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CLIENT LETTER & WORKSHEET - TAX YEAR 2020
The letter was mailed on January 11 to the address on file. Access the on-line version by clicking here.
FILING DEADLINE EXTENDED TO MAY 17th:
THE IRS EXTENDS FILING DEADLINE TO MAY 17. IT IS NOT YET KNOWN IF STATES WILL FOLLOW THE FEDERAL GUIDELINE.
REVISED PPP LOAN GUIDELINE:
SECOND DRAW FOR SMALL BUSINESSES ENDS 3/31/2021.
3/4/2021: NEW GUIDANCE FOR BUSINESS OWNERS, CONTRACTORS, FREELANCERS AND SINGLE MEMBER LLC'S THAT FILE FORM 1040, SCHEDULE C - PROFIT & LOSS FROM BUSINESS:
EFFECTIVE IMMEDIATELY, THE PPP DRAW AMOUNT WILL BE BASED ON NET SALES (Gross receipts less Cost of Goods Sold) INSTEAD OF NET INCOME. THIS REVISED APPROACH MAY RESULT IN SIGNIFICANTLY HIGHER PPP AMOUNT. PLEASE SEE QUALIFICATIONS BELOW FOR THE SECOND DRAW PPP. UNFORTUNATELY, IF YOU HAVE ALREADY RECEIVED A PPP LOAN BASED ON NET INCOME, YOU ARE NOT ELIGIBLE TO SEEK ADDITIONAL LOAN PROCEEDS RETROACTIVELY.
CURRENT STIMULUS PAYMENT GUIDELINES:
Issue Number: COVID Tax Tip 2021-35
IRS is issuing third round of Economic Impact Payments The IRS started issuing the third round of Economic Impact Payments. No action is needed by most taxpayers. The IRS will issue payments automatically by direct deposit and through the mail as a check or debit card. Many people will receive the third payment the same way they received the first and second Economic Impact Payments. Because these payments are automatic for most eligible people, there’s no need to contact financial institutions or the IRS. People can check the Get My Payment tool on IRS.gov for status of their third stimulus payment. Highlights of the third Economic Impact Payments
In general, most people will get $1,400 for themselves and $1,400 for each qualifying dependent claimed on their tax return. As with the first two Economic Impact Payments, most people will receive their third payment without having to take any action. The third Economic Impact Payment is based on the taxpayer's latest processed tax return from either 2020 or 2019. This includes anyone who successfully registered at IRS.gov using the agency's Non-Filers tool last year or submitted a simplified tax return. If the IRS received and processed a taxpayer's 2020 return before issuing someone’s third Economic Impact Payment, the amount is based on the 2020 return. Those who received the first or second payment but don't receive a payment by direct deposit will generally receive a check or a prepaid debit card, referred to as an EIP Card. The IRS will not add the third payment to an existing EIP card that people received for the first or second round of stimulus payments. Under the new law, the IRS can’t apply the third Economic Impact Payment to past-due federal debts or back taxes. Who is eligible for the third Economic Impact Payment
Generally, U.S. citizens or U.S. resident aliens are eligible for the full amount of the third Economic Impact Payment if they and their spouse, if they’re filing jointly, are not a dependent of another taxpayer and have a valid Social Security number and their adjusted gross income on their tax return does not exceed: $150,000, if married and filing a joint return or if filing as a qualifying widow or widower. $112,500, if filing as head of household. $75,000 for eligible individuals using any other filing statuses, such as single filers and married people filing separate returns. The payments phase out -- or reduce -- above those AGI amounts. This means taxpayers will not receive a third payment if their AGI exceeds: $160,000, if married and filing a joint return or if filing as a qualifying widow or widower. $120,000, if filing as head of household. $80,000 for eligible individuals using other filing statuses, such as single filers and married people filing separate returns. More details about the third round of Economic Impact Payments are available on IRS.gov. Share this tip on social media -- #IRSTaxTip: IRS is issuing third round of Economic Impact Payments. https://go.usa.gov/xsMfN
INCOME TAX FILING DEADLINES:
(subject to change):
Federal Government filing deadlines as follows:
- Personal, Sole Proprietors and Single Member LLC's - May 17
Extension Expires - October 15
- Partnerships, Multiple Member LLC's & S-Corporations - March 15
Extension expires September 15
- C Corporation - April 15
Extension expires October 15
- Non-Profit - May 15
Extension expires November 15
- Foreign Bank Account Reporting - May 17
Extension expires October 15
Our Policy for Completing Personal Income Tax Returns:
We will complete all personal income tax returns by the April 15th deadline IF our interview is completed by March 1 and all relevant documents and information have been received. For all other appointments, we will make all possible efforts to complete your tax returns as promptly as possible.
When a tax return cannot be completed by April 15th, the IRS and states allow extended time to complete WITHOUT PENALTY.
Note that extensions protect you from a Late Filing Penalty but not from the Tax Underpayment Penalty or Interest. Taxes are due in the quarter when related income is earned and taxes are incurred - - generally, 4/15, 6/15, 9/15 and 1/15. Any payment not made during the regularly scheduled quarter should be made by 4/15 with the extension.
I. 2020 STIMULUS TAX CREDIT
- Stimuls payments received were an ADVANCE ON A NEW 2020 TAX CREDIT.
- Stimulus payments were based on 2018/2019 tax information. If there are changes to your 2020 tax filings you may qualify for additional payments.
II. RETIREMENT PLAN WITHDRAWALS RELATED TO COVID-19
(up to $100,000)
- Withdrawals taken in 2020 must be related to COVID-19.
- Such withdrawals are NOT subject to the 10% early withdrawal penalty if you're under 59 1/2 years old. No penalty applies to older individuals.
- Withdrawals taken in 2020 are NOT TAXABLE IF FUNDS ARE REDEPOSITED to a qualified retirement account within 3 years.
- Known Qualifications:
- You were diagnosed with COVID-19 in 2020 or SARS-COV-2 in 2019.
- You suffered financial hardship as a result of COVID-19 impact on your job; that is, furlough, reduced work hours/ less pay or laid off/ unemployed.
- You were unable to work due to the unavailability of Childcare facilities or babysitters.
- You closed your business or reduced hours of operation.
- Reduced income from Self Employment/ Freelancing/ Gig Work.
III. LOANS FROM RETIREMENT ACCOUNT RELATED TO COVID-19 (up to $100,000)
- Repayments may be postponed up to 1 year.
- The 5 year normal repayment period may be extended by the period in which the loan was postponed.
- Interest will continue to accrue during the period of postponement.
The Small Business Administration (SBA) is now accepting applications for the SECOND DRAW of PPP.
What is currently known:
- Program reopens 1/11.
- Aimed at Small Businesses (less than 300 employees) that experienced a 25% reduction in Gross Receipts for 2020 as compared to 2019.
- For Sole Proprietors and Single Member LLC's who file Schedule C: PPP amount is now based on Schedule C, line 7 amount (formerly Schedule C, line 31). This is a much more advantageous calculation.
- You must have used all of the First Draw PPP funds for eligible expenses; i.e., you must qualify for loan forgiveness.
- Any PPP funding recieved in 2021 will NOT be included as income.
- EIDL grants received in 2020 will no longer be used to reduce the amount of PPP Forgiveness. If your forgiveness amount was reduced by the EIDL amount received you should contact the bank for an adjustment.
- If your business temporarily closed, you may still apply for PPP to help you reopen.
- If you filed for Bankruptcy, you do not qualify for the new PPP.
Other Current Announcements
TAX LAW UPDATES APPLICABLE TO MOST INDIVIDUALS
Sick Leave Credit for Self-Employed
If your Self-Employed/ Freelance/ Gig Income suffered in 2020, and you meet other COVID-19 related conditions, you may qualify for a new credit.
New Charitable Donation Deduction
A limited Charitable Donation deduction is now available for EVERYONE even if you do not itemize deductions.
Earned Income Credit Flexibility
If you were eligible for the Earned Income Credit in 2019, but don't qualify in 2020, you may still be eligible to receive the credit.
Business Meals - 100% Deduction (2021)
Qualifying Business Meals deductions have been increased to 100% deductable for 2021. Use this for planning purposes. The deduction remains limited to 50% for 2020.
State and Local Income Tax Deduction Limitation Workaround
If you operate a business in NJ, you may be eligible to deduct a larger portion of your Property Tax.
Please send all E-MAIL messages to: Taxaccserv@BRISAFinancial.com
Based on strict IRS data encryption rules to protect your information and identity, DO NOT SEND DOCUMENTS VIA E-MAIL. Please ensure to use our Secure Server to send any tax documents (see link below) or fax or USPS mail.
- SECURE AND EASY WAY TO SEND TAX DOCUMENTS & IMPROVED DATA PROTECTION VIA OUR SECURE SERVER:
Go to "Send Forms Securely" tab on left or click below:
P.O. BOX 8
PERRINEVILLE, N.J. 08535
BRISA Financial Services Company Overview
Since 1990, we’ve provided personalized professional accounting, tax preparation, business consulting and start-up services to:
-Individuals and their Families
-Businesses - Corporations, LLC’s, Partnerships, Sole Proprietorships and Estates.
We started as a small firm dedicated to tailoring a personalized approach for each client and have never forgotten what has kept us in business and growing for 31 consecutive years:
First, and Foremost a Personalized Core Approach:
No cookie-cutter, impersonal services here…
1. Firstly, we take the view that we are your trusted partners, friends and
2. Our information finding session/ interview is personal, friendly and exhaustive while respecting your privacy.
3. We spend the time to get to know all the particulars of your situation and guide you through the process in a friendly and constructive manner.
4. We put ourselves in your shoes and work with you through the thought process to bring out ideas, and customize an optimal strategy for your particular situation.
5. We prepare your work with the same care and diligence as if it were our own.
We have in-depth knowledge and expertise in a wide spectrum of industries and professions covering Artists to Zookeepers. Since we work through referrals only, our focus is on doing our personal best for each and every client, every time. We never take clients for granted or short-cuts that compromise the quality of our work ~ the ultimate goal is to look out for your interest and establish long-lasting relationships.
We utilize over 35 years of diversified professional and real-life experiences to focus on what's important to you.
1. Tax Preparation and Statutory Filings (Personal & Business)
2. Electronic Filing (Federal & All States)
3. Financial Statements Compilation & Write-up
4. Proposals to Banks, Prospective Employers & Other Third Parties
5. Accounting and Bookkeeping
6. Accounting Structure Set-up
7. Business Formation & Incorporations