Business Newsletters
2020 Q4 tax calendar: Key deadlines for businesses and other employers
Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2020. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. Thursday, October 15 If a calendar-year C corporation that filed an automatic six-month extension: File a 2019 income tax return (Form 1120) and pay any tax, interest and penalties due. Make contributions for 2019 to certain employer-sponsored retirement plans. Monday, November 2 Report income tax withholding and FICA
Levels of assurance: Choosing the right option for your business today
The COVID-19 crisis is causing private companies to re-evaluate the type of financial statements they should generate for 2020. Some are considering downgrading to a lower level of assurance to reduce financial reporting costs — but a downgrade may compromise financial reporting quality and reliability. Others recognize the additional risks that work-from-home and COVID-19-related financial distress are causing, leading them to upgrade their assurance level to help prevent and detect potential fraud and financial misstatement schemes. When deciding what’s appropriate for your company, it’s important to factor in the needs of creditors or investors, as well as the size, complexity
External audits offer many benefits to nonprofits
Your nonprofit organization may be required to hire an independent outside CPA to audit its books, depending on its annual gross receipts and other factors. Even when external audits aren’t mandated, however, they’re often recommended. These audits can provide assurance to donors and other stakeholders that your organization is operating with integrity and within acceptable accounting guidelines. Internal audits Most nonprofits conduct internal audits on a regular basis, perhaps quarterly or annually. These audits are typically performed by a board member or a member of the organization’s staff. The objective is to review the organization’s financial statements, accounting policies and
Is it time to outsource finance and accounting?
Outsourcing may appeal to organizations that are currently struggling with mounting overhead costs during the COVID-19 crisis. By outsourcing, you convert certain fixed overhead costs associated with compensating and supporting employees into variable costs that can be scaled back in an economic downturn — or dialed up in times of growth and transition. One department that’s ripe with outsourcing opportunities is finance and accounting. There are many external providers of such specialized, time-consuming services as payroll processing, tax preparation and bookkeeping. You can even outsource your controller or CFO function. But do the benefits of outsourcing these tasks outweigh the
IRS addresses CARES Act relief for retirement plan distributions and loans
The IRS recently issued frequently asked questions (FAQs) regarding retirement plan distribution and loan relief under the Coronavirus Aid, Relief and Economic Security (CARES) Act. This relief applies to qualified individuals affected by the novel coronavirus (COVID-19) pandemic. It expanded distribution options and favorable tax treatment, increased plan loan limits and delayed repayment of outstanding plan loans. The FAQs explain that the IRS plans to release further guidance under Internal Revenue Code Section 2202 “in the near future.” It will apply principles originally articulated in Notice 2005-92, which interpreted distribution and loan relief enacted in response to Hurricane Katrina. Meanwhile,
Adjusting your financial statements for COVID-19 tax relief measures
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, contains several tax-related provisions for businesses hit by the novel coronavirus (COVID-19) crisis. Those provisions will also have an impact on financial reporting. Companies that issue financial statements under U.S. Generally Accepted Accounting Principles (GAAP) are required to follow Accounting Standards Codification (ASC) Topic 740, Income Taxes. This complicated guidance requires companies to report the effects of new tax laws in the period they’re enacted. As a result, companies — especially those that issue quarterly financial statements or that have fiscal year ends in the coming
Relief from not making employment tax deposits due to COVID-19 tax credits
The IRS has issued guidance providing relief from failure to make employment tax deposits for employers that are entitled to the refundable tax credits provided under two laws passed in response to the coronavirus (COVID-19) pandemic. The two laws are the Families First Coronavirus Response Act, which was signed on March 18, 2020, and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, which was signed on March 27, 2020. Employment tax penalty basics The tax code imposes a penalty for any failure to deposit amounts as required on the date prescribed, unless such failure is due to reasonable
CARES ACT changes retirement plan and charitable contribution rules
As we all try to keep ourselves, our loved ones, and our communities safe from the coronavirus (COVID-19) pandemic, you may be wondering about some of the recent tax changes that were part of a tax law passed on March 27. The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains a variety of relief, notably the “economic impact payments” that will be made to people under a certain income threshold. But the law also makes some changes to retirement plan rules and provides a new tax break for some people who contribute to charity. Waiver of 10% early
Numerous tax limits affecting businesses have increased for 2020
An array of tax-related limits that affect businesses are annually indexed for inflation, and many have increased for 2020. Here are some that may be important to you and your business. Social Security tax The amount of employees’ earnings that are subject to Social Security tax is capped for 2020 at $137,700 (up from $132,900 for 2019). Deductions Section 179 expensing: Limit: $1.04 million (up from $1.02 million for 2019) Phaseout: $2.59 million (up from $2.55 million Income-based phase-out for certain limits on the Sec. 199A qualified business income deduction begins at: Married filing jointly: $326,600 (up from $321,400) Married
Employee benefit plans: Do you need a Form 5500 audit?
Some benefit plans are required to include an opinion from an independent qualified public accountant (IQPA) when filing Form 5500 each year. The IQPA examines the plan’s financial statements and schedules to ensure they’re presented fairly and in conformity with Generally Accepted Accounting Principles (GAAP). The financial statements and IQPA opinion are often referred to collectively as the “audit report.” 100 participant rule Generally, employee benefit plans with 100 or more participants — including eligible, but not participating, as well as separated employees with account balances — must include an audit report with Form 5500, “Annual Return/Report of Employee Benefit
