of corrected information returns, which require taxpayers to amend their original tax returns to reflect the corrected amounts. In some cases, the amounts are vastly different and can create additional costs in amending the tax returns and potential penalty problems.
Foreign accounts: We must report overseas assets owned by businesses as well as individuals. So, the reporting requirements are increasing and the penalties for failure to report continue to be harsh. Not all foreign holdings must be reported. If, for example, you hold stock in a foreign company through a U.S. broker, those holdings do not have to be separately reported. However, if you hold any other types of foreign assets, including bank accounts and securities accounts, please let us know. If you have any doubt as to whether any of your assets are foreign, please discuss those assets with us. Again, this year we will need information on a business’ foreign holdings as well.
Please take extra care in preparing your tax package and documentation so we can do the best possible job to find new tax benefits that are hidden in the law and protect you from more aggressive audit programs and larger penalties.
Let’s try to file your return as early as possible so you can get your refund quickly!
Your tax professionals at Magidov CPA Firm