A Professional | Proactive |
Personable | San Diego CPA Firm
Conveniently Located in Historic Liberty Station
Tax & Advisory Specialists
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CARES Act / COVID-19
A Brief Summary of the CARES ACT (Coronavirus Aid, Relief, and Economic Security Act)
On March 27, 2020 President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). The CARES Act contains many provisions for businesses and individuals. The most significant provision for small businesses loans is the Paycheck Protection Program (PPP).
FILING SEASON CHANGES:
April 15, 2020 income tax filing and payment deadline has been moved to July 15, 2020
This applies to:
2019 Federal and State balances due
2020 first quarter estimated tax payments
This does not yet apply for:
2020 June 15, 2020 second estimated tax payment
Eligible individuals will be receiving economic impact payments. These advance payments of a 2020 taxable year credit are equal to: $1,200 per qualifying individual; with $2,400 for married taxpayers filing jointly); plus $500 per qualifying child under the age of 17 (defined under IRC SEC 152(c).
The payments will be made as soon as possible based upon your 2019 return or on your 2018 return if you have not yet filed your 2019 return. The payments will be made by electronic direct deposit. An IRS.gov available website should be up and running in a few days for taxpayers to provide their banking information. CAUTION: there will be many fraudulent websites, emails, and social media trying to encourage you to update your banking information. Take precautions to only access the IRS.gov website to update your banking information.
The amount of the taxable year credit is phased out for filers with an adjusted gross income for: Single $75,000; Head of Household $112,500; and Married Filing Joint $150,000.
Retirement Plan Provisions:
Taxpayers may make penalty-free coronavirus-related withdrawals of retirement funds of up to $100,000 in the aggregate between January 1, 2020 and December 31, 2020. The taxpayer must have a direct impact from the COVID-19 virus: diagnosis, family member diagnosed, or a direct financial impact. These funds can be repaid within three years, or the income can be spread over three years if not repaid. There is also a temporary waiver of required minimum distribution (RMD) requirements for the 2020 calendar year for SEP, or SIMPLE individual retirement account (IRA) owners and qualified participants of retirement age.
An individual who doesn’t itemize deductions may take an above-the-line qualified charitable contribution of up to $300 for the 2020 taxable year. The limits were temporarily increased to 100% of their adjusted gross income (up from 60%).
Why Mann & Associates
You benefit because
we are committed to:
reducing your accounting fees by efficiently and cost-effectively managing your account. You'll know your fees up front.
becoming your trusted advisor-responsive, open and approachable.
providing close, personal attention to your financial needs.
giving you the assurance that the personal assistance you receive comes from years of training, technical expertise and keen financial insight.
continuing our education with up-to-date knowledge of tax laws and regulations.
utilizing the latest technology to bring you superior service.
Mann CPAs One-Sheet
We are happy to have an updated promotion sheet for you to download. The one-page summary of Mann & Associates APC is ideal to share with business colleagues, friends and family.
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You will never receive an
email from the IRS.
If you receive an email like the one below, as we did this morning, it is fraudulent. DO NOT RESPOND. NOTE also the misspelling of the word "instructions" and the use of "cause" instead of "because." Do not click on any links or reply.
From: "Internal Revenue Service" <>
To: Internal Revenue-logs <>
Subject: IRS Service Mail
Please follow instrustions cause your account needs verification
Sign In here
INTERNAL REVENUE SERVICE
Areas of Practice
Financial Reporting & Assurance
"With Mann & Associates, I know they are looking at our big picture all year long, not just during tax season. Jeanne returns my calls and is very approachable."
"Mann & Associates anticipates and creates opportunities for our company. In addition to extraordinary service, Mann and her team are consummate professionals. They know accounting, audits, taxes and more."
Cindy Kunz of the San Diego Sandwich Company celebrates 20 year business anniversary with her CPA Jeanne Mann!
We are still in Liberty Station. We just moved into a different building:
Mann & Associates APC
Certified Public Accountants
2535 Truxtun Road, Suite 205
San Diego, CA 92106
Call today to set up a consultation with Jeanne Mann, CPA at (619) 222-5900.
Net Operating Losses (NOL):
The CARES Act allows for temporarily reinstatement of NOL carrybacks. NOLs may be carried back five years for NOLs arising in 2018, 2019, and 2020 taxable years for all taxpayers. The new law also temporarily repeals the 80% limitation on NOL to be carried forward.
Payroll Tax Payments:
All businesses other than those that receive loan forgiveness under the loan Paycheck Protection Program (PPP) (see below) may defer their employer Old-Age, Survivors, and Disability Insurance (OASDI) employment taxes for the period March 27, 2020 through December 31, 2020. The deferred payments are due 50% by December 31, 2021, with the other 50% due by December 31, 2022.
Employee Retention Credit:
Eligible employers are allowed a 50% of the qualified wages paid to each employee for wages paid March 12, 2020 and before January 1, 2021 up to a maximum of $5,000 ($10, 000 in qualified wages). Eligible employers must have had their operations partially or fully suspended due to orders from any governmental authority, or they experienced significant decline in gross receipts.
Business Interest Limitation:
The business interest deduction limitation is increased from 30% to 50% for 2019 and 2020 taxable years.
Qualified Improvement Property:
Qualified improvement property as 15-year property is eligible for bonus depreciation.
SMALL BUSINESS LOANS
Paycheck Protection Program (PPP):
The CARES Act provides an additional $349 billion to the Small Business Administration (SBA) to guarantee loans related to COVID-19. The SBA will guarantee 100% of Paycheck Protection Program loans made in an amount equivalent to 2.5 times a qualified small business’s monthly payroll costs, up to a maximum of $10 million. If the business retains its workforce at specific salary levels, the loans may be forgiven for amounts used to cover basic operating expenses such as payroll costs, rent or mortgage, and utilities for up to eight weeks from the loan origin date. Borrower and lender fees, collateral and personal guarantee requirements are waived. The eligible payroll costs have limits and specific criteria. Loan forgiveness is also limited and related to payroll costs, employee retention and use of funds. Loans not forgiven are due in two years with interest at 1%, and the first payment is deferred for six months (incurring interest during this time).
Click here for PPP application download.
PPP Eligible Businesses:
Any business, including sole-proprietorship, self-employed individuals, and independent contractors in operation on February 15, 2020 if they have fewer than 500 employees. For the hotel and restaurant industry, the 500 threshold is applied per location. Nonprofit organizations, tribal business, or veterans’ organization are also eligible for the program. In some cases, businesses in certain industries may have more than 500 employees if they meet the Small Business Administration’s size standards for those industries.
Economic Injury Disaster Loans:
The new law allows for entities eligible to receive up to $2 million in direct loans from the SBA and loan guarantees for substantial economic injury caused by the COVID-19 pandemic. A $10,000 grant component is also available.
A business must have substantial economic injury, defined as unable to meet its obligations as they mature or to pay its ordinary and necessary operation expenses. The loan proceeds may be used for working capital necessary to carry your concern until resumption of normal operations, expenditures necessary to alleviate the specific economic injury, providing paid sick leave to employees, maintaining payroll, meeting increased costs to obtain materials, making rent or mortgage payments, and repaying obligations that cannot be met due to revenue losses.
Economic Injury Disaster Loans Eligible Businesses:
If a business has fewer than 500 employees, including sole-proprietorships, self-employed individuals, independent contractors, tribal business cooperatives, and Employee Stock Ownership Plans (ESOP) in operation during January 1, 2020 to December 31, 2020), they are eligible. Nonprofit organizations are also eligible. Small business must meet the Small Business Administration’s size standards.
Please be advised, some of the CARES Act programs are complex and have only been briefly summarized in this article. If you have questions about these provisions, please call our office at (619) 222-5900.
Click here for government and additional links to resources.
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