Dear Clients and Friends:
Last night President Trump signed the second COVID-19 Relief package.
The new package includes a one-time stimulus payments of $600 per individual in households with income under $75,000 per year, $150,000 for married couples and extends Federal Unemployment Benefits.
Additionally, the Paycheck Protection Program (PPP) forgivable loans has reopened. Eligible Businesses will have no more than 300 employees and have suffered revenue loss of 20% or more in any quarter of 2020 versus the same quarter in 2019.
As the Coronavirus (COVID-19) continues to affect local communities and global economies, you may have concerns about your financial well-being. There are limitations on our physical work environment due to COVID-19; however, we’re working to minimize disruptions and impacts to you so that we can still offer the same level of superior service and support you have come to expect from our team.
We have implemented procedures to protect the health and safety of our staff, clients and community. If you have tax or financial planning questions or need advice on ways to navigate the expanded relief benefits available, we are here for you. If you have any questions or concerns, please do not hesitate to contact us.
We are proud to have helped many of our clients receive forgivable loans under the Cares Act Paycheck Protection Program. The second round of funds are now available under this program if you need our assistance in applying, please contact us. If you have received a loan, we are glad to assist you in navigate the complicated rules regarding applying to forgiveness. will update our website as more information becomes available.
As you are aware, we have been closely monitoring the status of the PPP Forgiveness applications and the uncertainty of the deductibility of the expenses eligible for forgiveness.
Many banks are now accepting the forgiveness applications. There are several different versions of the application depending on the amount of PPP loan you received:
Form 3508S is used by borrowers who received under $150,000, new form pending.
Form 3508EZ is used by borrowers who received more than $50,000 and did not reduce wages by more than 25%, did not reduce the number of employees or average paid hours, or had to reduce hours because of compliance with local laws.
From 3508 is used by all borrowers who did not qualify for the shorter forms.
No matter which form is used, there are still documents that are required to be submitted to the lender with the application. In previous notices, we requested that you start compiling the information as you made the payments. You will need the following:
Documents required might include bank statements, credit card statements, cancelled checks, and invoices. Basically, anything that proves you spent the money properly is required! Please note that each lender has different formats on the capture of these documents. However, they will need to be in pdf format and probably uploaded separately by the four categories listed above.
We are available to assist in the completion of the Application. However, you will need to supply the raw data and the documentation. In addition, the following information is required on the Application:
You might need to contact your lender regarding this information. We do not have the loan numbers.
If you have been tracking your payments using our previous guidance, you might know if you spent all the money within 8 weeks of the receipt of the loan money. If that is the case, we only need the eight weeks of documentation. You might remember that the eight weeks was extended to 24 weeks. Most of you might need to submit the documents for the 24 weeks.
Regarding the tax implications of the forgiveness of the loan, in guidance issued late on Wednesday, the IRS reiterated its position that taxpayers cannot claim a deduction for any otherwise deductible expense if the payment of the expense results in forgiveness of a Paycheck Protection Program (PPP) loan because the income associated with the forgiveness is excluded from gross income under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The IRS says that if the taxpayer has a reasonable expectation of reimbursement (in the form of loan forgiveness) at the end of 2020, deduction of the expenses is not allowed.
The American Institute of CPA’s (AICPA) believes that the IRS’s interpretation denying deductions of expenses forgiven under the PPP program is contrary to Congress’s intent.
This is not good news. With Congress at a standstill, we believe the best course of action at this point is to prepare for the worst tax scenario. We will prepare year-end projections and the resulting tax owed three ways:
We will provide you with our determination, but it is your ultimate decision.
Obviously all this is subject to more change. Fingers-crossed, Congress and the IRS will come to some form of compromise in favor of the intent of the PPP Program and not penalize the businesses who continued to pay their employees. This would allow you to deduct the expenses you paid with the PPP money and allow you to not include income for the forgiveness.
Income tax provisions:
Our firm remains open and available to serve you
Our commitment to you:
During this unpredictable and challenging time, it’s more important than ever to stay connected. We’re in this together and our thoughts go out to all that have been impacted by this unprecedented situation.
Cindy, Steve, Jason and Team
Additionally, the government is considering other financial measures including one or two stimulus payments, but nothing has been finalized as of this writing. We will keep you updated as things change. Go to our website www.theflacpa.com for updates.
We want to ensure you that we will make every effort to help you meet the April 15th Deadline. WE ARE HERE TO HELP
BE Safe and Healthy……….
With year end approaching we have been planning for our future and are pleased to welcome our new partner; Jason Weinrub CPA, effective January 1, 2020. Our new name will be Rosenbaum Sobel Weinrub LLC.
Jason brings to us over 20 years of experience working for large regional CPA firms and provides consulting services to business and individuals ranging in size from start-ups to $250 million in revenue. Jason specializes in tax compliance, financial accounting, and due diligence services related to mergers and acquisitions. Jason consults with clients across a broad range of industries including wholesale/distribution, professional service firms, telecommunications, real estate, and construction. Jason also specializes in multi-state tax compliance with closely held companies.
Jason is available to meet with any new clients and our existing clients to strategize or plan for the upcoming 2019 tax season. We are very excited about our future with Jason.
We are also pleased to welcome Gary Brown, CPA to our firm as a Principal. Over his long career Gary has established himself as an excellent practitioner and a model of excellence in our profession. Gary will provide financial and consulting services to his existing clientele and ours. Gary’s staff of experienced CPA’s have also become part of our team. This combination of expertise and professionalism will enable us to have access to a larger pool of technical skills in tax planning and accounting as well as additional business management, financial and consulting services.