Update July 16, 2020
What have we learned so far and what is upcoming?
PPP Loans Update
The rules have changed recently which allows a 24- week measurement period for the spending of the PPP loan proceeds. This guarantees the full forgiveness of these loans for 99% of our clients. While the simplified forgiveness applications have been published, the banks are not yet providing guidance on their individual handling of the forgiveness through electronic portals etc., like what happened during the application process. As with the PPP loan applications themselves, we are prepared to assist you achieve forgiveness. There is still controversy whether the forgiven loan amounts will be considered income. Stand by.
EIDL (Economic Injury Disaster Loans)
Many of you have received these loan offers or the actual funding of these loans. This program has changed at least three times since the “pandemic” started in March. Interest accrues from the funding date at 3 ¾% but payments are not required for one year. It is still open for new applications as of this writing. Be careful with the application process since reconsiderations of amounts offered do not seem to be available. You may have received a grant from this program which is forgivable. The loans themselves are not. This is a 30- year amortization period and may require formal reviewed financial statements each year going forward, and /or higher insurance coverages for your business.
These are 100% taxable as income when received, so consider your estimated tax payments, or request voluntary withholdings taxes.
July 15th Tax Deadlines
All returns in 2020 due before July 15th have been automatically extended to July 15th. As a matter of normal procedure, we extend all business and personal tax returns for our clients. These extensions are as normal, Sept 15th for business returns and Oct 15th for personal returns. KEEP IN MIND the payment deadlines only extended to July 15th. All taxes paid after that date are subject to normal interest and penalty rules.
Amended returns and correspondence with IRS
They are MONTHs behind on posting paper filed returns and correspondence so be patient and watch the mail as they will eventually catch up in the next several months, hopefully. Meanwhile at last check the telephone assistance with them is still unavailable.
Installment Agreements with IRS
According to an IRS the moratorium on installment payments ended July 15th. We suggest you continue to make payments online at Directpay.IRS.gov without getting the monthly reminders. The mail out of IRS is months behind.