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Important COVID-19 Updates – 03/28/2020

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:

  • There will be a one-time tax rebate check of $1,200 per individual and $500 per child.  There are no earned income requirements, and the full rebate is available for those with incomes at or below $75,000 for individuals, $112,500 for head of household, and $150,000 for married couples.
    • Above these income levels, the benefit is phased out with a $5 reduction for every $100 over these limits that is earned.  The rebate completely phases out at $99,000 for single filers, $146,500 for head of household, and $198,000 for joint filers with no children.
    • The IRS will be using direct deposit whenever possible.
  • Expanded unemployment benefits –
    • The federal government will cover the cost of additional benefits of up to $600 per week through July and providing for an additional 13 weeks of regular benefits beyond the normal 26 weeks.
    • The benefits would be available to workers who are unemployed due to their own illness, illness in a family member, the necessity to quarantine, job loss because of the virus, and staying home to take care of a child whose school or child care is closed because of the virus. It excludes those who can telework for pay, or who are already receiving paid sick leave or other paid leave benefits.
  • Student loan payments are deferred on all federal owned student loans.  This includes both principal and interest through September 30, 2020, without penalty.
    • For the remainder of 2020, employers can repay up to $5,250 of an employee’s student loans without that payment counting toward the employee’s taxable income.
  • Individuals can deduct up to $300 in cash contributions in 2020, regardless of whether they itemize their deductions.
  • Required minimum distributions from retirement plans are waived for 2020.
    • Individuals who have experienced adverse financial consequences as a result of COVID-19 are able to make withdrawals of up to $100,000 from their retirement funds without having to pay the 10% penalty normally incurred for individuals under 59 ½.
    • Loans from certain retirement plans will be allowed for those experiencing adverse financial consequences so that their funds can remain invested and benefit from market growth.

Business relief includes:

  • The Paycheck Protection Program, operated through the SBA’s 7(a) loan program, would provide for loans of up to 2.5 times the employer’s average monthly payroll at a maximum interest rate of 4%.
    • The portion of the loan used to keep employees on payroll, make rent or mortgage payments, utilities, insurance, or certain other costs during an 8-week period beginning on the loan date, would be forgiven on June 30th.
    • Amounts not forgiven would convert to a 10-year loan.
  • Employers that have closed or have suffered economic hardship and continue to pay employees that are on leave may be eligible for a 50% credit on up to $10,000 of wages paid.
  • Employers and self-employed individuals can defer payment of payroll taxes incurred during 2020.  Half would be paid by the end of 2021, and half by the end of 2022.
  • The loss limitation for pass-through businesses is modified, allowing them to deduct excess business losses.  In addition, losses from 2018, 2019, and 2020 can be carried back to the previous 5 years, creating refunds.
  • The SBA will pay all principal, interest, and fees on all existing SBA loans for 6 months.

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 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

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

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6 Reasons Small Business Owners Should Hire a Tax Pro

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.
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Will Government Shutdown Affect Tax Refunds?

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.

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Deadline Dec. 31 for most retirees who must make required retirement plan distributions

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.
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What does CPA stand for? Certified Public Accountant

certified public accountant - cpa

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. 
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What Kids And Their Parents Should Know About Summer Jobs And Taxes

Image from Shutterstock

Kelly Phillips Erb Forbes Staff

Now that the fireworks are over and summer is officially in full swing, many high school and college students are thinking about getting a seasonal job. Whether kids are serving up slices, mowing lawns or ringing up groceries, here’s what they and their parents should know about summer jobs and taxes:

You may not owe taxes, but you may still need to fill out tax forms. Mark Luscombe, Principal Analyst, Wolters Kluwer Tax & Accounting, says that a summer job may be the first time that kids encounter a form W-4. Figuring out what to claim as an adult can be tricky, but it’s typically a little easier for children with seasonal jobs. With the increased standard deduction, he says, it’s less likely that a teen filing on his or her own will owe taxes. If you’re sure that you won’t owe taxes, Luscombe says to consider claiming an exemption from withholding. If you don’t know, claim 0 or 1, since any over-withholding should be refunded to you at tax time.Read More

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Exciting developments happening this summer!

Dear Valued Client,

Exciting developments happening this summer!

We are pleased to announce that Davis CPA and Associates, LLC is merging with Sharon L. Nagy, CPA Inc. effective July 1, 2018. We can’t wait for our clients to meet the new team and see our new location. The new practice will be known as Davis, Nagy & Company LLC and the new location will be 1270 S. Cleveland-Massillon Rd. Bldg. A Ste. 110, Copley, OH 44321.

Davis CPA and Associates, LLC brings over 53 combined years of public and private accounting and tax knowledge. Davis CPA has distinguished the service they provide to their clients by going beyond what is considered to be the “typical” CPA role.  Clients have learned to rely on the firm for their individual and business tax, payroll, and business consulting needs. Davis CPA and Associates, LLC currently has two team members, Kathy Davis, CPA and Ken Gillette. Kathy’s area of expertise is tax and business planning, while Ken’s focus is financial business planning and payroll services.
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26 Ways the New Tax Law Will Affect Your Wallet

Getty Images
By Kevin McCormally, Chief Content Officer , and Sandra Block, Senior Editor and Joy Taylor, Editor | January 4, 2018

The new year starts with a new tax law affecting every taxpayer in the land. Now that a jubilant President Trump has signed the massive tax overhaul into law, it’s time for the number crunching to move from Capitol Hill to your kitchen table. Do the pros and cons found in the 500-plus pages of legislative language add up to good news or bad news for your family’s bottom line?

Here’s a look at key provisions of the new law that could affect everything from your family to your investments to your retirement planning. Most of the changes go into effect right away in 2018, but will NOT affect your 2017 tax return due in April. In almost every case, that return is covered by the old rules. Also, note that many of the changes affecting individuals are scheduled to expire after 2025. Unless a future Congress acts to extend them, most of these rules would revert to those in effect in 2017.

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New tax withholding tables are issued


By Sally P. Schreiber, J.D.
January 11, 2018

The IRS on Thursday issued new income tax withholding tables that reflect new tax rates and other changes for individuals implemented by P.L. 115-97, known as the Tax Cuts and Jobs Act, enacted Dec. 22 (Notice 1036). Employers should use the updated withholding rules for 2018, putting them into effect as soon as possible but no later than Feb. 15, the IRS said. Until then, employers should continue to use the 2017 withholding tables.Read More

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Avoid these 8 entrepreneurial time-wasters


Written on Nov 13, 2017

Here are eight time-wasters to avoid for a more productive and efficient workday:

1. Being unorganized
If you come into work every day without a clear plan, the hours will fly by without anything to show for it. At the end of each day, assess the items that must be accomplished tomorrow.

Assemble a list of priorities with the understanding that other urgent issues may come up later.Read More