Davidson & Company, CPAs

05/13/2025

COMMON QUESTION:
What's the Status of Your Refund?

You can learn the status of your tax refund using an IRS online tool. Go to irs.gov and click on "Get Your Refund Status."

You'll need your Social Security number, filing status and refund amount.

Send a message to learn more

12/01/2022

By now you have heard that there is a new reporting threshold for 3rd party payors and payment cards such as EBay, Facebook Marketplace and cash transfer applications (other than Zelle) of $600. Congress decided that all of these amounts will be reported on the 1099-K. Did you sell $800 worth of old furniture on Ebay-guess what, you get a 1099-K because it is over $600. Did you do cash transfers over the course of the year to one or more friends over $600 through an app? Guess what, you will also get a 1099-K.

The IRS has already stated that the data will be used for new audit and collection approaches and computer matching for unreported income.

Source: TaxSpeaker

08/25/2022

Learn more about the $200 Automatic Taxpayer Refund (Indiana only):

Automatic Taxpayer Refund DOR Individual Income Taxes Current: Automatic Taxpayer Refund Scam WarningThe Auditor of State’s Office and Indiana Department of Revenue remind Hoosiers to be mindful of potential scams regarding Automatic Taxpayer Refunds (ATR). All refunds will be issued by direct dep...

03/11/2021

Pending Legislation

The president is expected to sign a bill this week which will provide relief for the continued impact of COVID-19. The American Rescue Plan Act of 2021 extends unemployment benefits, provides funding for state and local governments, supports vaccine rollouts, expands the child tax credit, makes a portion of unemployment compensation nontaxable for certain filers, and gives many Americans an additional Economic Impact Payment.

There are a couple of items in the bill that will affect 2020 tax returns, including the tax waiver for unemployment compensation up to $10,200 for many taxpayers and elimination of repayment of the Advance Premium Tax Credit.

07/30/2020

IRA withdrawal under COVID

If your cash flow is down during these tight economic times, you may consider tapping your IRA. The CARES Act allows eligible participants to take a distribution of up to $100,000 TAX & PENALTY FREE if repaid within 3 years. Sound great? Well then, let’s talk about the details…

You can, in fact, take $100,000, penalty free, from your traditional IRA this year. To get the tax free treatment, you will then have to:

• pay the tax on $33,333 in 2020, 2021, and 2022
• pay back the $100,000 in 2023
• amend your 2020, 2021, and 2022 income tax returns to reclaim the tax paid on the $100,000 withdrawal from 2020

Yes, this will make you “whole” again - just be aware of the obstacles in getting there. I suspect this will not be a great option for most but a few may benefit including:

• if your 2020 taxable income is low, you may pay very little tax on the distribution this year
• if you own a flow thru business and expect a loss, this might put you in a no tax payment situation this year.
• you don't have to wait until 2023 to pay it back, which allows you to manage the cash flow timing aspect of this alternative
• you are desperate for cash right now

As always there are a multitude of rules with this plan but I am highlighting a few here that are relevant:

• The 10% penalty is waived
• There are no minimum withholding requirements on the distribution
• Employer sponsored plans (401k, 403b, etc) can be a source of withdrawal but you will need to check with your employer to determine if they will allow it since they are not required to
• You must be, in some way, affected by COVID to qualify
• Your withdrawal will not receive a return on investment while it's out of the account

If you are considering this, please tread carefully. If you have any questions please let us know!

06/04/2020

Here is some GREAT NEWS for you PPP loan recipients! Late last night (6/3/20) the Senate approved the House version of the PPP legislation. What does this mean for you?

It TRIPLES the time period for you to spend your PPP funds on qualifying costs from 8 weeks to 24 weeks.

It lowers the payroll cost requirement from 75% to 60%

Note that this new change has a steep requirement – you must now spend at least 60% of your PPP funds on payroll or none of the loan will be forgiven

Borrowers can use this 24 week window to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must now be done by Dec. 31 rather than June 30.

You now have 5 years to repay the unforgiven portion of the loan, rather than 2.

This bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act. (NOTE: I still do not like this option for various reasons previously discussed, but it is there for you if you want to explore.)

The bill now goes to President Trump who is expected to sign it.

Finally, if you have not yet applied for a PPP loan, you have until June 30. There are still funds available.

Happy to share this news! Please let me know if you have any questions.

Have a great day!

05/18/2020

May 18, 2020

Good morning!

On Friday, the SBA and Dept of Treasury released the PPP Loan Forgiveness Application along with detailed instructions. At the end of your 8 week forgiveness period (more on this in a minute), you will have to submit this document to your lender in order to receive loan forgiveness. You can access the 11-page document HERE (https://www.davidsoncocpas.com/~dcocpas/files/SBA%20PPP%20Forgiveness%20Application.pdf). We now have over 60 (!!) changes since this new law was passed, and as is always the case, there are still unanswered questions that the SBA & Treasury promise to answer “soon”.

There are a few important developments that I will highlight below:

• If you are a seasonal business the forgiveness application offers some much needed clarification and relief on terms for qualification, including FTE calculation, etc.

• One certification you made during the application process was the “…current economic uncertainty makes this loan request necessary to support ongoing operations…”. Some small businesses received their PPP funds, then became concerned they may not be able to prove loan necessity. The SBA stated last week that loans under $2 million will not be subject to any reviews - all loans under $2 million will be deemed to have made the required certification concerning good faith.

• A significant problem widely faced is how do small businesses make payroll with PPP funds while employees are prohibited from working due to a statewide lockdown? This solution finally gained traction over the weekend as one Senator spoke out on the issue encouraging swift action. The fix includes an extension of the current 8 week loan forgiveness period so that small businesses in lockdown states have more time to spend funds on payroll. This action has apparent strong bipartisan support and Congress is now expected to extend the forgiveness period.

• On May 1, 2020 the IRS stated that expenses paid with forgiven PPP loan proceeds will not be deductible.

Stay tuned to this constantly changing situation. We are prepared to help you through this application and provide whatever support you require. Have a great day!

04/15/2020

Economic Impact Payments

Use the "Get My Payment" application to:

*Check your payment status
*Confirm your payment type: direct deposit or check
*Enter your bank account information for direct deposit if we don't have your direct deposit information and we haven't sent your payment yet

Here:

We’re committed to helping you get your economic impact, or stimulus, payment as soon as possible. See if you are eligible for an Economic Impact Payment.

04/03/2020

Dear clients:
The SBA changed the PPP loan application overnight! If you're not using the current one, your loan approval could be delayed.

Please check our Downloads page for up to date documents at https://www.DavidsonCoCPAs.com/downloads

Some of the largest banks in the country are stating there is no way this will be live today, although I'm already getting document requests from others. At this point you should follow the advice of your lender.

Stay tuned...

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03/30/2020

BEWARE OF STIMULUS PAYMENT SCAMS! We’re already hearing stories of scammers on the prowl. The IRS, Treasury, Indiana, Kentucky, nor any other government agency will contact you by phone to collect information for stimulus payment processing. Period. As of right now we are only aware of ONE communication a taxpayer will receive from the IRS: no later than 15 days AFTER distributing a stimulus payment, the IRS is required to mail a notice to the taxpayer indicating the payment amount, whether the payment was mailed or deposited, and a phone number to call if the taxpayer did not receive the payment. Victims or targets of stimulus payment scams should report it immediately to the Federal Trade Commission at www.ftc.gov/complaint.

IdentityTheft.gov is the federal government's one-stop resource for identity theft victims. The site provides streamlined checklists and sample letters to guide you through the recovery process. Visit ftc.gov/idtheft for prevention tips and free resources to share in your community.

03/28/2020

Dear Clients,

The CARES Act (Coronavirus Aid Relief and Economic Security) has just passed both the U.S. House of Representatives and the U.S. Senate. President Trump is expected to sign the bill into law shortly. The CARES Act provides significant relief in terms of financial assistance to nonprofits, businesses, and individuals, among others.

Highlights of the $2 trillion package includes:

Individuals
• Direct payments to taxpayers
• Expansion of unemployment benefits
• Waiver of penalties for early distributions from IRAs, 401(k)s and other retirement plans
• Expansion of tax deductions for charitable donations

Businesses
• Retention tax credit for eligible employers that continue to pay employee wages while their operations are fully or partially suspended as a result of certain Coronavirus-related government orders
• Deferral of specific employer payments and payroll taxes
• Modification of net operating loss (NOL) and limitation on losses rule
• Modification of the deduction limitation on business interest
• Expansion of SBA programs and assistance to small businesses

A summary of the bill can be found here (https://www.govtrack.us/congress/bills/116/s3548/summary). We will continue to monitor the impact of this bill and other regulatory changes, and will keep you updated.

This is a fluid situation, and in order to communicate these items in the most efficient manner possible, I ask that you please follow us on facebook at www.facebok.com/DavidsonCoCPAs/ or sign up for our mailing list at www.DavidsonCoCPAs.com.