Cumulus Bookkeeping & Consulting

🤓🎯💰

QuickBooks Online Certification Level 1 was issued by Intuit to Misty Mesel. This badge is awarded to individuals who have passed the QuickBooks Online Certification: Level 1 exam. Completing the Level 1 certification program and earning a badge demonstrates your proficiency in the QuickBooks platform. As a Certified ProAdvisor, you are eligible to earn additional points tha...

https://www.irs.gov/newsroom/for-california-storm-victims-irs-postpones-tax-filing-and-tax-payment-deadline-to-nov-16

For California storm victims, IRS postpones tax-filing and tax-payment deadline to Nov. 16 | Internal Revenue Service IR-2023-189, Oct. 16, 2023 — The Internal Revenue Service today further postponed tax deadlines for most California taxpayers to Nov. 16, 2023. In the wake of last winter’s natural disasters, the normal spring due dates had previously been postponed to Oct. 16.

Does Your Business Add a Surcharge?

In California, a retailer owes tax based upon their gross receipts on retail sales (that is, sales to consumers). Gross receipts include all amounts received with respect to a sale, with no deduction for the cost of the materials, service, or expense of the retailer (you) passed on to the purchaser (your customer), unless there is a specific statutory exclusion.

If you separately add a surcharge to your taxable sales, whether it be a flat fee or a percentage of the selling price, tax generally also applies to the surcharge amount. Surcharges have various titles, such as a merchant card processing fee, healthcare surcharge, COVID-19 surcharge, wage increase fee, inflation fee, tourism fee, fuel surcharge, paid sick leave fee, restaurant surcharges, or other such charges.

Read more here: https://cdtfa.ca.gov/lawguides/vol1/sutl/6012.html

Sales And Use Tax Law - Section 6012 The mission of the California Department of Tax and Fee Administration is to serve the public through fair, effective, and efficient tax administration

Good reminders about how to make sure your deductions are accepted in the face of an IRS challenge.

Keep These DOs and DON’Ts in Mind When Deducting Business Meal and Vehicle Expenses If you’re claiming deductions for business meals or auto expenses, expect the IRS to closely review them. In some cases, taxpayers have incomplete documentation or try to create records months (or years) later. In doing so, they fail

This is really great news coming out of the proposed relief bill...

“The provision, part of the year-end coronavirus relief bill expected to soon clear Congress, would ensure that PPP recipients can deduct the payroll costs and other expenses covered by forgiven loans, even though the loans themselves are tax-free income. The move would reverse a Treasury Department ruling that denied the deductions.”

PPP Borrowers Stand to Gain Tax Deductions Congress is considering countermanding Treasury by granting tax benefits worth hundreds of billions of dollars to businesses participating in the Paycheck Protection Program.

TLDR: Make sure you have your mileage expense logs updated as they happen!

From The General Ledger, the newsletter produced by the American Institute of Professional Bookkeepers:

"Business Owner Fails to Prove Travel Expenses"

The case: A real estate consultant and broker worked as an independent contractor. He deducted a significant amount of travel expenses on his Schedule C. The IRS denied most of the travel expense deductions.

Held: For the IRS. The taxpayer provided three separate travel logs—but all three were created after the tax dispute began. The first log was constructed from memory after the IRS’s assessment. The second was created after the taxpayer went through his bank and credit card statements and receipts. The third log was not explained.

The court said none of the logs contained any data that connected the expenses incurred to the taxpayer’s work. Nor was there substantiation of the clients involved, business topics discussed, or anything else related to the taxpayer’s work. He also conceded that he had made personal as well as business trips and provided no basis on which to separate the two.

Also, because the travel logs were created after the IRS began examining the tax returns, the taxpayer did not meet the requirement to keep adequate and contemporaneous records of his travel expenses as they were incurred. [Franklin v. Comm., T.C. Memo. 2020-127]

In case you were worried that you were missing a deadline for requesting forgiveness of your PPP loan, here's a helpful clarification: https://www.currentfederaltaxdevelopments.com/blog/2020/10/14/deadline-to-apply-for-forgiveness-of-ppp-loan-is-loan-maturity-date-not-october-31-2020 #:~:text=4.,in%20the%20upper%2Dright%20corner.

The expiration date in the upper right corner of the form DOES NOT mean you can't apply for forgiveness after 10/31/20. It's merely a requirement of the Paperwork Reduction Act.

Rest assured there is plenty of time to submit your applications for PPP loan forgiveness!

Santa Rosa-based businesses... please take note.

Santa Rosa Minimum Wage Starts July 1 Starting July 1, 2020, the City of Santa Rosa’s local ordinance increasing minimum wage will go into effect. This increase is estimated to assist over 25,000 people who work within Santa Rosa city limits by providing them with greater economic stability while increasing consumer spending for the e...

Some clear and updated guidance on PPP forgiveness courtesy of the good folks at Gatto McFerson CPA

www.gattomcferson.com

The long-awaited PPP Loan Forgiveness Application

Paycheck Protection Program Loan Forgiveness Application PPP Loan Forgiveness Calculation Form

New (resurrected) form for reporting payments to independent contractors made in 2020. We’ll be preparing and filing lots of these for our clients come January 2021.

Form 1099-NEC | Nonemployee Compensation Reporting Guide IRS will require the use of the new 1099-NEC for reporting non-employee payments, find out everything you need to know and get filing details for the next tax season.