COVID-19 Info

Posting Date April 1, 2021

We want to give all our clients an update on our office and the preparation of tax returns.

We want to thank you for your patience. The IRS extending the deadline for individual returns from April 15th to May 17th is some much-needed relief for everyone in our industry because we are simply not being able to get as many tax returns completed in the amount of time we normally would. We understand for some of you we have had your information for over a month at this point. We are trying our best to prioritize completing returns based on drop off date, but we are also trying to meet the needs of clients that are in special circumstances. This has been an unprecedented tax season even surpassing last year.

Our season started with sweeping tax law changes passed in the legislature on December 27th. This resulted in the IRS not opening tax season until February 12th which is 2-3 weeks later than usual. They did this delay because they needed time to implement the changes in the forms and instructions. Even after they opened to start receiving electronically filed returns, there were still forms and instructions that were not finalized causing us to hold certain returns. Plus, our tax software takes time to catch up after the IRS issues final forms or guidance.

To complicate matters further, more legislation was passed less than a month ago on March 11th. This made additional retroactive changes giving taxpayers an exclusion from taxable income of certain unemployment compensation, an exemption from repayment of healthcare subsidies, and other changes. The IRS is still working on coming out with regulation, instructions, and worksheets to adopt these changes. Most notably, we cannot file any returns that have a repayment of ACA healthcare subsidies because the IRS has not issued guidance.

Lastly, unlike any other tax season we are also trying our best to assist our local small businesses to apply for the aid they need to be able to keep serving our community. There have been a multitude of programs that require them to need our assistance to provide financial statements, tax returns, and other accounting and payroll items on an expedited timeframe.

Again, we thank you for your patience and ask that you keep all these circumstances in mind as we take longer than usual to complete your returns.


Posting Date March 18, 2021

Yesterday the IRS announced they have extended the individual deadline from April 15th to May 17th including the payment due if an amount is owed on your individual tax return.

As of now, this extension does NOT include the 1st quarter estimated tax payments, the corporate tax returns, or the fiduciary tax returns that are due April 15th.

Our profession is advocating that everything due on April 15th be extended to May 17th. However, at this time we encourage our clients to be prepared to make their first quarter estimated tax payment on April 15th.


Posting Date July 27, 2020

Many of our business clients have reached the end of your PPP covered period or are nearing it and are eagerly looking forward to getting your forgiveness applications submitted. Unfortunately, lenders are not taking applications yet and will be notifying you once they are. This is because there is active legislation in Congress that would make, yet again, large changes to the forgiveness process. Therefore, the US Treasury has not issued final guidance to the lenders regarding how to process forgiveness applications and it is our understanding the SBA has not opened the processing software the lenders must use to submit the applications either.

CPA firms are being advised by our professional associations to hold off working on any forgiveness applications until the current legislation is resolved. There is no point in preparing applications if the rules are just going to change again. Plus, there is talk of establishing a dollar amount where there would be automatic forgiveness in which case preparing the complicated and time-consuming application would potentially be unnecessary all together.

Hopefully, a Senate bill will be unveiled this week giving everyone a little more clarification about the direction this is going to take. The current information we are seeing is that Congress is going to try and finalize this package before the August 8th recess.


Posting Date June 17, 2020

There have been quite a few changes recently that we want to make sure you are aware of.

  1. The Paycheck Protection Program Flexibility Act was passed and the SBA has issued revised guidance as well as new forgiveness applications in response to the act. Here are a few of the highlights, but I would encourage you to go out to the Treasure website to read over the new applications for forgiveness. Also, a word of caution as we are discovering some holes in how switching to the 24 week covered period is going to work and hoping there is more guidance to come. If you were prepared to use all of the money in the 8 week period, it may be best to continue with that plan.
    1. Optional 24 week covered period instead of 8 weeks.
    2. 60% must be spent on payroll costs instead of 75%.
    3. A shortened “EZ” forgiveness application if you meet certain qualifications.
    4. Timeframe to restore FTEs or salary/wage levels extended to December 31st instead of June 30th.
    5. Additional exceptions for FTE reductions.
    6. Repayment period extended to 5 years for new loans and existing borrowers can negotiate with their lenders to extend.

  1. There is still PPP funding available, but applications must be accepted by June 30th. This does not mean submitted to the bank, but it must be accepted by SBA prior to that date. So, if this is something you still want to apply for, do it ASAP.

  1. The Economic Injury Disaster Loan (EIDL) application has been reopened as of yesterday. Here is a link to the page you can apply from: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources#section-header-0
  1. If you have not previously received the PPP or EIDL, you may want to consider applying for the AK CARES Grant Program.
    1. Here is a link to the State of Alaska page discussing the program: https://www.commerce.alaska.gov/web/ded/AKCARESGrant.aspx
    2. Here is a link to the Credit Union 1 page with more program information, videos that walk you through the process, and links to the application: https://offers.cu1.org/small-business-aid-application

Posting Date April 15, 2020

The IRS has launched the Get My Payment tool on their website, www.irs.gov. This tool lets taxpayers check on the status of their Economic Impact Payment (stimulus check) and update their direct deposit information.

Here is what the IRS says about how to use this tool:

Available only on IRS.gov, the online application is safe and secure to use. Taxpayers only need a few pieces of information to quickly obtain the status of their payment and, where needed, provide their bank account information. Having a copy of their most recent tax return can help speed the process.

  • For taxpayers to track the status of their payment, this feature will show taxpayers the payment amount, scheduled delivery date by direct deposit or paper check and if a payment hasn’t been scheduled. They will need to enter basic information including:
    • Social Security number
    • Date of birth, and
    • mailing address used on their tax return.
  • Taxpayers needing to add their bank account information to speed receipt of their payment will also need to provide the following additional information:
  • Their Adjusted Gross Income from their most recent tax return submitted, either 2019 or 2018
  • The refund or amount owed from their latest filed tax return
  • Bank account type, account and routing numbers

Get My Payment cannot update bank account information after an Economic Impact Payment has been scheduled for delivery. To help protect against potential fraud, the tool also does not allow people to change bank account information already on file with the IRS.

General information about the Economic Impact Payments is available on a special section of IRS.gov: https://www.irs.gov/coronavirus/economic-impact-payment-information-center.


Posting Date April 10, 2020

The IRS has issued more information about the Economic Impact Payment (stimulus check) this morning.

Get My Payment Tool

IRS expects starting April 17th there will be a new tool offered on their website, which is www.irs.gov, where you will be able to check the status of your payment and enter direct deposit information as long as the payment has not already been scheduled. We suggest you watch for this to come available and make sure your payment is going to be scheduled for disbursement the way you want it to be. This tool will also provide information about the date you can expect the payment to be deposited or mailed.

Non-Filers: Enter Payment Info Tool

Those individuals that were not required to file a 2018 or a 2019 return because they are under the normal income limits can use this tool to provide basic information so they can determine your eligibility and allow you to enter bank information so the payment can be made by direct deposit. However, if you are a non-filer because you only receive Social Security, Social Security Disability Insurance, or Railroad Retirement Benefits you will automatically be receiving the $1,200 Economic Impact Payment. These individuals should only use this tool if you have a qualifying child under age 17 to claim for the additional $500 payment per child.

For more information you can visit the following IRS News Update: https://www.irs.gov/newsroom/treasury-irs-launch-new-tool-to-help-non-filers-register-for-economic-impact-payments


Posting Date April 1, 2020

The Department of Treasury has released the Paycheck Protection Program application along with supplemental information.  Starting April 3, 2020, small businesses and sole proprietors can apply.  Starting April 10, 2020, independent contractors and self-employed individuals can apply.

Although it is important to apply quickly, this program works in conjunction with other loan programs and payroll tax credit legislation.  As we receive more guidance, you most likely will want to look at applying for more than one type of assistance as they can be used to pay different expenses.

Under this program, you can apply for a maximum loan amount based on 2 ½ times your monthly payroll.  Besides payroll, funds can be used to pay for rent, interest on mortgages, and utilities.

The best part of this program is that the loan can be fully forgiven when it is used for payroll costs, interest on mortgages, rent, and utilities.

The following link will take you directly to the Department of Treasury application.

https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses 

We will continue to issue additional email blasts when there is direct guidance and/or applications available.


Posting Date March 31, 2020

We are still working, just a little differently. We have implemented restrictions on access to our front lobby and are not taking any in-person appointments. We have some staff working different hours and others working from home.  We ask that you be patient as we are not as efficient under the current circumstances. Our first and foremost concern is the safety and health of our staff and clients. All of our staff is doing the best they can to maintain our level of service while staying safe and wrapping our heads around the regulations that are changing almost daily.

Speaking of the new regulations and loan programs, here is a summary of information available at this time. We have included links to more information where possible and you are always welcome to give our office a call if you have specific concerns to your situation.

Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed March 27, 2020

This is the stimulus payment legislation, but it contained many other things as well.

  • Payroll Items
    • Payroll Tax Credit Refunds for payments under the previously passed FFCRA (see below)
    • Expanded Unemployment Benefits (Self-Employed Individuals may qualify!)
    • Employee Retention Credit – offers a refundable tax credit of wages paid to employees retained if your business was closed/suspended by the COVID-19 or gross receipts declined by more than 50% when compared to quarter in prior year.
  • Loan Items
  • Please see this SBA Resource for information on the following programs
    • Paycheck Protection Program (Forgivable Loan if qualifications met)
    • Economic Injury Disaster Loans and Loan Advance (Not forgivable)
    • SBA Debt Relief (Not forgivable)
    • SBA Express Bridge Loans (Not forgivable)
  • Also see the attached flyer from the U.S. Chamber of Commerce which has other information about these loans and items you might need to apply.
  • Waiver of 10% early withdrawal penalty for distributions up to $100,000 from retirement funds due to the COVID-19
  • New above-the-line Charitable Contribution deduction up to $300
  • Other Items

Families First Coronavirus Response Act (FFCRA) & Emergency Family Leave Medical Extended Act (EFMLEA), signed March 18, 2020

These two acts work together to expand sick leave requirements from April 1st through December 31st. Employers are required to front the costs of paid sick and family leave in specific situations. If you paid out sick or family leave to an employee, those wages may be used as a credit against your payroll tax liability due. The IRS is planning a two-week maximum turn around time for issuing refunds of additional credits.

This page from the federal department of labor gives the basics of what the FFCRA implemented: https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave

Here is a FAQ that can answer many of your questions about how this is supposed to work: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

If you have any questions or concerns, please don’t hesitate to contact our office at 745-0135 or email faadmin@alaska-cpas.com to be directed to the best staff member for your question. We thank you again for your patience during these unpredictable and challenging times.

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At Fosselman & Associates, CPAs, we've been serving the accounting needs of Palmer, AK and the surrounding areas for years. If you need help managing any aspect of your home or business's finances, we want to hear from you.

Please fill out this form and let us know how we can best serve you.

Thank you for visiting. We look forward to working together!

Fosselman & Associates, CPAs

610 S. Bailey Street,
Palmer, AK 99645
T: (907) 745-0135
F: (907) 746-0135
E: FAAdmin@alaska-cpas.com

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