HBK is again among the Top 100 Accounting Firms in the U.S.

Date July 28, 2020
Authors
Categories

HBK CPAs & Consultants (HBK) is again among the Top 100 Accounting Firms in the U.S., according to the latest rankings by Accounting Today magazine. The recently released 2019 study lists HBK as the 52nd largest firm, up from 55th largest in the 2019 study. The Accounting Today ranking is based on information compiled through benchmarking data and independent research as well as recommendations from the most successful firms in the industry.

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Senate Bill Agreement

Date March 26, 2020
Categories
Early Wednesday morning, Senate Majority Leader Mitch McConnell announced that Senate Democrats and Republicans reached an agreement on the $2 trillion relief bill known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act (“Act”). Late last night, the U.S. Senate approved the historic rescue plan which calls for $250 billion for direct payments to individuals and families, $350 billion in small business loans, $250 billion in unemployment insurance benefits and $500 billion in loans to distressed businesses. The House is scheduled to vote on the legislation Friday. President Trump urged Congress to act “without delay” and said he would sign the legislation immediately. The CARES Act includes the following provisions: Direct Payments to Individuals – If passed, the Act would include payments to lower- and middle-income individuals of $1,200 for each adult (up to $2,400 for a married couple) and $500 for each child. Individuals who earn $75,000 or less and married couples earning $150,000 or less in adjusted gross income are entitled to the full payment. The payment would be reduced if income exceeds these amounts, phasing out entirely at $99,000 for singles, and $198,000 for couples without children. The income thresholds would be based on 2019 income tax returns, or 2018 if a 2019 return has not yet been filed. Expansion of Unemployment Insurance – The Act would also extend coverage for unemployment insurance to four months, and increase the eligibility and amount provided by an extra $600 per week. Limits and Oversight – There would be additional oversight on how companies use government loan funds, protecting workers and preventing companies from providing executive bonuses. Paycheck Protection Program – The Act would increase the government guarantee of loans made for the Payment Protection Program under section 7(a) of the Small Business Act to 100 percent through December 31, 2020. It would increase the maximum 7(a) loan amount to $10 million through December 31, 2020, and provide a formula by which the loan amount is tied to payroll costs incurred by the business to determine the size of the loan. The Act specifies allowable uses of the loan include payroll support, such as employee salaries, paid sick or medical leave, insurance premiums, and mortgage, rent, and utility payments. Any loan amounts not forgiven at the end of one year (as discussed below) would be carried forward as an ongoing loan with a maximum term of 10 years, and a maximum interest rate of four percent (4%). The 100 percent loan guarantee would remain intact. Loan Forgiveness – The Act would establish that the borrower will be eligible for loan forgiveness equal to the amount spent by the borrower during an 8-week period after the origination date of the loan on payroll costs, interest payment on any mortgage incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020. The amount of eligible loan forgiveness would be reduced proportionally by any reduction in employees retained compared to the prior-year and reduced by the reduction in pay of any employee beyond 25 percent of their prior-year compensation. To encourage employers to rehire any employees who have already been laid off due to the COVID-19 crisis, the Act provides that borrowers that re-hire workers previously laid off will not be penalized for having a reduced payroll at the beginning of the period. Employee Retention Credit – This provision would provide a refundable payroll tax credit for 50 percent of wages paid by employers to employees during the COVID-19 crisis. The credit would be available to employers whose (1) operations were fully or partially suspended, due to a COVID-19 related shut-down order, or (2) gross receipts declined by more than 50 percent when compared to the same quarter in the prior year. The credit would be based on qualified wages paid to the employee. For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the COVID-19-related circumstances described above. For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is open for business or subject to a shut-down order. The credit would be provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. The credit would be provided for wages paid or incurred from March 13, 2020 through December 31, 2020. Delay of Payment of Employer Payroll Taxes – This provision would allow employers and self-employed individuals to defer payment of the employer‘s share of the Social Security tax than they would otherwise be responsible for paying to the federal government with respect to their employees. Employers are generally responsible for paying a 6.2 percent Social Security tax on employee wages. The deferred employment tax would be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022. Additional Business Tax Provisions – The following would be changes to the tax code aimed to assist businesses with cash flow:
  • Increase to the net operating loss (NOL) carryback period to five years for NOLs arising in 2018, 2019, or 2020
  • Modification to the limitation on losses for taxpayers other than corporations
  • Make corporate alternative minimum tax credits immediately refundable
  • Increase the limitation on business interest expense from 30 percent to 50 percent
  • Technical correction to allow for the immediate write off of qualified improvement property
  • Temporary exception from the alcohol excise tax for alcohol used in hand sanitizer
  • Increase to the corporate income limitation on charitable contributions to 25 percent
  Additional Individual Tax Provisions – the following would be changes to the tax code aimed to assist individual taxpayers and families:
  • Waiver of the 10 percent early withdrawal penalty for distributions up to $100,000 from qualified retirement accounts, income would be subject to tax over three years, and the taxpayer may recontribute the funds to an eligible retirement plan within three years without regard to contribution limitations
  • Waiver of the required minimum distributions rules for 2020
  • Allowance of a $300 above-the-line deduction for charitable contributions
  • Elimination of the income limitation for charitable contributions
  Since this is a developing story, we will continue to provide additional information as it becomes available. If this Act is signed into law, we will be providing a more comprehensive overview of these provisions and what they may mean for our clients. If you have any questions, or would like to discuss any of these provisions, please contact your HBK advisor.

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IRS to delay the April 15 tax payment deadline by 90 days

Date March 18, 2020
Authors Amy L. Dalen
Categories
The IRS has provided guidance on Treasury Secretary Steven Mnuchin’s announcement yesterday that a 90 day extension to make tax payments due on April 15th would be available. The guidance, provided in Notice 2020-17, clarifies some of the confusion surrounding the announcement. Here is what we know: The extension applies to any person with a Federal income tax payment due April 15, 2020. This includes 2019 income tax payments, including self-employment taxes, and the first quarter 2020 estimated tax payment. Taxpayers will still be required to file for an extension to file their income tax returns. The April 15th filing deadline has not been extended. All taxpayers are encouraged to file on time if they are able. The extension applies to payments up to $1 million for individuals and $10 million for corporations. Any payments in excess of these thresholds will still need to be paid by the April 15th deadline in order to avoid interest and penalties. The $1 million threshold for individuals applies to taxpayers that file single and married filing jointly. Interest and penalties will be automatically waived. Taxpayers will not need to apply in order to have the interest and penalties waived. Reasonable cause may still allow for a waiver of penalties for payments not covered by the extension. Individuals, trusts, and estates may still request a late payment penalty waiver for reasonable cause. The reasonable cause waiver is not available for corporations or tax-exempt organizations. We encourage you to reach out to your HBK advisor with any questions and concerns, and discuss what this extension may mean for your specific tax situation. We are closely monitoring guidance as it becomes available, and will continue to update you as the need arises.

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2020 Resolution: Date Documents With The Full Year

Date January 21, 2020
Authors Sarah Gaymon, CPA
Categories

As we begin 2020 and many have committed to (and already broken?) New Year‘s resolutions, we recommend one that is easy to keep: when dating documents from now through December 31, use the full “2020” to denote the year, as opposed to just writing/typing “20”.

Doing so will not only generate a sense of accomplishment for keeping at least ONE resolution by year’s end, it may also protect you from potential fraud. Signing documents with an abbreviation (e.g. 1/20/20) may make them more susceptible for manipulation, resulting in a greater risk of the signer falling victim to deceptive practices. Consider the following scenarios:

-You write a personal check to your new boyfriend or girlfriend in the amount of $5,000 on February 14, 2020 as an intended “shopping spree” Valentines Day gift. You date the check 2/14/20. Several month pass –and you realize this is not the person you want to spend the rest of your life with– so you part ways. If the check was not cashed within a reasonable time frame, it would not be honored by your bank so, no big deal. Fast forward to the year 2021 when your ex finds the check and decides to edit the date to 2/14/2021 (by tacking the final two digits onto the end of the date) so the bank will cash the check. Since the bank was unaware that the check was altered, you are now out $5,000 a full year after writing the check.

-You provide your shady landlord, with whom you’ve had several disputes, a document of notice for intent to vacate his property (i.e. You’re finally moving out!). You sign and date the document using the abbreviation 4/25/20. Now, assume the landlord refuses to return your security deposit, so you take him to small claims court. There, the landlord claims you overstayed your lease and remained on the property long after you informed him that you would vacate, which would allow him to retain the good faith deposit you paid in the beginning of your contract with him. He produces the document that you signed, but has altered the date to read 4/25/2019, thus “proving” that you stayed a full year after you told him of your intent to vacate. Assuming you did not keep a copy of the signed document, you will likely have a hard time proving the actual date on which you officially signed the notice. This may end up costing you your deposit, not to mention court costs.

While these scenarios may seem exaggerated, they both highlight how easily documents can be manipulated, especially this year. Clearly, in both scenarios writing out 2020 in reference to the date would have protected these documents and rendered them much harder to change.

The simple addition of a few pen strokes –by writing the full year of 2020 when dating documents– can save you potential headaches, and maybe even considerable money, down the line. Also, it will give you added peace of mind that your documents are secure. This is one New Year’s resolution that is definitely worth keeping.

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