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IRS Issues Guidance Addressing President Trump’s Order on Payroll Tax Deferral

By Michael Bodrato Presidential Memorandum On August 8th, President Trump signed a Presidential Memorandum to direct the Treasury Secretary to use his authority to defer the withholding, deposit and payment of certain payroll taxes from employees suffering under the economic hardships brought about by the Coronavirus Pandemic.  The President’s order is made applicable to wages and compensation paid during the period of September 1, 2020, through December 31, 2020, and is subject...

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Get To Know Federal Tax Form 5471, and The Post-2017 Revisions

By Mary Vasilescu The IRS collects information about foreign corporations with substantial United States (U.S.) ownership interests using Federal Tax Form 5471, Information Return for U.S. Persons With Respect to Certain Foreign Corporations. Form 5471 is used by certain U.S. persons who are officers, directors, or shareholders of certain foreign corporations to satisfy the reporting required under the Internal Revenue Code (IRC) and the related Treasury Regulations. Beware Hefty...

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Expenses Relating to PPP Forgiveness are Nondeductible

By Evan Gernant On Thursday, April 30, the IRS issued Notice 2020-32 clarifying that to the extent a Paycheck Protection Program (PPP) loan is forgiven, the associated expenses will be nondeductible for federal tax purposes.  The CARES Act made it clear that any amount of forgiveness of a PPP loan would be non-taxable.  What was not addressed and left for interpretation was whether the associated expenses would be tax-deductible.  Many were hopeful for a better ruling from the IRS...

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Net Operating Losses Under the CARES Act

By Evan Gernant On Thursday, April 9, the IRS issued guidance on the treatment of net operating losses under the provisions of the CARES Act. Revenue Procedure 2020-24 provides procedures to elect to revoke the carryback period for NOLs arising in 2018 and/or 2019  Background:  The Tax Cuts and Jobs Act changed the treatment of NOLs.  It generally provided that NOLs arising in tax years beginning after December 31, 2017 were no longer permitted to be carried back and are deductible...

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Additional Tax Filing Relief from the IRS

By Michael Bodrato The IRS released yesterday additional tax return filing and payment relief in Notice 2020-23, which applies to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020, including individuals, trusts, estates, corporations, and other non-corporate tax filers. In addition, Notice 2020-23 provides that this period of time will be disregarded by the IRS in calculating any interest, penalty, or additions to tax...

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Key Tax Provisions of the $2 Trillion CARES Act

By Mike Bodrato The Senate voted last night, 96-0, to approve the Coronavirus Aid Relief, and Economic Security Act or the CARES Act, which has more than $2 trillion in spending and tax breaks to assist economically and fund a nationwide effort to stop the coronavirus.  At this writing, the CARES Act is still awaiting House approval and the President’s signature, which is not expected until tomorrow. The bipartisan legislation includes about $500 billion that can be used to back...

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IRS Releases Official Guidance After Treasury Secretary’s Announcement

by Evan Gernant Following Secretary Mnuchin’s earlier announcement, the Treasury Department released guidance on Friday, which supersedes and expands upon the guidance issued earlier this week that gave taxpayers extra time to pay their taxes but not to file. The new guidance provides for the following relief: The filing of 2019 federal income tax returns and the payment of 2019 federal income tax (including tax on self-employment income) due on April 15, 2020, is automatically...

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U.S. Treasury Response to the Coronavirus

by Evan Gernant The Coronavirus has intruded into all facets of our lives.  As we all try to grapple with the uncertainty this situation brings we still find ourselves in the midst of tax filing season, an already stressful time for business owners and other taxpayers. The Treasury Department issued guidance yesterday clarifying Secretary Mnuchin’s announcement on Tuesday that taxpayers can delay income tax payments due April 15, 2020.  The guidance provides that for all taxpayers...

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Elective Business Alternative Income Tax for Pass-Through Entities to Address Federal Limitation on State and Local Deduction

On January 13, 2020, Governor Phil Murphy signed into law Senate Bill 3246 establishing the business alternative income tax, an elective New Jersey business tax for pass-through entities. A corresponding refundable state gross income tax credit is allowed for the owners of the pass-through entities to offset personal or corporate income tax liability.  The pass-through entity tax applies to tax years beginning on or after January 1, 2020.  The intent of the new legislation is to...

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Reading Financial Statements 101 – Quick Tips To Identify Potential Errors

The last thing your company or organization wants is unreliable financial statements. Your partners, investors, lenders and especially your company’s bottom line depend on numbers from your accounting department that you can comprehend and trust. To minimize the potential for errors, make sure that the following criteria are met when reporting your numbers:  Balance Sheet Asset accounts should have debit balances and liability accounts should have credit balances. As long as your...

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