Let’s face it—tax filings have been grueling the past several years. In the 2019 tax season, extensive and swift changes under the tax reform law known as the Tax Cuts and Jobs Act upended conventional planning and understandings. Then came 2020, when tax filers and preparers had to contend with the COVID-19 disruption, which brought about more tax law changes and threw a wrench into the ability of the IRS to process returns.
Topics: tax, S Corporation, Tax Cuts and Jobs Act, tax legislation, pass-through entities, Cryptocurrency, PPP, Payment Protection Program, ERTC, PTE
The Paycheck Protection Program (PPP) created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and extended by the December 2020 year-end appropriations bill provides a direct incentive for small businesses to keep their workers on payroll. It is backed by the Small Business Administration (SBA) and provides potentially forgivable, low-interest loans for small to medium-sized organizations who can demonstrate expenses were used toward retaining their headcount.
Topics: Independent Contractor, COVID19, Coronavirus, Coronavirus Aid, Relief, and Economic Security Act, PPP Loan, Small Business Administration, PPP Loan Forgiveness, Payment Protection Program
On Nov. 18, 2020, the IRS weighed in on whether expenses used to support Payroll Protection Program (PPP) loan forgiveness are deductible, assuming the forgiveness occurs in the year after the expenses are incurred. In Rev. Rul. 2020-27, the IRS doubled down on its previous position by holding that expenses incurred in the year prior to forgiveness are also nondeductible.
Topics: PPP, PPP Loan Forgiveness, Payment Protection Program
When organizations are financially struggling or affected by external events, several accounting considerations come into play. External events arising from the COVID-19 pandemic and its disruption could intersect with several components of accounting. A brief summary of possible considerations are described below.
Topics: goodwill impairment, going concern, income tax accounting, Revenue recognition, COVID19, Coronavirus, financial statement disclosures, SEC, PPP Loan, Payment Protection Program, credit loss
