Jan 1st, 2021
Dear Client, first of all HAPPY NEW YEAR from your Tax Accountant!
This is going to be a long email, so make sure to make some time to sit down to read the entire thing when you have time, there is a LOT to process here regarding what you need to know for this upcoming tax season and what to expect from us. The email will be broken into 3 sections:
- Changes we are undergoing inside our company Quick Bookkeeping, AKA “QBKAccounting” – and changes to the how we will be working this year
- Updates to tax laws and tax credits related to the Stimulus Bill passed by the US Government during 2020 for Coronavirus Relief
- All the deadlines you need to know for this year
1 – Our company: Quick Bookkeeping, AKA “QBKaccounting”
We are fortunate to have our team intact from last year, all the team members continue to be working for us, are healthy, and working from home. Our principal office is located in 7791 NW 46th Street #109, Doral, FL 33166 and it has been empty since 3/14 due to the Coronavirus. Once all the team members are vaccinated, we will resume operations from our office; for now we will all continue to work from home and communicate via email or phone number.
This is our current team and their roles:
- Hector Garcia (Firm Partner, CPA and Tax Preparer) email@example.com
- Andrea Rodriguez (Tax preparation assistant & billings manager) firstname.lastname@example.org
- Alejandro Diaz (Firm Partner, Accountant & QuickBooks Consultant) email@example.com
- Diana Lomer (Senior Bookkeeper) firstname.lastname@example.org
- Alexander Hiller (Firm Partner, Accountant & QuickBooks Consultant) email@example.com
- Sadel Sanchez (Senior Bookkeeper) firstname.lastname@example.org
- Yessika Moya (Office Manager) email@example.com
- Maria Vallenilla (Customer Service Rep & Junior Bookkeeper) firstname.lastname@example.org
In addition, we are actively looking to hire a new Bookkeeper and a Tax Manager, so you might see a new person or two in the roster soon.
Moving forward you might have one new point of contact. Which means, I will no longer be doing any direct work with you (other than preparing your tax return and discussing specific issues with it). You will get a very specific email with instructions on what that transition will look like. The idea is that I can focus on the tax work and tax planning advice, and my team focuses on the QuickBooks-related bookkeeping support, payroll, sales tax, and the more day-to-day requests you might have.
We also have reduced our client portfolio by 30% to be able to dedicate more time and energy to your business. We are upgrading our tax software to provide more insights about potential tax planning opportunities, and also upgrading our electronic document delivery/archive/signature process to make the workflow even better for all of us. That being said, ALL of our clients will be getting a price increase in your services, we will give you a price UPFRONT before starting the work so we promise you NO SURPRISES.
2- GOVERNMENT AID & TAX UPDATES TO 2020 Tax Year
- For individuals, there was a $1,200 stimulus check per adult + $500 per child back in the spring from the CARES ACT for people making $75k ($150k married) or less. We will be asking you if you received that or not, because it will be reconciled with the 2020 tax return to make sure that all that qualified but did not get the money, can get it with the return
- For individuals, there is a $600 per person stimulus check that should kick in January 2021 for people making $75k ($150k married) or less. We will be asking you if you received that or not, because there might be a possibility that it will be reconciled with the 2020 tax return; BUT the IRS might say otherwise and push it to 2021 reconciliation, this we do not know yet… but for sure will before we file your individual return
- For individuals that received Unemployment benefits, THIS IS TAXABLE INCOME! and it must be included in the tax return… it’s your responsibility to provide this info.
- Business Loses during 2019 or 2020 can now be carried back for 5 years and request a refund/credit for taxes paid back then. This is a long and tedious process that requires amending returns, but for some taxpayers it will be worth their while if the potential refund is $10k or above.
- For businesses with Independent contractors, there is a new form: 1099-NEC that replaces the 1099-MISC for your subcontractors, you are still obligated to file a 1099-NEC for all contractors that you paid $600 or more during 2020. If you have not collected their info with a form W-9, please start doing that ASAP (see deadlines bellow)
- For Businesses with W-2 employees, there are several special tax credits you need know about:
1) EMPLOYEE RETENTION CREDIT: If you have a reduction of revenue in Q2, Q3, or Q4 of 2020 of 50% or more, you might be eligible for up to $5,000 in Payroll Tax Credits PER employee you paid
For 2021, there are new and different rules in place for ERC, and we will deal with this in April if we are actively managing your payroll.
2) FFCRA: if you had any employees that were on sick leave or family leave due to being diagnosed with COVID, you might be eligible for up to $511 per day per employee for up to 2 weeks that you PAID them while they were on leave. Note: there is a special exception for Self-Employed individuals that got sick and could not work; they can get the credit as well.
3) PPP Loan: while this is not a tax credit, it is important to make sure that the PPP Loan and/or forgiveness is NOT booked as taxable income! Most businesses have not applied for forgiveness yet, because the rules have changed again on December 27th, 2020 so make sure all the new rules are being applied because of the process for loans under $150k. There is a second round of PPP funds for companies that can prove a 25% reduction of revenue in any Quarter of 2020; banks will open this application process around January 15th (check with your current bank if you already got a round 1 funding during 2020)
4) STUDENT LOANS: If an employer paid a student loan or paid for tuition on behalf of their employee, the business can take the deduction for up to $5,250 and not result as taxable income for the employee.
There are more changes to the tax law, but these are the most commonly that get asked. It will be OUR responsibility as tax preparers to look at all these things and help you maximize your benefits, so it’s ok for you to ask about any of these when we prepare the final return, in case it’s overlooked.
3- Tax Related Deadlines
- Jan 15th, 2021: Last day to pay your 2020 Q4 estimated taxes.
- Feb 1st, 2021: W-2’s for employees and 1099-NEC for independent contractors are due (NO EXTENSIONS)
- Feb 1st, 2021: All other 2020 Q4 payroll tax forms due: 941, RT-6, and year-end 940 (and possibly balance payments) – If you are paying us to manage your payroll, then you do not need to worry about this. But if you are managing payroll on your own or through QuickBooks, you need to make sure this gets done!
- March 15th, 2021: S-Corporations (1120s), Partnerships (1065), and some LLC’s (filing as Partnership with form 1065 or S-Corp 1120s) are due (NOTE: late filing of form 1065 or 1120S have a hefty fine of $200 per owner per month!)
- March 15th, 2021: Deadline to make S-Corp Elections for year 2020 (for converting current LLCs or C-Corporations into S-Corps)
- April 15th, 2021: Individual Returns (1040) and Single-Member LLCs filing inside personal returns are due with FULL Payment (or penalty will be at least .5% of payment due per month – this can amount to as much as 25% of the due amount!)
- April 15th, 2021: C-Corporations (1120), and LLC filing as Corporations with form 1120 returns are due with FULL Payment (or penalty will be is at least .5% of payment due per month – this can amount to as much as 25% of the due amount!)
- April 15th, 2021: Deadline to report your Foreign Bank and Financial Accounts: https://www.fincen.gov/report-foreign-bank-and-financial-accounts – Note: we do not file this form, this is YOUR responsibility to inform the treasury if you ever had $10,000 or more in any foreign account under your name, your business, or any affiliated entity .
If an extension is filed (you MUST request extensions in writing please):
- September 15th, 2021: S-Corporations (1120s), Partnerships (1065), and some LLC’s (filing as Partnership with form 1065 or S-Corp 1120s) are due.
- October 15th, 2021: C-Corporations (1120), some LLC’s (filing as Corporations with form 1120 or single member LLC’s filing in personal return), and Individual Returns are due.
- NOTE: EVEN IF FILING EXTENSION, ENTIRE TAX LIABILITY IS DUE 4/15/20; penalties for underestimating taxes and tax payment deadlines can be found in this video
State and Local Taxes
- January 1st, 2021: Florida Eqmployers need to update their Unemployment Tax rate for payroll, starting 2021 the min. rate went up to 2.9%, so if you paid less than that in 2020, expect an increase there.
- April 1st, 2021: Most county’s Tangible Property Tax forms are due (Miami-Dade and Broward are due on April 1st, but check with your local county) – NOTE: we do not proactively file this “tax”, you must engage us separately to do this for you.
- April 30th, 2021: Renew your Florida-based corporations and LLCs via Sunbiz.org AKA: “Annual Report” (IF your company is not Florida based, refer to the state of incorporation for renewal deadlines, if required) – video explainer: https://www.youtube.com/watch?v=ekjvsd00P8I
- April 30th, 2021: Florida Corporations (1120F), and LLC filing as Corporations with form 1120 returns are due to file with payment in FULL (or penalty can be up to 50% of late payment)
- NOTE: EVEN IF FILING EXTENSION, ENTIRE TAX LIABILITY IS DUE THIS DAY; penalties for underestimating taxes and tax payment deadlines can be found in this video
March 11, 2021 UPDATE