Robert Dee Jr, CPA

09/24/2024

VERY IMPORTANT READ

NEW for 2024 - Beneficial Owner's Information Report (BOI).

You MUST file the report if you are the "beneficial owner" of a corporation or LLC. Although partnerships and trusts are not specifically enumerated at present, it is most likely that these entities will also become subject to these new reporting requirements. Entities formed prior to 1/1/24 have until 1/1/25 and entities formed after 1/1/24 must file the report within 90 days of formation.

Beneficial owner corresponds to the following

1.) Any individual who owns 25 percent or more of the company

2.) Any individual who directly or indirectly exercises substantial control over the business.

Information required to be reported by beneficial owner.

1.) Name

2.) Date of birth

3.) Address

4.) Id number from one of the following non-expired documents

a.Non expired state driver’s license

b.Us Passport

c.State or local government of Initial Tribe Identification card

d.If the individual doesn’t have any of the above, a passport and an image of one of the documents listed above.

Any updates, after the original BOI report, to the entity or beneficial owner are required within 30 days after the information changes or after errors are discovered.

The penalties are steep for NOT reporting - Willful violations could result in civil penalties and/or criminal penalties. FinCEN published inflation adjustments in January 2024 for civil monetary penalties, increasing the potential fine to $591 per day (effective Jan. 25, 2024) from its original $500. The cap remains at $10,000. Criminal penalties could include imprisonment of up to two years.

The reports will be filed electronically via an online interface on the FinCEN website.

If you want to prepare the report yourself, below is website;

https://boiefiling.fincen.gov/

WARNING – There are already companies “informing” taxpayers of their registration requirements, including providing a web address, a phone number, and a QR Code to help taxpayers properly register. Beware. These companies are not FinCEN. They may be companies that are offering to “help” taxpayers with their responsibilities, or they may be scammers trying to obtain taxpayer information. FinCEN has this alert on its website:

********************************************************************

From a National Speaker, David Mellem - “Alert: FinCEN has learned of fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act.”

So far, we have seen solicitations from:

- United States Business Regulations Department

- United States Department of Records Management

- National Filing Service

These solicitations ask the reader to go to a web site, scan a QR code, or call a phone number. None of these solicitations are truly FinCEN. We recommend you advise your clients to avoid these fake solicitations.

***********************************************************************

If you have any questions do not hesitate to ask, this reporting is mandatory.

07/10/2024

My office is still without power and have no estimate when power will be restored. I will post here when back open.

12/13/2021

Employee Retention Credit (ERC) – Have You Overlooked This?????

The Consolidated Appropriations Act (CAA) changed the rules for the ERC. It expanded the ERC for taxpayers and employers could also receive both the ERC and a PPP loan. The MOST IMPORTANT requirement is you cannot use wages for ERC that were used PPP forgiveness. You have to separate (carve out) wages used for PPP forgiveness and not use the same wages for the ERC. ALSO, Owners and their related parties do NOT qualify for the ERC.

For 2020 the credit is based upon a maximum of $10,000 of Qualified Wages (QW) and the credit/refund is 50% of those QW for a maximum credit/refund up to $5,000 per employee. The QW is a cumulative for the entire year of 2020. For example, if you have FIVE employees who have a maximum QW of $10,000 each, you will have an ERC credit/refund of $5,000 EACH for a total of $25,000 in ERC refunds. YES twenty five thousand.

For 2021 the credit is based upon a maximum of $10,000 of QW and the credit is 70% of QW for a maximum of $7,000 per employee. The QW for 2021 is based upon EACH quarter qualified, not cumulative for the entire year. The credit expired 9/30/21 so it is possible to have a credit up to $ 21,000 for EACH employee, if they had QW of $10,000 for each of the three quarters in 2021.

• Qualified wages include, if during the full or partial suspension of the operations of their trade or business during any calendar quarter because of Governmental orders LIMITING COMMERCE, TRAVEL, or GROUP MEETINGS due to Covid-19.

Examples are:
• Restaurants were limited to 50% capacity up until 3/10/21. It does not matter if they had a banner 2020 year, they were limited and qualify.
• A business with two tables was limited to 50% capacity so they were affected and qualify.
• A business with a showroom was limited to 50% capacity so they were affected and qualify.
• A retail business was limited to 50% capacity so they were affected and qualify.
• Many businesses were limited by Commerce due trucking or getting their product so they were affected and qualify. This list goes on and on.

Most all businesses were limited due to the above as businesses could not operate fully due to Covid-19. On March 10, 2021, the restrictions were taken down and businesses could move forward.

If you have not filed for the ERC, you will not receive this credit/refund. I encourage everyone who qualifies for the credit to take advantage NOW. The credit is computed on an amended Form 941x for each quarter qualified.

08/10/2021

Hurricane Harvey Casualty Loss Safe Harbors – I am bring this back to life one last time. This special provision expires 10/15/21 if you filed for an extension for your 2017 tax return.. If you qualify for this, and the last day to amend and claim a refund is 10/15/21.

DO NOT OVERLOOK THIS. I encourage everyone to share this with anyone who had a casualty loss.

Too many taxpayers affected by this disaster are not utilizing these Safe Harbors identified below. I have more detailed articles, but here is the down and dirty so please share or go to my website and click the “Book Now” button and schedule an appointment. Even if you have filed your tax return already, you can amend and use these Safe Harbors.

******************************************
Safe Harbors for determining casualty losses – the IRS has created “Cost Index Tables” for determining your casualty loss.

Even if you had flood insurance, you still qualify for a casualty loss by using these Safe Harbors.

These Safe Harbors are "per square foot" of damaged property.
The amounts amounts below are if you had over 1 foot of water. Again you qualify even if you had flood insurance. In Texas the amounts per square foot are:

$139 for residence less than 1,500 square feet

$117 for residence between 1,500 & 3,000 square feet

$104 for residence over 3,000 square feet

For example if you have a 2,000 sq ft house which had over 1 foot of water, the Safe Harbor casualty loss is 2,000 times $117 = $234,000. These are real numbers.

Below is a detailed article. This is your last chance to take advantage of this provision if you qualify.......

www.robertdeejrcpa.com/cashualtysafeharbors.php

Again, I encourage everyone to share this or go to my website and click the red "Book Now" button and schedule an appointment.

Robert Dee Jr., CPA. I am a dedicated CPA firmly focused on Tax Preparation and Planning which includes Individuals, Partnerships, Corporations (C and S), LLC's and IRS Tax Controversy and Representation. My philosophy of proactive tax planning rather than reactive has proven successful and given my...

03/04/2021

PPP Loan for self employed. The SBA just released the new guidance for forms for applying fo PPP #1 loan. Previously the calculation was based upon your Net Income of Schedule C or Schedule F. Now the calculation is based upon your "GROSS" income (limited to $100,000) on Schedule C or Schedule F. This results to a maximum forgivable loan of $ 20,833. However, to qualify you must have a 25% decrease in income for any quarter in 2020 compared to same quarter in 2019.

02/24/2021

Farmers & Ranchers (Schedule F) PPP Loan. The Sba has updated their requirements if you file a Schedule F on your 2019 tax return. Before this update the PPP calculation was based upon Line 34 of Schedule F, which is the net farm profit or loss. If you had a loss, you did not qualify.

Now the calculation is based upon the "Gross" income of the Schedule F which opens up all farmers and ranchers which may have had losses.

Keep looking here for more updates.

02/23/2021

The IRS is giving all Texas residents and businesses an additional two months to file their federal income taxes, citing the deadly winter storm that left millions without power and water. Texans will now have until June 15 to file their 2020 returns, instead of the regular deadline of April 15, the tax agency said on Monday.

The extension also includes any taxes that would have been owed by April 15, as well as any business returns that otherwise would have been due on March 15, the IRS said. Texans also will have until June 15 to make 2020 IRA contributions, the agency said.

01/12/2021

To my Clients,

New changes for a second PPP Loan and tax credits. Please read this entire email....

PPP loan round two. Must have a drop in gross revenue of 25% in “ANY” quarter of 2020 compared to same quarter in 2019. I will compute this number if I have your tax information. The PPP loan can be computed on the 2019 average payroll OR 2020 average payroll...

***********************************************************************
ERC (Employee Retention Credit). Previously this was NOT allowed if you obtained a PPP loan but now is allowed if

1.) Your gross receipts decreased by 50% in ANY quarter 2020 compared to same quarter in 2019. I will compute this number if I have your tax information. If you were not in business in 2019, you may still qualify but is not discussed here.

2.) You were NOT considered an essential business and YOUR business was part of a MANDATORY shut down.

NOTE – If your gross receipts did NOT reduce by 50% but you were required to shut down, then you can qualify. My SPECIFIC question is was your business considered NON essential and you were REQUIRED to shut down at ANY time in 2020……

****************************************************************
I need a reply email stating either

1.) I was considered a essential business and was NOT required to shut down my business. You can qualify based upon the 50% test above.

OR

2.) I was not considered an essential business and was required to shut down, or subject to a "partial shutdown" from XX date to XX date. If you were required to be shut down, You qualify. I need exact dates, NOT a guess, you were required to be shut down.

The ERC is a Tax Credit which is filed on the 4th quarter Form 941 payroll report so I MUST receive a reply to determine if you qualify for this credit.
****************************************************************

This ERC is a down and dirty explanation.

04/02/2020

To all my clients,

This is a very trying time and I want to assure you I am here for you and will get all information needed for the new Payroll Protection Loan. If you have NOT thought of, or have NOT already applied for, YOU SHOULD do this NOW. Part, or all, of this loan can be “forgiven” which means you will NOT have to repay. Calculating the amount which could be FORGIVEN should be an important tax planning objective and is why you are relying on my years of experience as your trusted CPA.

This will require furnishing your SBA banker copies of tax returns, financial statements and other documents they require. These documents should NOT be handed to bankers due to the Corona-19 virus and should be electronically delivered. I will NOT email any information to you, or your banker, and the recommend method is a Secure Online Portals which is explained below.

Portals are a secure online method to transfer documents. I will create an online portal to transfer all information to your banker. I will need an email address of your banker to set up this portal, but if your banker cannot access this portal due to security at their work, the portal will be created with your email address. You will have to furnish your banker your login information or you will have to forward this information to your banker which, again, I do NOT recommend emailing any documents with personal information.

If you would prefer to hand deliver these documents, although not recommended, I can make copies for you to pick up outside my office door at a specified time. I will NOT mail these documents due to the number of pages and would require me to walk into a post office and have contact with postal employees.

I will need to know which method above, 1.) banker portal, 2.) your portal or 3.) pick up at my office, you would prefer for delivery of documents. Due to the number of clients, I cannot combine the methods above so please pick the most convenient method.

Any discussions on these loans should be via phone call as I already know what most of your questions are and can answer with a phone conversation so make a list of questions you would like answered. If I do not answer the call, I am speaking to another client so please be patient and I assure you I will return your call and answer all your questions.

Stay safe an remember, as your CPA, I am here to guide you through this difficult process.

03/31/2020

CARES ACT (Coronavirus Aid, Relief, and Economic Security Act) - Small Business Provisions

These Provisions were just released and this discussion is an overview of this new provision and not meant to be inclusive.

I encourage sharing this and if you like my page you will be notified of future developments.

*******************************

REQUIREMENTS

1. 500 or fewer employees

2. Loan amount is 2.5 times the average total monthly payments for payroll, capped at 10 million.

3. Loan guarantees by government, but funded through private lenders (SBA)

4. Independent contractors and sole-proprietors may apply.
******************************

PAYROLL PROTECTION LOAN

1. Loan proceeds can be used for: “payroll costs”, mortgage payment, rent, utilities, and other debt obligations incurred before the covered period. Tipped employees payroll can be included.

2. Payroll amount is capped at $100,000 per employee pro-rated for the covered period which is February 15, 2020 – June 30, 2020.

3. Expatriate workers are excluded – this is an individual living and working in a country other than the US.

4. It appears that self-employed owners who receive a K-1 have their compensation included in the calculation.
***********************************

NATURE OF LOAN

1. Nonrecourse (unless used for unauthorized purposes)

2. No personal guarantee of borrower’s owners

3. No collateral requirement

4. Borrowers certification

• The uncertainty of all the economic climate necessitates the loan
• Funds will be used for “covered expense”
• No other similar loan application
• Between February 15, 2020 and December 31, 2020 recipient has not received a will not receive other similar
loans.
****************************************

ADDITIONAL ITEMS

1. No requirement to seek credit elsewhere

2. Maximum maturity of 10 years

3. Interest rate not to exceed 4%

4. At least 6 months deferral of P&I (up to 1 year)

5. No prepayment penalties
*************************************

LOAN FORGIVENESS – You Don’t Have to Repay this Amount!!!

1. Covered businesses who receive CARE loans may seek forgiveness of the portion of the loan that relates to payroll expense, mortgage payments, rent and utilities – Mortgage or lease obligation must have been incurred before February 15, 2020.

2. Expected Loan Forgiveness include payroll costs, rent/mortgage obligations and utilities.

• NOTE the term payroll costs means “salary, wage, commission, or similar compensation”, certain fringe benefits, state and local tax on compensation, self-employment income for sole-proprietors and independent contractors all capped at $100,000 per employee.
**************************************************

OBTAINING LOAN FORGIVENESS

1. Borrower must affirmatively seek loan forgiveness by filing an application

2. Lender to make decision on loan forgiveness within 60 days

3. Forgiveness will be reduced if employees are terminated during the “covered period” meaning between February 15th and June 30th.

4. Forgiveness will also be reduced if worker salaries are reduced.
**********************************************

ITEMS USED TO VERIFY LOAN FORGIVENESS

1. Payroll tax filings with the IRS (Form 941)

2. State income, payroll and unemployment insurance filings

3. Cancelled checks, payment receipts, etc. verifying actual payment of covered expenses

4. Certification under oath that (a) the information provided is true and accurate and (b) the loan was used to retain employees and pay covered expenses.

Limits on Amounts of Forgiveness – This is a calculation not within this discussion but if you are already paying employees, getting part of these payments forgiven is money you would not have received had you not applied.
*******************************************************

OTHER ITEMS

1. If a business has received an EIDL (Economic Injury Disaster Loan), it may refinance it with a paycheck protection loan.

2. Businesses may not receive multiple paycheck protection loans

3. All currently approved SBA lenders may offer paycheck protection loans, but the SBA still to write rules for facilitate this.