Dogra CPA LLC

12/24/2024

Tax Alert: Fifth Circuit Appeals Court Reinstates BOI Reporting Requirement for Small Businesses

December 23, 2024 — In a landmark ruling, the Fifth Circuit Court of Appeals has reinstated the Beneficial Ownership Information (BOI) reporting requirement for small businesses, reversing a previous decision that had suspended the rule.

The BOI reporting requirement, part of the Corporate Transparency Act (CTA), mandates that small businesses disclose the identities of their beneficial owners—the individuals who ultimately control or benefit from a company.

What the Ruling Means for Small Businesses?

The decision impacts a wide range of small businesses across the country, particularly those with fewer than 20 employees or less than $5 million in gross receipts. These entities will now be required to disclose their beneficial owners to FinCEN by January 13, 2025, unless they fall under an exemption.

Companies that fail to comply with the BOI reporting requirement may face penalties, including substantial fines.

Key Takeaways:
• The Fifth Circuit reinstated the BOI reporting requirement for small businesses under the Corporate Transparency Act.
• Small businesses must disclose their beneficial owners to FinCEN by January 13, 2025.
• Non-compliance could lead to significant penalties.
• Supporters of the rule argue it will improve transparency and reduce financial crimes

06/14/2024

Tax Alert: Seize The Moment: Should The Wealthy Act Now On The $13.61 Million Tax Break Before It Expires In 2025?

The $13.61 million estate and gift tax exemption is set to expire at the end of 2025, but a lot of wealthy people aren't sure if they should take advantage of this significant tax cut now or wait until then.

The amount an individual can pass to beneficiaries free of gift and estate taxes is known as the exemption, and it will be about halved to about $7 million at the end of the next year under present regulations.

A Spousal Lifetime Access Trust (SLAT) is a powerful estate planning tool that can help married couples maximize the use of their estate tax exemptions. Here’s how you can use a SLAT to address the estate tax exemption expiration effectively:

See more…. https://bit.ly/3VnL5RW

06/02/2024

Tax Alert: Consider a Roth 401(k): Your money can now grow tax-free for longer.

1st Advantage: It's now easier to avoid required minimum distributions (RMDs) and maintain your Roth 401(k) balance throughout retirement thanks to a change in tax legislation. RMDs from Roth 401(k)s were required to be taken by retirees beginning in their early 70s until this year. With effect from 2024, the Secure 2.0 law of 2022 did away with that necessity.

2nd Advantage: Roth 401(k)s also have no income restrictions for contributions. That could make them appealing for high-income earners.

3rd Advantage: Most non-spouse heirs won’t have to withdraw the full balance until the end of the tenth year after the original owner’s death; spouses get a longer timetable.

In summary, a Roth 401(k) can accumulate more wealth without incurring taxes, which is advantageous to you and your heirs.

11/20/2021

Tax Alert: 2021 YEAR-END TAX PLANNING FOR BUSINESSES

As we start to wrap up 2021, now is the time to take a closer look at your current tax strategies to make sure they are still meeting your business needs and take any last-minute steps that could save you money.

Here’s a look at some issues to consider as we approach year-end:

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Now is the time to take a closer look at your current tax strategies to make sure they are still meeting your needs and take any last-minute steps that could save you money.

11/18/2021

Tax Alert: 2021 YEAR-END TAX PLANNING FOR INDIVIDUALS

As we wrap up 2021, it’s important to take a closer look at your tax and financial plans. This year likely brought challenges and disruptions that significantly impacted your personal and financial situation.

Here’s a look at some issues to consider as we approach year-end:
See More: https://bit.ly/3wVGfi8

01/11/2021

Small Business Relief Alert: Forgivable PPP Loan Reopens Today

The SBA is reopening today its forgivable PPP loan program for new borrowers and second round for certain existing borrowers.

Initially, only community financial institutions will make First Draw of PPP Loans today, January 11, and Second Draw of PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter.

Eligibility criteria for borrower:

The borrower has no more than 300 employees and experiencing at least a 25% reduction in gross receipts in a quarter between 2019 and 2020.

Also, the borrower, who previously received a First Draw of PPP Loan, will or has used the full amount only for authorized uses.

The maximum amount that can be borrowed this time will be $2 million. The deadline to apply is March 31.

The SBA will forgive the loan if all employee retention criteria are met, and the funds are used for eligible expenses.

01/04/2021

Tax Alert: Changes to the Employee Retention Credit (ERC)– PPP Loan Recipients Now Eligible for the Credit

The (COVID-19) stimulus package signed into law by President Trump on Dec. 27 contains significant enhancements to the employee retention tax credit enacted under the CARES Act. The stimulus package clarifies that wages paid with PPP loans that are not forgiven may be qualified wages for ERC purposes retroactively. Previously, PPP loan recipients were not eligible for the employee retention credit (ERC).

READ MORE:

Tax Alert: Changes to the Employee Retention Credit – PPP Loan Recipients Now Eligible The (COVID-19) stimulus package signed into law by President Trump on Dec. 27 contains significant enhancements to the employee retention tax credit enacted under the CARES Act. The stimulus package clarifies th...

12/04/2020

Federal Stimulus Alert: New PPP Loan Package Is Highly Expected Next Week

The congress is considering passing a new stimulus bill QUICK.

Timing: It will not be happening any earlier than Dec 9-11th. There is a potential to slip to Dec 18th. Things can always change!

Once the bill passes, Treasury & SBA will move very quickly to implement it.

It’s expected to have the same framework to calculate the loan qualification amount as previously used in PPP Round One. There may be an additional criteria: Small businesses with 25%-35% decline in revenue in 2020 with less than 300 employees.

The intent is survivability of small businesses. More details to follow soon!

11/28/2020

Tax Alert: 2020 Year-End Tax Planning for Businesses

We can all agree that 2020 is unlike any other year. As we consider tax-planning strategies for the year end, major uncertainty continues concerning the severity of the pandemic and length of the economic recovery. Although Congress passed two major pieces of legislation in response to the health and economic impact of the coronavirus pandemic, it remains unclear if additional relief is forthcoming.

As such, each business should consider the unique challenges and possible opportunities that this year presents. Let’s find out what they are.

See More: https://bit.ly/3fM8xmK

11/20/2020

𝐈𝐑𝐒 𝐂𝐨𝐧𝐟𝐢𝐫𝐦𝐬 𝐏𝐏𝐏 𝐋𝐨𝐚𝐧 𝐅𝐨𝐫𝐠𝐢𝐯𝐞𝐧𝐞𝐬𝐬 𝐢𝐬 𝐓𝐚𝐱𝐚𝐛𝐥𝐞 𝐢𝐧 𝟐𝟎𝟐𝟎

Earlier this year, the IRS issued Notice 2020-32 which stated that expenses funded with a Paycheck Protection Program (PPP) loan that is forgiven are not deductible for tax purposes under rules designed to prevent a double tax benefit. A much-debated question since the issuance of that notice is whether a taxpayer that received a PPP loan and paid otherwise deductible expenses can deduct those expenses in the tax year in which the expenses were paid or incurred if, at the end of that tax year, the taxpayer has not received a determination of forgiveness of the loan or not yet applied for forgiveness.

On November 18, the IRS issued Rev. Rul. 2020-27 answering that question: A taxpayer that receives a PPP loan and paid or incurred otherwise deductible expenses related to that loan may not deduct those expenses in the tax year those expenses were paid or incurred if, at the end of that tax year, the taxpayer reasonably expects to receive forgiveness of the PPP loan, even if the taxpayer has not submitted an application for forgiveness of the loan by the end of such tax year.

The IRS presented two scenarios in the revenue ruling as examples. In both scenarios, the borrower pays expenses such as payroll and mortgage interest that would qualify under the CARES Act as eligible PPP expenditures and the borrower satisfies all of the requirements for the loan to be forgiven. In the first scenario, the borrower applies for forgiveness in November 2020 but has not received notice of forgiveness by year-end. In the second scenario, the borrower does not plan to apply for forgiveness until 2021. In both cases, the IRS explained that the taxpayers could not deduct expenses funded with the PPP loans because there was a reasonable expectation of forgiveness.

The IRS also released Rev. Proc. 2020-51 to provide a safe harbor rule for PPP loan borrowers where the forgiveness has been denied in full or in part. In such case, the taxpayer would be permitted (pursuant to the provisions in the Rev. Proc.) to take a tax deduction for those otherwise eligible expenses on an original return, an amended return, or an administrative adjustment request.

Rev. Rul. 2020-27 provides much-needed guidance to taxpayers that were considering delaying the filing of forgiveness applications in order to secure deductions in a current-year tax return or taxpayers that had filed a forgiveness application but were uncertain about how to file their tax returns.

Note: The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.

06/19/2020

COVID-19 Alert: Federal Reserve Begins Main Street Lending Program

The long-awaited Main Street Lending Program (MSLP) is now underway. The Federal Reserve opened lender registration on June 15 and encouraged lenders to begin making Main Street program loans as soon as possible upon registration. Businesses may receive a MSLP loan in addition to their PPP loan. However, unlike PPP loans, MSLP loans are full-recourse loans, and no amount of the loans are forgivable.

The MSLP is generally comprised of three types of loans:

1. Main Street New Loan Facility (MSNLF) Min: $250,000, Max: Lesser of 4 times EBITA of 2019 or $35 million

2. Main Street Priority Loan Facility (MSPLF) Min: $250.000, Max: Lesser of 6 times EBITA of 2019 or $50 million

3. Main Street Expanded Loan Facility (MSELF) Min: $10 million, Max: Lesser of 6 times EBITA of 2019 or $300 million

Terms:
• Five-year maturity
• Principal payments deferred for two years and interest payments deferred for one year
• Adjustable rate of LIBOR (one- or three-month) plus 300 basis points)

Disclaimer: This post contains no tax, legal, or financial advice.

06/19/2020

COVID 19 Update: This new bill would allow small businesses to get second PPP loan

Certain small-business owners may be able to apply for a second Paycheck Protection Program loan if a new bill introduced on June 18 becomes law.

The legislation, called the Prioritized Paycheck Protection Program (P4) Act, would allow businesses with fewer than 100 employees to apply for a second loan if they have used up (or are on way to exhaust) their first PPP loan and can show a 50% loss in revenue due to the COVID-19 pandemic. Business owners also must show they need the money for payroll and eligible non-payroll costs.

The bill would also extend the application deadline for PPP loans from June 30 to Dec. 30. And the deadline for a second loan would be Oct. 1. The SBA Administrator would have the discretion to extend the deadline if needed.

Disclaimer: This post contains no tax, legal, or financial advice.