Here’s What Could Happen If You Try to Short-Change the IRS
Some refer to it as “creative accounting” or just “a little fudging here and there,” but if your tax return is missing some income that should have been reported or includes overstated deductions, regardless of whether you prepared your own return or had it prepared, you are the one who is ultimately responsible. If you get caught, there can be very unpleasant consequences – including substantial monetary penalties and the possibility of jail time for blatant cases.
COVID-19 has had an unprecedented impact on all aspects of American businesses, but perhaps none have been as severely affected as small business owners. Surviving this disaster will require more than just time: you will need to take a pragmatic view of what has happened and what steps you are willing and able to take in order to bounce back. Here are our suggestions:
If you had filed either your 2019 or 2018 return before the direct deposits were issued, you should already have the money in the bank, UNLESS: Watch the video for details.
In the face of the global pandemic and the subsequent economic crisis it has spurred, the federal government has taken several steps to protect small business owners. One of the most notable of these steps is the offering of Paycheck Protection Program (PPP) loans, which are being trumpeted as forgivable loans. Though the loans are indeed forgivable, the requirements for forgiveness are not as broad as many borrowers originally thought.
You may be one of the many taxpayers eligible for a refund from their 2018 tax return. Last December, tacked on to an Appropriations Act, Congress passed the long-awaited extenders bill. This bill had been lingering in Congress for about 2 years and extended several beneficial tax provisions that had expired after 2017. As a result, these provisions were retroactively extended to 2018 and most are continued through 2020. This opens the door to amending your 2018 return for a refund if any of the following provisions apply to you. Here are the retroactive tax benefits:
The tax code offers two types of IRAs; one is referred to as the traditional individual retirement account (IRA), so named because it was the first type of IRA available, having been created by Congress back in the 1970s. The second type is the Roth IRA, established in 1997 and named after William Roth, who was a senator from Delaware. Which one is best for you?
As of Tuesday, April 21st, the Senate has passed the Paycheck Protection Program and Health Care Enhancement Act (PPP & HCE Act), a $484 billion package which will now go to the House of Representatives for consideration. It is anticipated that this bill could pass the House as early as Thursday, and President Trump is expected to sign it into law soon after.
The IRS has finally started making those much anticipated Economic Impact Payments, aka “Recovery Rebates.” However, not everyone who was expecting one has received theirs, and some may not be the amount expected.
To encourage charitable contributions to deserving qualified charities during these trying times, Congress has relaxed some of its restrictions related to how much a taxpayer can deduct as a charitable contribution in any given year.
On April 9, 2020, the Federal Reserve announced it would be taking additional steps to support the US economy by providing up to $2.3 trillion in loans, including through the creation of a Main Street Lending Program. This program will support main street businesses by providing financing to lenders that make direct loans to these small to medium-sized companies.