Archive for March 2020

The new COVID-19 law provides businesses with more relief

On March 27, President Trump signed into law another coronavirus (COVID-19) law, which provides extensive relief for businesses and employers. Here are some of the tax-related provisions in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Employee retention credit

The new law provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 crisis.

Employer eligibility. The credit is available to employers with operations that have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers that have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis.

The credit isn’t available to employers receiving Small Business Interruption Loans under the new law.

Wage eligibility. For employers with an average of 100 or fewer full-time employees in 2019, all employee wages are eligible, regardless of whether an employee is furloughed. For employers with more than 100 full-time employees last year, only the wages of furloughed employees or those with reduced hours as a result of closure or reduced gross receipts are eligible for the credit.

No credit is available with respect to an employee for whom the employer claims a Work Opportunity Tax Credit.

The term “wages” includes health benefits and is capped at the first $10,000 paid by an employer to an eligible employee. The credit applies to wages paid after March 12, 2020 and before January 1, 2021.

The IRS has authority to advance payments to eligible employers and to waive penalties for employers who don’t deposit applicable payroll taxes in anticipation of receiving the credit.

Payroll and self-employment tax payment delay

Employers must withhold Social Security taxes from wages paid to employees. Self-employed individuals are subject to self-employment tax.

The CARES Act allows eligible taxpayers to defer paying the employer portion of Social Security taxes through December 31, 2020. Instead, employers can pay 50% of the amounts by December 31, 2021 and the remaining 50% by December 31, 2022.

Self-employed people receive similar relief under the law.

Temporary repeal of taxable income limit for NOLs

Currently, the net operating loss (NOL) deduction is equal to the lesser of 1) the aggregate of the NOL carryovers and NOL carrybacks, or 2) 80% of taxable income computed without regard to the deduction allowed. In other words, NOLs are generally subject to a taxable-income limit and can’t fully offset income.

The CARES Act temporarily removes the taxable income limit to allow an NOL to fully offset income. The new law also modifies the rules related to NOL carrybacks.

Interest expense deduction temporarily increased

The Tax Cuts and Jobs Act (TCJA) generally limited the amount of business interest allowed as a deduction to 30% of adjusted taxable income.

The CARES Act temporarily and retroactively increases the limit on the deductibility of interest expense from 30% to 50% for tax years beginning in 2019 and 2020. There are special rules for partnerships.

Bonus depreciation for qualified improvement property

The TCJA amended the tax code to allow 100% additional first-year bonus depreciation deductions for certain qualified property. The TCJA eliminated definitions for 1) qualified leasehold improvement property, 2) qualified restaurant property, and 3) qualified retail improvement property. It replaced them with one category called qualified improvement property (QIP). A general 15-year recovery period was intended to have been provided for QIP. However, that period failed to be reflected in the language of the TCJA. Therefore, under the TCJA, QIP falls into the 39-year recovery period for nonresidential rental property, making it ineligible for 100% bonus depreciation.

The CARES Act provides a technical correction to the TCJA, and specifically designates QIP as 15-year property for depreciation purposes. This makes QIP eligible for 100% bonus depreciation. The provision is effective for property placed in service after December 31, 2017.

Careful planning required

This article only explains some of the relief available to businesses. Additional relief is provided to individuals. Be aware that other rules and limits may apply to the tax breaks described here. Contact us if you have questions about your situation.

© 2020


On Friday March 27th, 2020 Congress passed a $2 trillion stimulus bill to address the economic crisis caused by the coronavirus pandemic.

The first part of this Act is direct stimulus payments to many taxpayers.  Individuals are eligible for up to $1,200 and couples would receive up to $2,400.  In additional you will receive $500 per child.

But not everyone will receive these stimulus payments. There are phase-out based on Adjusted Gross Income:

Single taxpayer phase out starts at $75,000 of adjusted gross income and reduced by $5 for every additional $100 of adjusted gross income.  Those making more than $99,000 will not receive anything. 

Married taxpayers phase out starts at $150,000 of adjusted gross income and reduced by $5 for every additional $100 of adjusted gross income.  Those couple making more than $198,000 will not receive anything.

Below are the charts giving in $5,000-$10,000 increments. There are also several websites that have an actual calculator. 

Stimulus Checks (Single)
AGI Payment
$75,000 $1,200
$80,000 $950
$85,000 $700
$90,000 $450
$95,000 $200
$99,000+ $0
Stimulus Checks (Married)
AGI Payment
$150,000 $2,400
$160,000 $1,900
$170,000 $1,400
$180,000 $900
$190,000 $400


How do I receive the stimulus payment?

If you have already filed your 2019 income tax returns, the IRS will base the adjusted gross income off of 2019.  If not, do not worry; they will base off your 2018 tax return adjusted gross income.

The payments will be made between now and December 31, 2020.  If you have provided direct deposit information on your return, it will be direct deposited.

As you prepare your 2020 tax return, you will have to recalculate the amount you were actually owed based on 2020 tax data.  If the advanced payment was less than what you are owed in 2020 the excess will be treated as a credit on 2020 tax return.  In reverse if your 2020 adjusted gross income is greater than 2018 or 2019, you will have to add the amount to your 2020 tax liability. 


  • The CARES ACT adds $600 per week from the federal government on top of whatever base amount a worker receives from the state. This boost will last 4 months.
  • Added 13 weeks of unemployment insurance. Those nearing the maximum number of weeks allowed by their state will receive an extension.  New filers would also be allowed the collect for a longer period of time.
  • Self-employed individuals, freelancers and independent contractors are included through the end of this year.


  • Employers can provide up to $5,250 in tax-free student loan repayment benefits
  • All loan and interest payments are deferred through September 30th, 2020 without penalty on all federally owned student loans.


The CARE Act included $350 billion in loans for companies with 500 employees or fewer.  This includes non-profit, self-employed people as well as hotel and restaurant chains with up to 500 workers per location.

Cash Assistance:

These are loans to cover payroll, rent, and other expenses.  That can be a forgivable loan if you meet the criteria. 

The covered period is February 15, 2020 through June 30, 2020.  These “paycheck protection loans” are limited to the LESSER of:

Sum of the average monthly “payroll costs” for 1 year period ending on the date the loan was made or 10 million.  “Payroll costs” include:

  • Wages, commissions, salary, or similar compensation to an employee or independent contractor
  • Payment of a cash tip or equivalent
  • Allowance for dismissal or separation
  • Payment for group health care benefits (includes premiums)
  • Payment of any retirement benefits
  • Payment of state or local tax assessed on the compensation of employees

 Payroll costs DO NOT include:

  • Payroll taxes
  • Compensation for employees whose principal residence is outside the U.S.
  • Qualified sick-leave or family medical leave for which a credit is allowed

These loans will have a maximum maturity of 10 years and the rate of interest will not exceed 4%.  Proceeds may be used to cover payroll, mortgage payments, rent, utilities, and other debt service requirements.  The standard fees imposed under Section 7 of the Small Business Act are waived.  There is NO personal guarantee required by the business owner.


In a separate section of the CARES Act, a portion of the “paycheck protection loans” are to be forgiven on a tax-free basis if you meet the criteria.

The amount to be forgiven is the sum of the following payments made by the borrower during the 8-week period beginning on the date of the loan:

  • Payroll costs (which we defined above)
  • Mortgage interest
  • Rent
  • Certain utility payments

There may be a reduction in the amount that is forgiven due to reducing the workforce during the 8-week period when compared to either 2019 or 2020; or reduction in salary or wages paid to an employee who has earned less than $100k in annual salary by more than 25% during that covered period.

The small business can avoid this reduction if they rehire or increase the employee’s pay within the allotted time period.


The Act expanded access to Economic Injury Disaster Loans under Section 7(b)(2) of the Small Business Act.  This program provides small businesses with working capital of up to $2 million to help overcome the temporary loss of revenue they are experiencing.  This is administered through the S.B.A. (U.S. Small Business Administration).

This loan does not include payroll costs.


The operation of the business was fully or partially suspended during any quarter during 2020 due to order from an appropriate government authority resulting from COVID-19, or

The business remained open, but during any quarter in 2020, gross receipts for that quarter were less than 50% of what they were for the same quarter in 2019.  The business will be entitled to a credit for each quarter, until the business has a quarter where it’s recovered.  The receipts exceed 80% of what there were for the same quarter in the prior year.

The refundable credit is applicable for all wages paid between March 12th, 2020 and before January 1, 2021.  The credit will be computed on a quarterly basis and equals 50% of qualified wages including health benefits, up to $10,000 paid to each employee ($5,000 in actual credit). 

NOTE: If the employer takes out a “payroll projection loan” no employee retention credit will be available.


For the period March 27, 2020 and ending before January 1, 2021, an employer may elect to defer the payment of the employer portion of Social Security-6.2%.

Similarly, a self-employed taxpayer can defer paying 50% of their social security as well.

The amount deferred is to be paid back as follows:

  • 50% on December 31, 2021
  • 50% on December 31, 2022

NOTE:  Employers and self-employed individuals cannot use this delay of payment if they have taken out a “payroll protection loan”.


A taxpayer is allowed to take a “coronavirus related distribution” of up to $100,000 in the year 2020 and there will be no penalty.

The definition of “coronavirus related distribution”:

  • Individual who is diagnosed with SRS-COV-2 or COVID-10 by an approved test through the CDC
  • Spouse or dependent is diagnosed with one of the 2 diseases
  • Individual or family who experience adverse financial consequences as a result of being quarantined, furloughed, or paid off. It also includes having your work hours reduced, or being unable to work due to lack of child care.

The income tax due on this distribution can be spread over a 3-year period beginning with 2020.  The taxpayer can also choose to pay back the distribution over the 3 year period and avoid any tax consequences.


The CARES Act allows an individual to make a cash contribution of up to $300 and deduct the contribution “above the line” in computing their adjusted gross income.  Thus, if a taxpayer does not itemize, they are able to deduct up to $300 above the line.

 The CARES Act has many components to assist business owners.  Please contact our office if you are needing to determine which fits your business the best.  My staff and I are here to help!

On a personal note it is wonderful to see your posts on Facebook and Instagram.  Parents and children spending quality time together.   Sometimes we get lost in all the hustle and bustle.  This pandemic has provided a time to step back and appreciate what we have.

We will get through this together!


Installment Agreements Suspended

Earlier today, IRS rolled out additional information on its operations, entitled the People First Initiative. While the document is fairly dense, here is what we see as the most salient features for enrolled agents:

  • Installment agreements: Payments due between April 1 and July 15 for taxpayers under existing installment agreements are suspended. Taxpayers may enter into new installment agreements.
  • Offers in Compromise (OIC)
    • Pending OIC applications will have until July 15 to provide additional supporting information.
    • Payments on accepted OICs may be suspended until July 15.
    • IRS will not default an OIC for taxpayers delinquent in TY18 filing.
  • Liens and levies initiated by field revenue officers will generally be suspended and new automated liens and levies are suspended.
  • Generally, IRS will not initiate new field, office, and correspondence audits.
  • Earned income tax credit and wage verification reviews have until July 15.
  • Appeals will continue to hear appeals over the telephone or by video conferencing.
  • IRS will continue to take steps where necessary to protect all applicable statutes of limitations.

Providing peace of mind and financial security for Missouri workers and families moving forward as we combat COVID-19 is a top priority for Governor Parson. The Department of Revenue has contributed to our state’s response by easing the burden and short-term uncertainty facing our state.

Mirroring the federal guidance issued by the Internal Revenue Service (IRS), the Missouri Department of Revenue (DOR) will provide special filing and payment relief to individuals and corporations:

  • Filing deadline extended: The deadline to file income tax returns has been extended from April 15, 2020, to July 15, 2020.
  • Payment relief for individuals and corporations: Income tax payment deadlines for individual and corporate income returns with a due date of April 15, 2020, are extended until July 15, 2020. This payment relief applies to all individual income tax returns, income tax returns filed by C Corporations, and income tax returns filed by trusts or estates. The Department of Revenue will automatically provide this relief, so filers do not need to take any additional steps to qualify.
  • This relief for individuals and corporations will also include estimated tax payments for tax year 2020 that are due on April 15, 2020.
  • Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. Individuals and corporations that file their return or request an extension of time to file by July 15, 2020, will automatically avoid interest and penalties on the tax paid by July 15.

To alleviate public congestion in local license offices, DOR has implemented automatic extensions for expiring driver licenses and motor vehicle registrations. These extensions are effective immediately:

  • Vehicle owners with registrations or license plates expiring in March and April have been granted an automatic two-month extension. Owners will be able to continue operating their vehicles on Missouri roadways without penalty until they can apply for renewal.
  • The time frame in which a vehicle safety and emission inspection is valid for March and April license plate expirations has also been extended an additional 60 days. Applicants for title will not be assessed a late title penalty when visiting a license office, effective immediately; this waiver will continue through April 30, 2020.

Valid Missouri driver licenses, nondriver licenses and noncommercial instruction permits with original expiration dates of March 1, 2020, through April 30, 2020, have been granted an automatic 60-day extension:

The approved extension does not waive the mandatory retesting requirement for persons who have allowed their license to expire for more than 184 days. Also, individuals who were provided notice to complete additional testing as part of a medical review program requirement may be granted an additional 60 days to comply with such requirements.

Wamhoff Accounting Services Reduced Hours Notice

Wamhoff Accounting Services is committed to keeping our employees and clients healthy and safe.

Effective Monday March 23rd we are working reduced hours:

M-F 9 am to 5 pm

Closed Saturday March 28th

Saturday April 4th and 11th 8 am to 4 pm

If you are unable to gather and send in your tax information, please let us know and we can contact you after this quarantine.  With both Federal and Missouri extending the due date of the tax return as well as any balances due and first quarter estimated tax payments, you can assure no late penalties or interest.

Stay healthy and be safe.

Sandy Furuya, President

Wamhoff Accounting Services


Taxpayers now have more time to file their tax returns and pay any tax owed because of the coronavirus (COVID-19) pandemic. The Treasury Department and IRS announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.

Taxpayers can also defer making federal income tax payments, which are due on April 15, 2020, until July 15, 2020, without penalties and interest, regardless of the amount they owe. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. They can also defer their initial quarterly estimated federal income tax payments for the 2020 tax year (including any self-employment tax) from the normal April 15 deadline until July 15.

No forms to file

Taxpayers don’t need to file any additional forms to qualify for the automatic federal tax filing and payment relief to July 15. However, individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868. Businesses who need additional time must file Form 7004. Contact us if you need assistance filing these forms.

If you expect a refund

Of course, not everybody will owe the IRS when they file their 2019 tax returns. If you’re due a refund, you should file as soon as possible. The IRS has stated that despite the COVID-19 outbreak, most tax refunds are still being issued within 21 days.

New law passes, another on the way

On March 18, 2020, President Trump signed the “Families First Coronavirus Response Act,” which provides a wide variety of relief related to COVID-19. It includes free testing, waivers and modifications of Federal nutrition programs, employment-related protections and benefits, health programs and insurance coverage requirements, and related employer tax credits and tax exemptions.

If you’re an employee, you may be eligible for paid sick leave for COVID-19 related reasons. Here are the specifics, according to the IRS:

  • An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or whose child care provider is unavailable, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay.
  • An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee’s pay.

As of this writing, Congress was working on passing another bill that would provide additional relief, including checks that would be sent to Americans under certain income thresholds. We will keep you updated about any developments. In the meantime, please contact us with any questions or concerns about your tax or financial situation.

© 2020


Coronavirus (COVID-19): Tax relief for small businesses

Businesses across the country are being affected by the coronavirus (COVID-19). Fortunately, Congress recently passed a law that provides at least some relief. In a separate development, the IRS has issued guidance allowing taxpayers to defer any amount of federal income tax payments due on April 15, 2020, until July 15, 2020, without penalties or interest.

New law

On March 18, the Senate passed the House’s coronavirus bill, the Families First Coronavirus Response Act. President Trump signed the bill that day. It includes:

  • Paid leave benefits to employees,
  • Tax credits for employers and self-employed taxpayers, and
  • FICA tax relief for employers.

Tax filing and payment extension

In Notice 2020-18, the IRS provides relief for taxpayers with a federal income tax payment due April 15, 2020. The due date for making federal income tax payments usually due April 15, 2020 is postponed to July 15, 2020.

Important: The IRS announced that the 2019 income tax filing deadline will be moved to July 15, 2020 from April 15, 2020, because of COVID-19.

Treasury Department Secretary Steven Mnuchin announced on Twitter, “we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”

Previously, the U.S. Treasury Department and the IRS had announced that taxpayers could defer making income tax payments for 2019 and estimated income tax payments for 2020 due April 15 (up to certain amounts) until July 15, 2020. Later, the federal government stated that you also don’t have to file a return by April 15.

Of course, if you’re due a tax refund, you probably want to file as soon as possible so you can receive the refund money. And you can still get an automatic filing extension, to October 15, by filing IRS Form 4868. Contact us with any questions you have about filing your return.

Any amount can be deferred

In Notice 2020-18, the IRS stated: “There is no limitation on the amount of the payment that may be postponed.” (Previously, the IRS had announced dollar limits on the tax deferrals but then made a new announcement on March 21 that taxpayers can postpone payments “regardless of the amount owed.”)

In Notice 2020-18, the due date is postponed only for federal income tax payments for 2019 normally due on April 15, 2020 and federal estimated income tax payments (including estimated payments on self-employment income) due on April 15, 2020 for the 2020 tax year.

As of this writing, the IRS hasn’t provided a payment extension for the payment or deposit of other types of federal tax (including payroll taxes and excise taxes).

Contact us

This only outlines the basics of the federal tax relief available at the time this was written. New details are coming out daily. Be aware that many states have also announced tax relief related to COVID-19. And Congress is working on more legislation that will provide additional relief, including sending checks to people under a certain income threshold and providing relief to various industries and small businesses.

We’ll keep you updated. In the meantime, contact us with any questions you have about your situation.

© 2020