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Posts tagged Taxes.
Tax Implications of PPP Loan Forgiveness

Paycheck Protection Program (PPP) loans taken out in connection with the coronavirus (COVID-19) crisis that were subsequently forgiven raise a number of tax questions. A PPP loan may be forgiven in an amount equal to the sum of: (1) payroll costs; (2) interest (but not principal) payments on covered mortgage obligations (for mortgages before February 15, 2020); (3) any payment for any covered rent obligation (for leases beginning before February 15, 2020); (4) covered utility payments (for utilities that were turned on before February 15, 2020), during the covered period.

IRS Releases Instructions to Form 941 Expanding on Prior Guidance on Deferral of Social Security Tax

On October 1, 2020, the IRS released instructions for Form 941 providing additional guidelines for reporting deferred Social Security taxes pursuant to the President's Memorandum (discussed previously on our blog) and IRS Notice 2020-65

Background

On August 8, 2020, the Presidential Memorandum directed the Secretary of the Treasury to use his authority pursuant to section 7508A of the Internal Revenue Code to defer the withholding, deposit, and payment of certain payroll tax obligations.

IRS Guidance - President's Memorandum Deferring Payroll Tax Obligations for Four Months

On August 8, 2020, President Trump signed a Presidential Memorandum directing the Treasury Department to defer the employee's portion of Social Security taxes due to the COVID-19 pandemic for wages paid from September 1, 2020 through December 31, 2020 (see our blog). The deferral applies only for wages less than $4,000 for any bi-weekly period, or the equivalent any other pay period.

President's Memorandum to the Secretary of Treasury Defers Payroll Tax Obligations for Four Months

On August 8, President Donald J. Trump, signed the memorandum (the President’s Memorandum) directing the Secretary of Treasury to defer the withholding, deposit, and payment of the 6.2 percent payroll tax during the period of September 1, 2020 through December 31, 2020 for wages less than $4,000 during any bi-weekly pay period (i.e., $104,000 annually) on a pre-tax basis. The Department of the Treasury is expected to provide additional guidance later in August.

Opportunity Funds are Knocking: Let them in and Learn How They Can Work for You - What Are the Tax Incentives and What Investors Need to Know

This is the second post in a series of articles wherein we will dive into the new “Opportunity Fund” program. In our first post, we described the general framework for the new Opportunity Fund program which you can find here

There are three tax benefits that investors in an Opportunity Fund can take advantage of, (i) deferral of gain from the sale of property, (ii) partial forgiveness of this gain, and most importantly, (iii) tax-free appreciation in the investment in an Opportunity Fund.

Gain Deferral

The first thing a taxpayer must do to take advantage of the first tax benefit is to invest the gain from the sale of property into an Opportunity Fund within 180 days of the sale.

July 2017
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Tags Taxes
Selling Your Business? Unadvised Asset Allocation Can Leave You Paying Unnecessary Taxes

Purchase price allocation and timing of payments are two of the issues to consider when structuring an asset sale or purchase of a business. The tax consequences can be enormous if assets aren’t allocated strategically.

Consider this scenario based on an actual client. John is an entrepreneur who starts a roofing company. John works very hard and builds up his business over the next seven years so that it is generating $500,000 per year. John is approached by a national roofing company that wants to purchase his business for $1,000,000, plus an earn out of $500,000 for the next 12 months and a promise that John will not compete with the sold business.