New Grant For Small Businesses Is Now Available

The U.S. Chamber of Commerce Foundation just announced a new grant program, the “Save Small Business Fund”, that is currently accepting applications.

Eligible small businesses will be considered for a grant of $5,000. While the grant must be located in an “economically vulnerable community”, there is an easy to use online tool where you can enter the zip code to find out if the town qualifies.

To qualify, employers:

  • Must have 3 to 20 employees.
  • Be located in an economically vulnerable community.
  • Must have been harmed financially by the COVID19 pandemic.

All you need to apply is a signed W-9 form available here, and approximately 10 minutes to complete the application.

Refer to https://savesmallbusiness.com/ for more detailed information and to apply for this program.

Grants will be awarded on a weekly basis, but you only need to apply one time to be eligible for funding.

Please contact us if you have any questions or need assistance in applying for this grant.

Should you have any questions or wish to speak to a team member, please don’t hesitate to call us at 201-599-0008.

Unemployment Assistance for the Self-Employed

The New Jersey and New York Departments of Labor recently posted instructions on their websites for independent contractors and the self-employed who are newly eligible for unemployment benefits under the CARES Act:

New Jersey
https://myunemployment.nj.gov/labor/myunemployment/independentcontractors.shtml

New York
https://www.labor.ny.gov/unemploymentassistance.shtm

If you typically file a “Schedule C” as part of your annual income tax filings and your business has been financially impacted by the Coronavirus pandemic, you should consider filing an unemployment claim as soon as possible.  Although both the NJ and NY DOLs are experiencing high traffic and delays, you will eventually be able to file a claim.  Furthermore, the claim will be effective from the date you had a reduction of income.

Both links above have step-by-step instructions of how you can file for unemployment.  The NJ DOL website also offers FAQs in a short 2 page format.

Please contact us with any additional questions you may have.

Did You Know?

Our updated office policies and tax-filing changes are available on our website due to COVID-19. This information can be found at the top of our website, or by clicking here.

Update on Economic Impact Payments

The IRS announced on Wednesday, April 15th, the launch of its “Get My Payment” website, which permits taxpayers to check on the date they can expect to receive their economic impact payment and update their direct deposit information.

The IRS notes that the “Get My Payment” website will allow people to provide their direct deposit bank account information, if they did not use direct deposit on their 2018 or 2019 tax return, so they can receive their payment more quickly as well as find out when to expect the payments.

However, it is unclear how well the site is working at this time.  While some users have been able to obtain their payment information, others are reporting that the site was giving them an error message indicating “Payment Status Not Available … we cannot determine your eligibility for payment at this time.”

The website can be accessed at https://www.irs.gov/coronavirus/get-my-payment

Should you have any questions or wish to speak to a team member, please don’t hesitate to call us at 201-599-0008.

Information on Unemployment Assistance

The new Federal law signed March 27th provides three types of assistance to many workers impacted by COVID-19:

  • Pandemic Unemployment Assistance (PUA): expands eligibility for individuals who are typically ineligible for Unemployment benefits, for example independent contractors, and self-employed and “gig” workers.
  • Pandemic Unemployment Compensation (PUC): provides an additional $600 per week, on top of regular benefits, to all recipients of Unemployment Insurance; retroactive to the week ending April 4, 2020.  It will be a separate payment from your regular unemployment benefit and will be available to those receiving benefits until July 25, 2020.
  • Pandemic Emergency Unemployment Compensation (PEUC): provides an additional 13 weeks of Unemployment benefits to all recipients.

For further information, the following links from New Jersey and New York should answer many of your questions:

https://www.nj.gov/labor/worker-protections/earnedsick/covidFAQ.shtml

https://www.labor.ny.gov/ui/faq.shtm

While we await additional guidance, we recommend that if anyone needs to apply for these benefits, they should start the application online as soon as possible to get this process in motion.

Should you have any questions or wish to speak to a team member, please don’t hesitate to call us at 201-599-0008.

CARES ACT (Part III: Individual Relief Provisions)

Individual Relief Provisions Contained in the CARES Act

The CARES Act (the “Act”) has been passed by Congress and signed into law. This is part three of our series, which focuses on various provisions contained in the Act. Part I summarized the business relief provisions contained in the Act.  Part II summarized other business and tax related provisions.  Finally, Part III (below) focuses on the individual relief provisions. 

Recovery rebates: The Act provides for payments to taxpayers — “recovery rebates” — which are being treated as advance refunds of a 2020 tax credit. Under this provision, individuals will receive a tax credit of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child. The credit is phased out for taxpayers with adjusted gross income (AGI) above $150,000 (for joint filers), $112,500 (for heads of household), and $75,000 for other individuals. The credit is not available to nonresident aliens, individuals who can be claimed as a dependent by another taxpayer, and estates and trusts. Taxpayers will reduce the amount of the credit available on their 2020 tax return by the amount of the advance refund payment they receive.

Unemployment Insurance: The Act expands unemployment benefits available to millions of workers impacted by the Coronavirus. Both “eligible employees” and “covered individuals” will receive a $600 enhancement in addition to their normal state benefits.  The “covered individuals” is an expansion of the unemployment program to include several individuals who did not previously qualify for unemployment benefits.   Although the federal government will provide the funding, state unemployment agencies will administer and issue the benefits.

Retirement plans: Taxpayers can take up to $100,000 in Coronavirus-related distributions from retirement plans without being subject to the 10% additional tax for early distributions. Eligible distributions can be taken up to Dec. 31, 2020. Coronavirus-related distributions may be repaid within three years.

The Act also allows loans of up to $100,000 from qualified plans, and repayment can be delayed. The Act temporarily suspends the required minimum distribution rules in Sec. 401 for 2020. The Act delays 2020 minimum required contributions for single-employer plans until 2021.

Charitable deductions: The Act creates an above-the-line charitable deduction for 2020 (not to exceed $300). The Act also modifies the Adjusted Gross Income (AGI) limitations on charitable contributions for 2020, to 100% of AGI for individuals and 25% of taxable income for corporations. The Act also increases the food contribution limits to 25%.

Health plans: The rules for high-deductible health plans (HDHPs) are amended to allow them to cover telehealth and other remote care services without charging a deductible. Over-the-counter menstrual care products are added to the list of items that can be reimbursed out of a health savings account, Archer medical savings account, or health reimbursement arrangement.

Should you have any questions or wish to speak to a team member, please don’t hesitate to call us at 201-599-0008.

CARES ACT (Part II: Business and Tax-Related Provisions)

Business Tax Related Provisions Contained in the CARES Act

The CARES Act (the “Act”) has been passed by Congress and signed into law. This is part two of a three part series, which focuses on various provisions contained in the Act. Part I summarized the business relief provisions contained in the Act.  Part II (below) summarizes other business and tax related provisions.  Finally, Part III will focus on the individual relief provisions. 

Payroll tax credit refunds: The Act provides for advance refunding of the payroll tax credits enacted last week in the Families First Coronavirus Response Act. The credit for required paid sick leave and the credit for required paid family leave can be refunded in advance using forms and instructions the IRS will provide. The IRS is instructed to waive any penalties for failure to deposit payroll taxes if the failure was due to an anticipated payroll tax credit.

Payroll tax delay: The Act delays payment of 50% of 2020 employer payroll taxes until Dec. 31, 2021; the other 50% will be due Dec. 31, 2022. For self-employment taxes, 50% will not be due until those same dates. If a taxpayer elects to take advantage of the PPP Loan Forgiveness or other Treasury programs (discussed in Part 1), they are not eligible for this delay.

Net operating losses (“NOLs”): The Act temporarily repeals the 80% income limitation for net operating loss deductions for years beginning before 2021 (this includes 2020, 2019, and 2018). For losses arising in 2018, 2019, and 2020, a five-year carry-back is allowed (taxpayers can elect to forgo the carry-back). Taken together, this allows companies to utilize NOLs from 2018, 2019, and 2020 to receive refunds on taxes paid in prior years and to reduce tax payments in 2020 (and beyond).

Excess loss limitations: The Act modifies the excess business loss limitation applicable to non-corporate taxpayers for 2018, 2019 and 2020.  This will allow them to offset up to 100% of their taxable income (rather than the $250k or $500k limit for single or married-filing-jointly taxpayers, respectively).

Corporate alternative minimum tax (“AMT”): The Act modifies the AMT credit for corporations to make it a refundable credit for 2018 tax years.

Qualified improvement property: The Act makes technical corrections regarding qualified improvement property under Sec. 168 by making it 15-year property (as opposed to the 39-year property previously in effect). This will allow businesses to claim accelerated depreciation on “qualified” improvement property.

Aviation taxes: Various aviation excise taxes are suspended until 2021.

Should you have any questions or wish to speak to a team member, please don’t hesitate to call us at 201-599-0008.

CARES Act (Part I: Business Relief Provisions)

Business Relief Provisions Contained in the CARES Act

The CARES Act (the “Act”) has been passed by Congress and signed into law. The next three emails, including this first part, will focus on various provisions contained in the Act. Part I summarizes the business relief provisions contained in the Act.  Part II will summarize other business and tax related provisions.  Finally, Part III will focus on the individual relief provisions. 

The Employee Retention Credit is a fully refundable tax credit tied to the payment of employee wages. Employers are permitted to claim a 50% credit of wages paid up to $10,000 per employee. This is only available to employers whose operations were fully/partially suspended due to COVID-19 OR whose gross receipts declined by more than 50% compared to the same quarter in the prior year.

The SBA 7(a) Loan Program has been expanded to include the following:

Paycheck Payback Program (PPP): The PPP loan is determined by a formula tied to the business’s payroll costs. The maximum loan is 2.5x the average monthly payroll from the past 12 months.

Allowable loan borrowing uses include payroll, insurance premiums, mortgage, rent and utility payments. The period to claim this is between February 15th and June 30th, 2020. This loan can be forgiven, but is based on a calculation of wages paid. Borrowers that re-hire workers previously laid off will NOT be penalized for having a reduced payroll at the beginning of the period.

The loan forgiveness will be proportionally reduced if the average number of employees is reduced during the covered period as compared to the same period in 2019. In addition, it will be reduced by the amount of any reduction in total employee wages during the covered period in excess of 25% of the total wages. However, if you rehire any laid off workers by June 30, you will not be penalized for having a smaller workforce at the beginning of the period.

SBA Express Loan:  Accelerates the turnaround time of processing a loan. These SBA loans will be issued with a 3.75% interest rate.

Emergency Economic Injury Disaster Loan (EIDL):  Establishes an emergency grant to allow an eligible entity who has applied for an EIDL to request an advance of up to $10,000 which must be distributed in 3 days after the application is received. The advance payment may be used for 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. Applicants are not required to repay the advance payment, even if they are subsequently denied the EIDL.

Please keep in mind, if you utilize the SBA loan forgiveness program, you may not qualify for the employee retention credit (and vice-versa).

While the SBA website will be handling any “Disaster Loan Assistance” applications, the FDIC insured banking institutions and lenders will handle any SBA 7(a) Loan applications. If you believe you may qualify for any SBA 7(a) Loan, we recommend that you reach out to your banking institution to begin this process immediately.  In addition, please contact us at GCS to review your specific needs and decide the best “next steps” to obtain any relief necessary for you and your business.

Should you have any questions or wish to speak to a team member, please don’t hesitate to call us at 201-599-0008.

Legislation Updates

Federal Tax Filing Deadline Extended

The Treasury Department announced today an extension of the April 15th  filing  deadline for individuals and corporations (who use the calendar year-end).  The extended Federal filing deadline is now July 15, 2020.

Coronavirus Relief Legislation Provides for Tax Credits for Employers

President Trump signed into law H.R. 6021, The Families First Coronavirus Response Act. The Act provides for tax credits for employers who provide family or medical leave or paid sick leave for their employees who miss work for various COVID-19 (Coronavirus) related reasons.

The key provisions of The Act provide for employer payroll tax credits for required paid family leave and required paid sick leave pertaining to employees and self-employed individuals. These provisions are described below.

Payroll tax credit for required family leave

The payroll tax credit for required family leave provides for an employer payroll tax credit that equals 100% of the qualified family leave wages paid by an employer. Generally, it requires employers with less than 500 employees to provide emergency leave when an employee is unable to work or telework due to care for a son or daughter under 18 because of a public health emergency pertaining to the Coronavirus.

Self-employed individuals will be eligible for qualified family leave equivalent amounts if they would be entitled to receive paid leave if the individual was an employee. Such individuals will be able to claim a refundable credit against income tax.

Generally, the credit is limited to $200 in eligible daily family leave wages received by an employee, subject to a maximum wage threshold per employee. Eligible wages consist of wages paid within 15 days of enactment of this Act through December 31, 2020. The credit will be applied against the employer portion of social security taxes. Other restrictions and limits apply to the credit.

Payroll tax credit for required paid sick leave

The payroll tax credit for required sick leave provides for an employer payroll tax credit equal to 100% of qualified sick leave wages paid by an employer. Generally, it requires employers with less than 500 employees to provide up to 80 hours of paid sick time through the end of 2020 if the employee is unable to work due to having Coronavirus or caring for someone who has Coronavirus.

Self-employed individuals will be eligible for qualified sick leave equivalent amounts if they would be entitled to receive paid leave if the individual was an employee. Such individuals will be able to claim a refundable credit against income tax.

Generally, the credit is limited to $511 in eligible daily sick leave wages received by an employee who has or has been exposed to Coronavirus, and $200 for other workers. Eligible wages consist of wages paid within 15 days of enactment of this Act through December 31, 2020. The credit will be applied against the employer portion of social security taxes. There are other restrictions and limits to the credit.

GCS is committed to helping our clients in any manner during this crisis. If you have more questions on how this new law may impact your business, please contact us.

Latest Robocall Scam

At GCS, we strive to keep you informed of events, changes to laws, and other areas that may impact you, both personally and professionally.  One area that requires constant vigilance is avoiding potential scams and fraudulent activity from fake phone calls.

The Internal Revenue Service is cautioning taxpayers to be aware of fraudulent phone calls in which the perpetrator threatens to cancel victims’ Social Security numbers if they do not pay their taxes over the phone.

In a recent email to GCS, the IRS writes:

Taxpayers should be on the lookout for new variations of tax-related scams. In the latest twist on a scam related to Social Security numbers, scammers claim to be able to suspend or cancel the victim’s SSN. It’s yet another attempt by con artists to frighten people into returning ‘robocall’ voicemails.

Scammers may mention overdue taxes in addition to threatening to cancel the person’s SSN. If taxpayers receive a call threatening to suspend their SSN for an unpaid tax bill, they should just hang up.

Make no mistake…it’s a scam.

We want to remind you to not provide any personal or financial information over the phone unless you are positive you know the caller is legitimate.  When in doubt, please contact us directly or simply hang up the phone.

While the IRS has authorized private collection agencies, they will never call to demand immediate payment using specific payment methods such as a prepaid debit card, iTunes gift card, or wire transfer. In addition, they will never ask a taxpayer to make a payment to person or organization other than the U.S. Treasury.  Finally, they would never bring in the local police or other law-enforcement groups for not paying, or demand taxes to be paid without giving the opportunity to question or appeal the amount owed.

If you believe you are the victim of a scam, please contact us or report the call to the Treasury Inspector General for Tax Administration.

Should you have any questions or wish to speak to a team member, please don’t hesitate to call us at 201-599-0008.

Meet Our Team

Francis E. Shovlin, CPA is a Managing Director at Gramkow Carnevale Seifert & Co., LLC and specializes in providing accounting, tax and management advisory services to healthcare related businesses.  Through his extensive experience assisting medical practices, hospitals and other healthcare organizations with mergers, acquisitions, and joint ventures, Fran has developed a unique skill set that allows him to act efficiently and effectively as a facilitator.

Fran has a depth of experience in the business of healthcare and has assisted clients in areas such as physician-hospital joint venture evaluation and development, medical practice valuation, fair value opinions, shareholder dispute resolution, compensation modeling, and strategic plan development.

Fran graduated from Muhlenberg College with a Bachelor of Arts degree in accounting and business administration in 1984.  He is licensed as a certified public accountant in the State of New Jersey, is a member of the American Institute of Certified Public Accountants and a Fellow in the New Jersey Society of Certified Public Accountants.  Fran is a past-Chairman of CPA Associates International’s Healthcare Professionals Committee.

Fran also has experience providing accounting, tax and advisory services to businesses in other industries, such as manufacturing, retail sales, construction, and distribution.

Did You Know?

We provide a 2019-2020 Tax Planning Guide on our website for your convenience and tax planning purposes. Please visit the following link to access the guide: http://www.taxguideonline.com/gcs-cpa/

Tax Planning – Checking Your Paycheck

Tax planning has turned into a year round process, as events impacting personal and financial changes can affect our income tax liability. Although the “final” tax payments are not due until April 15th of the following year, our current year tax must generally be paid in on an ongoing basis. We must determine and balance the correct amount to pay in at the proper times during the tax year while maximizing our take home pay to cover our living expenses.

The IRS imposes a penalty for failure to pay the proper current year estimated tax. Taxpayers that are employees must generally pay at least 90 percent of their taxes equally throughout the year through withholding (or a percentage of their prior year taxes). If you do not meet this requirement, you may owe penalties and interest when you file your returns.

Changes in your life can have an effect on your required estimated withholding taxes for the current year and desired take home pay. Increases in income as a result of receiving a raise or increases in living expenses (as a result of having a baby or additional dependent responsibilities) can have a direct impact on your desired take home pay. Your take home pay can be adjusted by updating the Form W-4 with your employer.

The key is to balance the maximum take home pay to cover family living expenses with the correct withholding taxes to meet the annual tax requirements. This can be accomplished by performing a paycheck checkup periodically, or when a major life event occurs. An updated, proper, and desired income tax withholding can be computed based on your most recent pay check in conjunction with other changes in your anticipated income and expenses. Sometimes multiple paycheck checkups are required in the tax year. The frequency of checkups depends on how many events occur during the tax year that affect your income tax liability.

The comfort of knowing you have the correct amount of take home pay and withholding taxes paid in for the year helps you achieve your overall financial goals. Our team of experienced professionals and advisors at Gramkow Carnevale Seifert & Co.,LLC can be a valuable asset to help you determine your proper income tax withholdings and corresponding desired take home pay.

Meet Our Team

Patrick O’Reilly (Pat) is a Director at Gramkow, Carnevale, Seifert, & Co., LLC (GCS). He joined the GCS team in 2018 and has about 12 years of previous experience in private accounting, specifically in various management positions in financial accounting and reporting, and about 13 years of experience in public accounting. Pat specializes in taxation with various different practice areas such as estates and trusts, gift tax, business entities, etc.

Pat graduated from Seton Hall University with a Bachelors Degree in Accounting and a Masters degree in Taxation. He is s Certified Public Accountant in the state of New Jersey. Pat is a member of AICPA, NJ Society of CPAs, and NJFPA. He enjoys traveling, sports, and reading in his free time.