INDIVIDUALS - Retirement Plan Changes in the New "CARES ACT"
April 9, 2020
The Coronavirus Aid, Relief, and Economic Security Act, "CARES Act", also included various changes and relief provisions that you should consider implementing immediately.
A few of these provisions are outlined below.
Extended deadline for 2019 IRA Contribution
Required Minimum Distributions (RMDs) Waived for 2020
10% Early Distribution Penalty Waiver for "COVID-19 Related Distributions"
Plan Loan Relief
ILLINOIS 2020 YEAR ESTIMATED TAX PAYMENTS April 5, 2020
April 5, 2020
The Illinois Department of Revenue has finally released their guidance on the payment of 2020 year estimated tax payments for individuals and corporate business.
See the attached Illinois Information Bulletin which outlines the calculation options to avoid any tax underpayment penalties for 2020 year taxes due. Note that this bulletin was just made available at the end of this week.
For our California and New York clients, the 2020 estimated tax provisions have been changed as follows-
CALIFORNIA - both the 1st and 2nd estimated tax payments are now due July 15, 2020.
NEW YORK - the 1st estimated tax payment is now due July 15, 2020.
Partnerships and LLC's - 2019 Year Returns
The Illinois Department of Revenue has also determined that the deadline for all 2019 year Partnership and LLC tax returns (IL-1065 Forms) will remain April 15, 2020.
Extensions may be filed which allow these returns to be filed on or before September 15, 2020, BUT the extension request should be accompanied by a payment of tax to avoid any assessment of late payment penalties and interest.
Paycheck Protection Program (PPP) April 2, 2020
(SBA loan that helps businesses keep their workforce employed during crisis)
Submission of PPP loans applications for most businesses and nonprofit organizations are expected to start on April 3.
If you receive a loan under the Paycheck Protection Program, you will be precluded from also claiming an Employee Retention Credit under the CARES Act.
The Employee Retention Credit gives eligible employers whose business operations are fully or partially suspended due to the COVID-19 pandemic a credit against employment taxes equal to 50% of qualified wages (up to $10,000 in wages) for each employee.
Funding is limited, timing is everything! Link to Application
INDIVIDUALS - Your Personal Stimulus Rebates March 31, 2020
The Coronavirus has infected our life in many ways. Family and friends are sick, quarantined or under a stay-in-place order. The stock market has crashed. The kids are out of school. Restaurants and shopping malls are closed. More than three million unemployment claims were filed in one week. Enough of the cable news . . . If you are laid off or you have closed your business, you know the details.
After a lot of talk, Congress did something. The Coronavirus Aid, Relief, and Economic Security Act, (CARES Act), a $2.2 trillion stimulus package to mitigate the impact of the Coronavirus pandemic was enacted.
The CARES Act includes stimulus payments of $1,200 for each individual and $500 for each dependent child, defined by the child tax credit rules as under age 17.
Who and How Much?
CARES ACT - Loans for Your Business March 29, 2020
Businesses with less than 500 employees are now eligible to apply to their bank, or any SBA approved bank, for a Federally insured, non-recourse, loan. The loan is based on covering your short term operating expenses, primarily payroll and rent.
The CARES Act provides relief to small businesses, including $349 billion for Small Business Administration (SBA) loan guarantees and subsidies. These loans are intended to cover the cost of payroll-related and other expenses arising from maintaining pre-COVID-19 employees and compensation levels for the eight-week period after the funding of each loan. This SBA loan program is in addition to the recently enacted SBA economic injury disaster loan (EIDL) program to provide disaster loan assistance to small businesses.
2019 Year Illinois State Income Tax Filings & Payments
Governor JB Pritzker announced that the Illinois Department of Revenue would follow the Internal Revenue Service in extending state tax return filings and payments until July 15th.
This does NOT impact the first and second installments of estimated payments for 2020 taxes that are due April 15 and June 15. Taxpayers are required to estimate their tax liability for the year and make four equal installments. Taxpayers will not be assessed a late estimated payment penalty if the amount of the installments equals 90% or more of the current year's liability or 100% of the previous year's liability, paid ratably, per quarter.
If you have not filed your 2019 year Illinois tax return prior to April 15, 2020, your 1st Quarter Illinois Estimate Payment should be 25% of your 2018 tax liability.
2019 Year Illinois Tax Return Filing & Tax Payments - Due July 15, 2020
2020 Year Illinois Estimated Tax Payments
2020 1st Quarter ILLINOIS ESTIMATE VOUCHER - (Pay by April 15, 2020) (see above)
2020 2nd Quarter ILLINOIS ESTIMATE VOUCHER - (Pay by June 15, 2020)
2020 3rd Quarter ILLINOIS ESTIMATE VOUCHER - (Pay by September 15, 2020)
2020 4th Quarter ILLINOIS ESTIMATE VOUCHER - (Pay by January 15, 2021)
Illinois Online Payment Option Available at https://mytax.illinois.gov/
SSG Protocol Concerning COVID-19 March 29, 2020
Our number one priority is the health of our team, our clients, and our community. Out of an abundance of caution, we are limiting face-to-face contact starting immediately and for the balance of the month of March.
To help prevent the spread of the virus, we are now cancelling any in person meetings both at our offices and off site. We are instead requesting to host those meetings via phone, email, or video conferencing. If you have drop-offs or pick-ups, please contact our team for arrangements.
Our offices will be temporary closed to visitors. If you have drop-offs or pick-ups, please contact our team for arrangements.
Thank you for your assistance in keeping our community safe. Please be assured that we will be monitoring this situation very closely. As always, please contact us if we can help in any way, or if you have questions.
Dropbox - Electronic File Transfers
You are able to social distance yourself while sending us your tax documents via Dropbox for secure/encrypted file transfers. SS+G previously introduced Dropbox, a client portal, where files (PDF, Images, Word, Excel, etc) such as tax information & returns can transferred and saved for permanent seam-less delivery. Over 500 million people around the world rely on Dropbox for encrypted secure file storage.
Dropbox Account Required Option - Permanent Future Access
We can invite you to your individual Dropbox if you want permanent future access to your files.
In addition to all your prior and current documents, you will automatically receive all your future files in this Dropbox.
You are also able to add (upload) any files to this box and we will receive them on our end securely encrypted.
NO Dropbox Account Required Option - Temporary Access via Expiring Link
You DO NOT need a Dropbox account to access your Dropbox via links and download or upload your files!
The link will be password protected
Easy Uploading - Email email@example.com to create an upload request. Once created, you will receive an email from Dropbox with the link.
To upload, click on link then drag your files onto the webpage screen or select specific files from your computer. We will receive the files on our end securely encrypted!
Estate Planning Issues
This outline provides some estate planning advice for all clients, regardless of whether they are "rich" enough to be worried about the federal estate tax. Year-end is a good time to conduct estate planning checkups.
The unified federal estate and gift tax exemption for 2019 is a historically huge $11.4 million, or effectively $22.8 million for married couples. For 2020, the exemption amount jumps to $11.58 million ($23.16 million for married couples). Even though fewer clients are exposed to the federal estate tax due to these exemptions, their estate plans may still need updating to reflect current tax rules and other changing realities.
Clients also should consider the distinct possibility that today's generous exemption may be on life support along with the relatively reasonable (by historical standards) 40% federal estate and gift tax rate, depending on how the 2020 election turns out. Some clients who are fully sheltered right now might find themselves exposed to the federal estate tax in the near future. Finally, clients may need to make estate planning changes for reasons that have nothing to do with taxes.
This letter covers some important age-related tax and financial planning milestones that you should keep in mind for yourself and loved ones.