You can now pay your invoices with Venmo. You can scan the QR code or enter our Venmo user name @davisnagycpa within the Venmo App or website. New to Venmo? you can find more information and download the app here.
You can now pay your invoices with Venmo. You can scan the QR code or enter our Venmo user name @davisnagycpa within the Venmo App or website. New to Venmo? you can find more information and download the app here.
Please be advised that ODJFS is in the process of launching an online option for employers to report potential fraud on behalf of multiple current or former employees. The portal is estimated to go-live during the week of February 1st.
In the meantime, ODJFS encourages employers to direct employees to continue utilizing the existing online portal for individual reporting, by visiting unemployment.ohio.gov and selecting the Report Identify Theft button. Employers are also able to use the existing portal to report single instances of possible fraud on behalf of their employees.
For more information for victims, please direct employees to “Identity Theft and 1099 Resources” web page: unemploymenthelp.ohio.gov/IdentityTheft
For more information for employers, please visit https://unemploymenthelp.ohio.gov/employerFAQ/ .
ODJFS will issue additional notification next week once the employer portal is live and provide additional information for submission. In the meantime, thank you for your time and cooperation.
The program includes several grants funded by the Federal CARES Act to small businesses and individuals. The business applications will open on November 2, 2020 on a first-come, first-served basis.
The following business programs are included:
Although the application for the Small Business Relief Grant has not been released, you will need your receipts and/or statements that show the amounts incurred to complete your application. The costs will need to be in the name of the business completing the application and either paid for or charged within a 60-day period prior to the filing date. Documentation will need to be attached to your application. The following costs can be included: payroll, utilities, rent or mortgage payments, supplies or equipment.
We encourage you to review the grant information before November 2nd so that you are prepared when the application process opens. You can access the information using the following link: https://businesshelp.ohio.gov/small-business-relief-grant.html.
We are here to assist you with the application should you need our assistance. Since the process is on a first-come, first-served basis, we will not be able to help everyone the moment the application process opens. Should you wish to hire us to complete the application for you we will work on a first-come, first-served basis as well. Our fee will be $400 to complete the application process and we will not begin your application until you have provided a paragraph on how you were impacted by COVID-19 and copies of the needed expenditures listed above.
Should you have additional questions, please feel free to contact us.
Stay Safe, The Davis, Nagy & Company Team
I have my PPP loan, now what…
As rules and regulations keep changing, we want to provide the guidance we currently have. Just remember that the final regulations may be different. In order to have a portion or all of your loan forgiven, you need to understand the documentation that will be required. Each lending institution may have slightly different requirements or forms to complete, but this is what everyone should begin putting in their file. Once the lending institution reviews your information and approves it for forgiveness, remember the SBA may audit this information for up to 10 years. It is up to each company to prove why they qualified for the funds and that the funds were used for the required expenses for the loan to be forgiven.
Checklist to put in your SBA PPP Loan folder:
What can I use my PPP Loan funds on for the forgiveness piece? Generally, if you use the PPP Loan for following items, with 75% spent on payroll expenses and 25% the other items, you should qualify for forgiveness. If your FTE drops during your 8-week period, please contact us as this may affect your forgiveness calculation. Currently the regulations state that the expenses need to be incurred and paid during the 8-week period. We are waiting on clarification as to the incurred portion as these expenses may need to be prorated.
Sole proprietors and Independent Contractors without employees. If you received a PPP Loan based on your business net profit, we recommend you write two checks to yourself during the 8-week period as payroll for the loan forgiveness. The amount of the check should equal your monthly net profit computation. The balance should pay for your rent and utilities.
Remember, the legislation is still a moving target, but you need to make sure you are tracking the funds in detail and keeping copies of the receipts for the money spent. Should you have additional questions we are here to assist you the best we can.
The Davis, Nagy & Company Team
During this unprecedented time, many employers have been forced to lay off employees, in response to stay-at-home orders, social distancing restrictions, lack of available work, and concerns about contracting COVID-19. In response, the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided expanded unemployment benefits to impacted individuals. The CARES Act provides additional weekly supplement payments, additional weeks of benefits, and a new program, Pandemic Unemployment Assistance, for those who traditionally have not qualified for unemployment benefits.
As employers begin reopening their doors to a “new normal,” in compliance with the Responsible RestartOhio requirements, many employees are expected to return to their previous employment. Ohio law prohibits individuals from receiving unemployment benefits if they refuse to accept offers of suitable work, or quit work, without good cause.
If you have employees who refuse to return to work or quit work, it’s important that you let the Ohio Department of Job and Family Services (ODJFS) know so we can make accurate eligibility determinations.
To report these occurrences, please visit unemployment.ohio.gov/employer and click on “Report COVID-19 Work Refusals.” This will take you to a web page to report these employees for investigation by ODJFS. Based on an individual examination of the facts from both parties, our claims examiners will then determine whether good cause exists for the individuals in question to continue receiving unemployment benefits.
Next week, the full policy that ODJFS will use to determine individuals’ continued eligibility for unemployment benefits after refusing to return to work will be posted here: http://jfs.ohio.gov/ouio/UIPolicy/index.stm. This policy will underscore the presumption that if an individual’s job is available for them to work again, they will not be eligible for unemployment benefits.
March 27, 2020
To our Valued Clients:
So much has changed in the week since we last reached out to you. We hope that you are all staying healthy. As you may have heard, Congress has passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It contains many programs for both individuals and small businesses, and we wanted to make you aware of some of the provisions.
Individual relief includes:
Business relief includes:
As you may know, the deadline for filing and paying federal taxes due April 15, 2020 has been pushed back to July 15, 2020. We have received some clarification on a few related items this week. First, the extension is for returns and payments due 4/15/20 and includes any first quarter estimates due. Please note that it does not include the second quarter estimate due 6/15/20. So, your second quarter estimate will have a due date earlier than your first quarter estimate.
The Ohio legislature has passed a bill extending the state filing deadline to July 15 the Governor signed it yesterday. We do not have clarity yet on local tax filings.
Our office remains closed through April 6th. We are working remotely and have access to email and phones. We are again encouraging you to mail your information to us, or request that we set up portal access for you to upload your documents. If you would like access and are not already registered, please email email@example.com and we will create an account for you. You are then able to upload your documents to us and we are able to upload tax returns back to you.
We have additional information regarding unemployment benefits, sick pay, and SBA loans on our website at www.davisnagycpa.com.
We appreciate your patience while we complete your returns. We have had many additional obstacles this tax season and are working diligently to complete your returns as soon as possible. Our thoughts are with you and your families.
Kathy and Sharon
Isaac M. O’Bannon, Managing Editor On Dec 26, 2018
If you heard that millions of people tried performing surgery on themselves every year, you’d likely be aghast or at least perplexed that people would take such a chance at something so complex. Well, every year, millions of taxpayers decide to perform complex tax preparation by themselves and, while it may not put their life at risk, it is a perilous task.
For taxpayers with the simplest income tax returns, do-it-yourself online tax systems will likely suffice. These people often have only one source of income coming from a traditional employer, may have a home mortgage with interest, student loan debt and perhaps some childcare credits. For individuals with more complex incomes, such as revenue from businesses, income from interest and dividends, capital gains on a home sale or foreign assets, seeking the expertise of a professional can save time, money and potential legal complications.
For small business owners and most taxpayers, there are many reasons why seeking a tax professional is better than performing your own tax surgery.
Even simple tax situations can be complex, especially if the person owns a business or receives income from one, has children, has recently divorced, received a Form 1099, had income from a state you don’t live in, or moved. (www.usatoday.com/story/news/politics/2014/04/02/irs-commissioner-urges-congress-to-simplify-tax-code/7215107/) Adding to the complexity, new tax laws are enacted every year that affect virtually everyone, making it tough to keep up with changes and how they might affect you. For small businesses that have to manage income tax withholding and reporting for its employees, taxes are even more complex, and then there’s healthcare reporting. While tax software can help, an experienced tax pro “has seen it all before,” and also keeps up with tax law changes through educational courses.
While you may be able to prepare your taxes yourself for $150 or less online, many do-it-yourself filers spend an inordinate amount of time doing it. According to the IRS, the average taxpayer spends 13 hours preparing their return. (www.nolo.com/legal-encyclopedia/how-much-time-do-you-spend-preparing-your-tax-return.html.) Hiring a tax pro can reduce that to the time it takes to gather your tax documents and forward them to his or her office, go over a few items with the pro, then review the final return for accuracy. If your time is better spent with family, friends or even binge-watching tv during those early days of spring, then hiring a tax pro can make for sunnier days.
According to a 2017 survey by the National Society of Accountants, the average federal tax return in the U.S., including the tax return for the person’s state of residence, cost $273 for a professional preparer to handle (www.cpapracticeadvisor.com/12300090). A Schedule C (for business income and expenses) only costs an average of $184 more. In addition to saving you hours and hours of painfully boring and perilous tax guessing, experienced tax preparers also know all of the deductions that you may qualify for, and which items are tax deductible if you own a business. They can also easily tell you whether it’s more beneficial to itemize or take the standard deductions. Even if you just earn a little extra income on the side, a tax pro may be able to find you deductions or credits that will more than pay for their services and keep more of your hard earned money in your pocket. Or get Uncle Sam to send more of it back in a tax refund. To top it off, the cost of having your taxes prepared by a professional can also be tax deductible.
If you do your taxes yourself, you are much more likely to make mistakes … and they can cost you big. Even simple math errors can cause a return to be inaccurate, leaving the taxpayer liable for past taxes and interest. For errors the IRS believes are not accidental, such as failing to report income, taxpayers can also face large fines and even criminal prosecution. Here are tips to avoid common tax-filing mistakes: www.bankrate.com/finance/taxes/10-common-tax-filing-mistakes-to-avoid-1.aspx.
Have you ever finished your taxes and were pleased with the income tax refund amount, but were less than confident in the accuracy of the return? Or if a particular deduction or credit really applied to you? The only people that look forward to an IRS audit are IRS auditors, and the best way to avoid their scrutiny is to make sure your tax return is in compliance with the tax laws. The best way to do that is to hire a professional who lives, works and breathes taxes every day (or at least a lot more frequently than you do). There is still a chance than any taxpayer will get audited, but if you use the services of a professional CPA, Enrolled Agent or Tax Attorney, and your return is selected for further inspection by the IRS, those professionals will help represent you on your behalf before the IRS. Don’t go before a court without a lawyer, and don’t go before the IRS without a tax pro.
The taxes you pay this year can affect the taxes you will owe next year- so it is best to look at the larger picture- and plan ahead for those events that you can plan (college, new house, business changes, moving, divorce). Most tax professionals would like you to meet with them before it’s time to do your taxes, while there is still time to take proactive steps to reduce your taxes or minimize other effects. A tax planning meeting can result in significant savings for many taxpayers and businesses.
By Ken Berry, J.D., CPA Practice Advisor Tax Correspondent On Jan 16, 2019
*Updated 10:01 am, ET, Jan. 16. 2019.*
Tax refunds may not be going out on time after all.
As the government shutdown approaches a full month—it’s already the longest in history—more doubt is creeping in as to whether a reduced staff at the IRS will be able to process returns and issue refunds in a timely manner. What’s more, as this is being written, there’s no end in sight to the stalemate.
When the IRS announced that tax filing season would kick off on January 28, it also stated that the shutdown wouldn’t delay tax refunds due to early filers. “We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown,” said IRS commissioner Chuck Rettig. The proclamation was made in accordance with directives from the White House.Read More
At the time, the IRS was operating with only about 10,000 employees, or roughly 12% of its usual staff. In a new contingency plan released on January 15, the IRS said that it was calling back more workers, increasing its staff to about 46,000 employees, or a total of 57% of its workforce. The additional employers getting the call will be working without pay, so their motivation may be suspect.
Yet some observers are commenting that even this increase is “too little, too late” to enable the IRS to meet its commitments. The agency was already operating on a tight budget amidst controversy in recent years over alleged improprieties. It will have to quickly get employees up to speed to handle the expected crush once returns start flooding in at the end of the month.
To further complicate matters, this is the first year that many provisions in the Tax Cuts and Jobs Act (TCJA) take effect. Under the TCJA, personal exemptions are eliminated, the standard deduction is doubled and numerous deductions are modified, among other significant changes. It was already going to be a challenging tax filing season and the shutdown only adds fuel to the fire.
“It’s the biggest tax reform change in 30 years. There are going to be many, many millions more questions that are asked. You’ve got a shutdown. You’ve got fewer employees,” said Tony Reardon, president of the National Treasury Employees Union that represents IRS employees, as quoted in an article in the Los Angeles Times. “To me, that is all a big brew that spells potential trouble.”
Don’t expect taxpayers to remain patient. During the first week of filing last year—spanning January 29, 2018 through February 3, 2018— the IRS accepted about 18.3 million returns and issued 6.2 million refunds. The IRS says that the average refund, based on 2017 returns, is $2,895.
Finally, other services at the IRS will be affected by the crackdown, notably the level of assistance offered to both taxpayers and practitioners. With fewer experienced workers on hand, there are obviously fewer staffers to answer call-ins and provide information. This is expected to lead to a big jump in filing extension requests for the 2018 tax year.
=Original article appears below.=
Despite the shutdown of the federal government, which has now dragged into its third week, the IRS expects to kick off the tax filing season on Monday, January 28.
It will begin accepting both electronic and payer returns on that day.
The announcement was made on January 7 in accordance with directives from the White House (IR-2019-01, 1/7/19).
Traditionally, the IRS hasn’t issued tax refunds when the government is shut down, as evidenced by refund delays during an extended period in 2013. This has caused concern among many early filers who want to get their hands on the tax money as soon as possible. But the IRS has assured taxpayers that it will be conducting business as usual no matter how long the stalemate lasts.
“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown,” said IRS commissioner Chuck Rettig in a press release. “I appreciate the hard work of the employees and their commitment to the taxpayers during this period.”
Currently, the IRS is working with only about 12% of the staff it usually employs.
What’s more, resources were already stretched then due to a limited budget. The IRS has yet to announce ant additional contingency plans for the shutdown or explained how it will meet its objectives. It has, however, stated that it will be recalling a big part of its workforce.
To further complicate matters, the 2018 returns that are to be filed by individual taxpayers this year include numerous changes implemented by the Tax Cuts and Jobs Act (TCJA). Among other significant provisions, the TCJA lowers tax rates, eliminates personal exemptions and modifies certain deductions. This is expected to place an even greater strain on the system.
“IRS employees have been hard at work over the past year to implement the biggest tax law changes the nation has seen in more than 30 years,” noted Rettig. The filing deadline for 2018 tax returns remains Monday, April 15, 2019 for most taxpayers. Due to local holidays, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.
Software companies and tax professionals can start accepting and preparing tax returns before January 28 and then submit the returns when the IRS systems open later this month. The IRS is urging taxpayers to file their tax returns electronically to minimize errors and provide faster refunds.
IR-2018-248, December 11, 2018
WASHINGTON — The Internal Revenue Service today reminded retirees born before July 1, 1948, that they usually must take distributions from their individual retirement arrangements (IRAs) and workplace retirement plans by Dec. 31.
The payments, called required minimum distributions (RMDs), are normally made by the end of the year. Those who reached age 70½ during 2018 are covered by a special rule that allows them to wait until April 1, 2019, to take their first RMDs.
This means that those born after June 30, 1947, and before July 1, 1948, are eligible for this special rule for 2018. If they wait until early 2019 to take that first RMD (up until April 1, 2019), it can be counted toward their 2018 RMD, but is still taxable in 2019.
The special April 1 deadline only applies to the RMD for the first year. For all subsequent years, the RMD must be made by Dec. 31. So, for example, a taxpayer who turned 70½ in 2017 (born after June 30, 1946, and before July 1, 1947) and received the first RMD (for 2017) on April 1, 2018, must still receive a second RMD (for 2018) by Dec. 31, 2018.
The required distribution rules apply to owners of traditional, Simplified Employee Pension (SEP) and Savings Incentive Match Plans for Employees (SIMPLE) IRAs. Roth IRAs don’t require distributions while the original owner is alive. RMDs also apply to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans.
An IRA trustee must either report the amount of the RMD to the IRA owner or offer to calculate it for the owner. Often, the trustee shows the RMD amount on Form 5498 in Box 12b. For a 2018 RMD, this amount is on the 2017 Form 5498 normally issued to the owner during January 2018.
An IRA owner must calculate the RMD separately for each IRA they own, but can withdraw the total amount from one or more of the IRAs. However, RMDs required from workplace retirement plans (like 401(k), 403(b), and 457(b) plans) have to be taken separately from each of those plan accounts.
The RMD for 2018 is based on the taxpayer’s life expectancy on Dec. 31, 2018, and their account balance on Dec. 31, 2017. The trustee reports the year-end account value to the IRA owner on Form 5498 in Box 5. Use the online worksheets on IRS.gov or find worksheets and life expectancy tables to make this computation in the Appendices to Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).
For most taxpayers, the RMD is based on Table III (Uniform Lifetime Table) in IRS Publication 590-B. So, for a taxpayer who turned 72 in 2018, the required distribution would be based on a life expectancy of 25.6 years. A separate table, Table II, applies to a taxpayer whose spouse is more than 10 years younger and is the taxpayer’s only beneficiary.
Though the RMD rules are mandatory for all owners of traditional, SEP and SIMPLE IRAs and participants in workplace retirement plans, some people in workplace plans can wait longer to receive their RMDs. Usually, employees who are still working can, if their plan allows, wait until April 1 of the year after they retire to start receiving these distributions. See Tax on Excess Accumulations in Publication 575. Employees of public schools and certain tax-exempt organizations with 403(b) plan accruals before 1987 should check with their employer, plan administrator or provider to see how to treat these accruals.
Everyone knows about CPAs, right? Although you may often hear friends talk about meeting with their CPAs at tax time or when they need critical business advice, in fact many people are not really aware of what it means to be a certified public accountant.
When you are looking for financial advice, keep in mind that not all accountants are CPAs. Many states allow anyone to use the title “accountant,” but only CPAs have passed the CPA exam and meet their state board of accountancy’s licensing requirements. CPAs are also the only professionals who can perform audits of publicly traded companies. If you are seeking the services of a highly trained professional, make sure they have the “CPA” initials after their name.
Don’t think you can afford tax and business planning assistance? Think again!
At Davis, Nagy & Company we specialize in small business success. We focus on minimizing tax liabilities and business planning so you can focus on growing your business.
We look forward to being your one-stop for taxes, payroll and business planning. And, we are more cost-effective than you might think. Give us a call at 330.665.9405 for details.