GEORGE JOHNSON & COMPANY
Dear Clients and Friends,
- GJC’s Response to COVID-19 – Office Update
- CARES Act and Employee Benefit Plans
- Coronavirus Strikes Nonprofits
- COVID-19 Federal Aid Package
On April 9, 2020, the IRS issued Notice 2020-23, which contains expanded relief for those tax forms and other filings that are postponed as was originally announced last month. See the IRS Coronavirus website for more details.
First, the payments and returns eligible for relief are expanded. Any tax return or payment due on or after April 1, 2020, and before July 15, 2020, is now automatically postponed to July 15, 2020-no extension forms, letters, or other forms of documentation or communication are required to make use of this relief. This will now cover, for example, calendar-year 2020 second quarter estimated tax payments, among other things. If an Affected Taxpayer as defined by the notice needs additional time to file, such taxpayer may choose to file the appropriate extension form by July 15, 2020, to obtain a filing extension.
Prior to 2018, partnerships were generally subject to unified partnership audit and litigation rules enacted by the Tax Equity and Fiscal Responsibility Act of 1982, commonly referred to as the TEFRA partnership procedures.
For taxable years beginning after December 31, 2017, the Bipartisan Budget Act of 2015 (BBA) replaced the TEFRA audit procedures with a centralized partnership audit regime. These new audit procedures apply to all partnerships, unless the partnership makes a valid election not to have those procedures apply. Partnerships subject to the centralized partnership audit regime are referred to as BBA partnerships.
On March 20, 2020, the Internal Revenue Service released Notice 2020-18, its second round of formal guidance – this time expanding its earlier guidance (Notice 2020-17) by including relief to taxpayers for both federal income tax returns and federal income tax payments which would be due April 15, 2020. Notice 2020-18 is available here. Notice 2020-17 is superseded by Notice 2020-18.
Under the expanded guidance, the President’s March 13, 2020, Emergency Declaration instructs the Treasury Secretary to provide relief to taxpayers affected by the novel coronavirus (COVID-19). The notice provides that any person with a federal income tax return or federal income tax payment due April 15, 2020, is an “Affected Taxpayer.” Any such person includes an individual, trust, estate, partnership, association, company, or corporation. For Affected Taxpayers, the relief provides that federal income tax returns or federal income tax payments that would ordinarily be due April 15, 2020, are postponed until July 15, 2020.
- The old age, survivors, and disability insurance (OASDI) portion of the social security tax is imposed on employee compensation and self-employment income, except that this tax is imposed only to the extent of the maximum wage base set by the Social Security Administration ($132,900 for 2019 and $137,700 for 2020).
- The OASDI program is funded by contributions from employees and employers through FICA tax, which is based on 6.2% of the employee’s gross pay. Both employees and employers contribute equal amounts. Self-employed business owners also pay a similar tax, called SECA (or self-employment tax), based on 12.4% of the net income of their businesses.
Congratulations to Peter Walkuski for passing the CPA exam!
Tiera Taylor was hired under our HBCU (Historically Black Colleges and Universities) Legacy Internship Program. She graduated from Florida Agricultural & Mechanical University (FAMU) with a Bachelor of Science in Business Administration. Tiera anticipates graduating in May 2020.
GJC is an Independent Member of the BDO Alliance USA