Happy New Year! Important PPP Loan and Tax Deadline Information

Happy New Year!

We wish you a joyful and prosperous 2021.

We have exciting news from the Small Business Administration (SBA). They announced that the Paycheck Protection Program (PPP) has resumed and will remain open through March 31, 2021. 

The next round of PPP loans has $284.5 billion available, including $35 billion for first-time borrowers. 

Costs eligible for loan forgiveness include:

  • Payroll, mortgage interest, rent, utility payments
  • PPE and costs to comply with COVID-19 safety guidelines
  • Covered supplier costs (i.e. essential operations expenditures)
  • Covered operations expenditures (i.e. software, cloud computing, other HR/accounting)
  • Covered property damage costs

Borrowers can choose a covered period for loan forgiveness that is between 8 and 24 weeks. 

More Good News!

If you already received a PPP loan during the first round of funding, the amount that is forgiven will NOT be taxable!

This is a brief summary. Please see the SBA website for full details of the Paycheck Protection Program and/or reach out to us for support…we are here for you!

Tax Deadlines…

The new year also means tax deadlines are fast approaching. For your convenience, here is a list of the upcoming deadlines:

Employers or Institutions (IRS Form W-2 and Form 1099)

These must be sent to employees or independent contractors by Monday, February 1, 2021, to avoid penalties.

The IRS has released a new Form 1099-NEC for nonemployee compensation for 2020.  Form 1099-NEC replaces Form 1099-MISC for nonemployee compensation only. Please let us know as soon as possible if you would like our assistance with the mapping setup required in your accounting software to be compliant with this new form.  Form 1099-NEC is due Monday, February 1, 2021, the same as Form 1099-MISC.

Individuals (IRS Form 1040)

These are due by Thursday, April 15, 2021. For an automatic extension, file Form 4868, and deposit estimated tax by the same date. The extension is only for filing the return. You must submit an estimated payment amount by April 15, 2021, if you expect to owe additional income tax.  

 

Estimated Tax Payments

Form 1040-ES, Estimated Tax for Individuals

Payment Period Due Date
October 1 – December 31, 2020 Friday, January 15, 2021
January 1 – March 31, 2021 Thursday, April 15, 2021
April 1 – May 31, 2021 Tuesday, June 15, 2021
June 1 – August 31, 2021 Wednesday, September 15, 2021
September 1 – December 31, 2021 January 15* of the following year. *See January payment in Chapter 2 of Publication 505, Tax Withholding and Estimated Tax
Fiscal-Year Taxpayers If your tax year doesn’t begin on January 1, see the special rules for fiscal year taxpayers in Chapter 2 of Publication 505

Partnership returns (IRS Form 1065)

These are due Monday, March 15, 2021. The extended deadline is Sept. 15, 2021. 

Form 1065, U.S. Return of Partnership Income

S-Corporation returns (IRS Form 1120-S)

These are due Monday, March 15, 2021. The extended deadline is Sept. 15, 2021. If an entity operates on a fiscal year rather than a calendar year, the return is due on the 15th day of the fourth month following the end of the fiscal year. 

Form 1120-S, U.S. Income Tax Return for an S Corporation

C-Corporation returns (IRS Form 1120)

These are due Thursday, April 15, 2021. The extended deadline is Oct. 15, 2021. If an entity operates on a fiscal year rather than a calendar year, the return is due on the 15th day of the fourth month following the end of the fiscal year.  

Form 1120, U.S. Corporation Income Tax Return

Texas Franchise Tax

Annual franchise tax reports are due Monday, May 17, 2021. When tax due dates fall on a weekend or holiday, the due date will be the next business day. There are distinctions between Non-EFT and EFT Franchise Taxpayers. You can see more information on the Texas Comptroller tax page.

Please reach out to your DMR Accounting and Bookkeeping Services team member if you have questions about the above deadlines. 

You are also welcome to contact Carrie Jareed, our Virtual Client Services Coordinator at csc@dmraccounting.com, or reach out to us via our DMR Client Online Solutions Box

We look forward to partnering with you again for your business and financial success in 2021.

Wishing you a happy, healthy, and prosperous new year!

Important News from DMR Accounting & Consulting

In an unpredictable world, it can be hard to know who you can count on. Client success remains our primary focus and objective here at DMR Accounting and Consulting.

Accordingly, we have several new initiatives at DMR Accounting as we wrap up 2020, and what a year it has been!  We are looking forward to 2021 and what the new year will bring!

  • DMR Core Purpose & Values, how we serve you   
  • Online Solutions Box, tell us what you need and how we can improve
  • PPP2 Relief, a matter of “when” and not “if” additional financial support will be coming from Congress
  • Client Services Coordinator, Carrie Jareed is available and at your service
  • We are fully staffed, welcome your client referrals, and thank you for your continued business and support!

Please read below for important details:

  1. We are committed to your success every day with our CORE PURPOSE  and VALUES that align our team members with you and your business needs. Your success is our success!

                FEARLESS Accounting, One empowering moment at a time. 

      • Clear Direction, Steady Support – We meet people where they are, demystifying the accounting process, gently eroding fears, and transforming lives from floundering to flourishing. 
      • Invest in Your Success – We expect all stakeholders to take ownership of their part in co-creating our mutual success. 
      • We’re 100% ALL IN – We treasure all our relationships. We show up fully, powerfully, honestly, collaboratively, and courageously. 
      • Teamwork makes the Dream Work – We recognize our interconnectedness and the power of a positive and nurturing environment. We call forth and celebrate the highest potential of all. 
      • Above & Beyond – We deliver exceptional, comprehensive solutions in an accurate, responsible and proactive manner.
  1. New for You! We’ve set up a new Online Solutions Box where you may share your kudos, concerns, and suggestions.  Please click the link to complete this form and we will respond to you within two business days. We welcome your thoughts and feedback!
  1. PPP2 Relief: It is a matter of “when” and not “if” additional financial support will be coming from Congress which will hopefully occur before the new year. 

We are committed to keeping you informed about new congressional legislation regarding additional COVID-related small business financial relier. We are attending, at a minimum, bi-weekly professional training sessions sponsored through the American Institute of Certified Public Accountants (AICPA).  

As of yesterday, Congress will likely enact new business support legislation before the end of the year and possibly as early as December 11th as a stand-alone bill or as a part of a new budget bill.  Since they are required to take up both a budget and a defense spending bill in the next few weeks to keep the government open, things could change. 

However, we are hopeful because it seems there is renewed bipartisan support after the Congressional members returned from the Thanksgiving holiday and especially since COVID numbers are on the rise again. 

The three big issues around additional Paycheck Protection Program (PPP) funding relates to: 

(1)  Making expenses deductible (currently they are not) for loan dollars that are forgiven. 

The AICPA believes that there is a high likelihood that the PPP forgivable loan expenses will not be taxable.  However, until a new law is signed, the expenses are currently non-deductible.  Accordingly, we recommend that business owners set aside dollars to pay the tax on PPP loan amounts (possibly due in March/April  2021) even if there is a reasonable expectation that the PPP loan will be forgiven.    

(2)  Potential for automatic forgiveness or simplified forgiveness for some loans.

Smaller PPP loans such as those $150k or less may be given automatic forgiveness or at a minimum, a simplified forgiveness process.  Depending on congressional negotiations, this number could be lower (for example, $50k or less instead of $150k).  Regardless of the amount, for now, we recommend delaying a forgiveness application submission to your bank until a new law is passed or current law guidance details are given.

(3)  PPP2 eligibility will be dependent on businesses who have suffered a 25-35% reduction in revenue.

PPP2 eligibility will be dependent on a 25-35% reduction in revenue for entities with less than 300 employees.  As soon as the law is passed, businesses will need to move quickly to apply for this additional funding.  The application process will be similar to the PPP1 framework.

Please let us know if you have any questions or need our assistance to apply for new PPP2 funding or with your PPP1 forgiveness application. We’re here to help you navigate the financial relief waters.

  1. Carrie Jareed, our Virtual Client Services Coordinator, is your direct contact for questions about your account management. Carrie’s contact information is csc@dmraccounting.com or by phone at 512-655-3679.  Please contact Carrie if you have a change in bill payment type, a concern, a last-minute scheduling change, a change in address, a new client referral, or any other administrative need.
  1. Your Referrals Are Welcome: We are pleased to say that we are fully staffed with experienced financial professionals. If you are happy with our service, a referral is the highest compliment we can receive. If you have colleagues, friends, or family members who could benefit from our services, we would greatly appreciate your trust and support by sending an introduction email with their contact information to Carrie Jareed at csc@dmraccounting.com.

We appreciate our clients continued business and strive to deliver accurate and timely financial performance records. We want to enable you to grow while meeting the unique opportunities and challenges you may face today, tomorrow, and years into the future.   

We send you wishes for health and prosperity this holiday season, and a very Happy New Year!

Wishing You a Safe and Happy 2021

PPP Loan Forgiveness & Updated Tax Deadline Support for you!

I hope this note finds you well given the recent tumultuous times. I know we’re all experiencing varying levels of uncertainty between the pandemic, the related economic fallout, and the sobering societal unrest. Please reach out if I can be of assistance with questions related to the CARES economic relief package. 

We’ve heard that many of you have received PPP Loans which are offering such great relief during these challenging times!  Please let us know if you would like assistance with navigating the rules or for submitting the loan forgiveness application.  

I’m also writing to you today with an update of upcoming tax deadlines. There have been many changes and I want to send you a short reminder with some helpful links. 

Updated 2020 Tax Deadlines:

Many state franchise tax and federal tax return deadlines have changed so we wanted to give you a list for your reference.

Internal Revenue Service

According to the IRS website many federal tax filing and payment deadlines from April 1, 2020, to July 14, 2020, have been pushed to July 15, 2020.

 

Individuals

File Form 1040, or for an automatic extension, file Form 4868 and deposit estimated tax.

Estimated Tax Payments
Form 1040-ES, Estimated Tax for Individuals

Payment Periods and Due Dates:
Payment Period: January 1- March 31
Due Date: Normally April 15, See Filing and Payment Deadline Extended to July 15, 2020 – Updated Statement for tax relief on account of Coronavirus Disease 2019.

Payment Period: April 1- May 31
Due Date: June 15 – Extended to July 15, 2020

Payment Period: June 1- August 31
Due Date: September 15

Payment Period: September 1 – December 31
Due Date: January 15* of the following year. *See January payment in Chapter 2 of Publication 505, Tax Withholding and Estimated Tax

Payment Period: Fiscal Year Taxpayers
Due Date: If your tax year doesn’t begin on January 1, see the special rules for fiscal year taxpayers in Chapter 2 of Publication 505.

Partnerships, Corporations, and S-Corporation details

If a fiscal year partnership or S-corporation has a return due to be filed on or after April 1, 2020, and before July 15, 2020, that filing requirement has been postponed to July 15, 2020. Any return filings that were due on March 16, 2020, were not postponed. 

Form 1065, U.S. Return of Partnership Income

Form 1120, U.S. Corporation Income Tax Return

Form 1120-S, U.S. Income Tax Return for an S Corporation

Texas Franchise Tax

The Texas Comptroller of Public Accounts is automatically extending the due date to file and pay the 2020 Texas franchise tax reports to July 15, 2020. There are distinctions between Non-EFT and EFT Franchise Taxpayers. You can see more information on the Texas Comptroller tax page.

Stay well and know that DMR Accounting & Consulting is here to help!