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CS&L in the News
June 26, 2020
The IRS recently announced in Notice 2020-51 that taxpayers who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now have the opportunity to roll those funds back into a retirement account by August 31, 2020. The IRS has provided guidance on rollover opportunities, answers to frequently asked questions, and sample plan amendments for plan administers following the Coronavirus Aid, Relief, and Economic Security (CARES) Act RMD waiver for 2020.
RMD rules. The CARES Act waives all RMDs for 2020, regardless of whether the taxpayer has been impacted by the pandemic. The waiver under the CARES ACT applies for calendar year 2020 to defined contribution plans, certain annuity plans, and traditional or Roth IRAs (the waiver does not apply to defined-benefit plans). The waiver allows seniors to hold on to their plan assets when they might otherwise have to sell at market lows. There may be an additional benefit of the waiver for taxpayers who turned 70 ½ in 2019 and did not take their first required distribution in 2019. For those individuals who chose to wait until April 1, 2020 and had not yet taken the distribution at the time legislation was passed, they can waive both the 2019 and 2020 RMDs.
The required minimum distribution (RMD) rules prevent taxpayers from extending the tax benefit for retirement savings indefinitely. In general, a minimum required distribution must be made for the later of the year in which the participant turns 70 1/2 (or 72, if they have not reached 70 1/2 before 2020) or retires, and for every year thereafter. The required beginning date cannot be delayed until retirement if the participant is a five-percent owner of the employer, or if the account is an IRA. The distribution for the first year can be made as late as April 1 of the following year. For other years, the required distribution must be made during the calendar year.
Transition guidance. The IRS provided guidance in Notice 2020-51 on three items:
Rollover guidance. The IRS is providing relief to allow taxpayers who receive certain distributions to roll them into an eligible retirement plan. This applies to distributions received in 2020 and in 2021 for employee with a required beginning date of April 1, 2021.
Permitted repayments of distributions previously received. An IRA owner or beneficiary who has already received distributions from an IRA of an amount that would have been an RMD in 2020, the participant can repay the distribution to the IRA by August 31, 2020. This repayment is not subject to the one rollover per 12-month period limitation and the restriction on rollovers for inherited IRAs.
Plan amendments. Two sample plan amendments are provided for employers to adopt to give to plan participants and beneficiaries whose RMDs are waived. Plan amendments must be adopted no later than January 1, 2022.
If you would like more information on the rollover and repayments of RMDs in 2020, and how this affects your personal tax situation, please call our office. We are here to assist you.
As you are aware, the Treasury Department and the Internal Revenue Service (IRS) have announced special Federal income tax return filing and payment relief in response to the ongoing Coronavirus Disease 2019 (COVID-19) emergency. The due date is automatically extended from April 15, 2020, to July 15, 2020, without penalties and interest regardless of the amount owed. Any person with a Federal income tax return or payment due on April 15, 2020, is eligible for relief.
This includes any type of taxpayer, such as an individual, a trust, an estate, a corporation, or any type of unincorporated business entity. This relief also applies to gift tax or generation-skipping transfer tax payments due or the requirement to file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return on April 15, 2020.
The payment due refers to both 2019 Federal income tax payments (including payments of tax on self-employment income) and 2020 estimated Federal income tax payments (including payments of tax on self-employment income), regardless of the amount owed. The return or payment must be due on April 15, 2020 - this relief does not apply to Federal income tax returns and payments due on any other date.
Taxpayers do not have to be sick, or quarantined, or have any other impact from COVID-19 to qualify for relief. Also, taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.
You do not need to call our offices to inquire as to your extension. We are working through the information you’ve submitted (if you have sent us your material) and are trying our best to complete your tax returns as quickly as possible. We will reach out to you if we are missing items or if you have a deadline (for example a State or City tax return) that has not been automatically extended. If you have not provided us with your material, please send it in as soon as you are able. The preferred method at this time is for you to provide your documents electronically via our Sharefile portal or via mail. To access the portal visit our website at www.cslcpa.com and click on the “Sharefile” tab at the top of the page.
Thank you for your patience during this unusual and stressful time. We too have been impacted by requiring a remote work environment, and many of our wonderful staff are impacted by the requirement to educate their children from home during the day. These conditions have resulted in a significant reduction in work efficiencies and an increase to the time required to complete your tax returns. We applaud our staff for their dedication to continue to work through these very adverse times on our client’s behalf.
On March 25, the Senate passed a $2 trillion emergency aid proposal to stimulate the US Economy in the midst of the Coronavirus pandemic. The House is scheduled to vote on the bill Friday, and then it will go to President Donald Trump, who is expected to sign it. This legislation, H. R. 748, ‘‘Coronavirus Aid, Relief, and Economic Security (CARES) Act,” aka the “Phase 3” bill, provides significant tax and non-tax stimulus to individuals and businesses. Click here to download a brief summary of key provisions.
On March 24, 2020, the IRS released frequently asked questions (FAQ) pertaining to Notice 2020-18, which extends Tax Day to July 15, 2020. One of the items we mentioned in our March 22, 2020 Email correspondence was clarified and not the result we anticipated.
Excess elective deferrals in 2019 to a workplace-based retirement plan must be withdrawn from the plan no later than April 15, 2020, in order to exclude the distributions from income. This date was not extended as a result of the Notice 2020-18 tax relief.
The IRS has confirmed that 2019 contributions to IRA and HSA accounts will be extended to July 15, 2020 as a result of the Notice 2020-18 tax relief.
The FAQ website is a good resource for specific questions you may have can be found here:
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 in Notice 2020-18.
Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. 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.
Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Information can be found at the IRS website www.irs.gov/coronavirus.
We are committed to providing you with the best service possible in preparing your tax returns/extensions, and will continue to work hard to get tax returns completed and filed as quickly as possible for you. Please continue to send us your tax material. We appreciate your efforts to assist us in doing so timely, understanding that each of you will be impacted differently and have different priorities.
How Can CS&L Help
We are still here to help. Although our physical offices are closed to help do our part to slow the spread of COVID-19 (see correspondence dated March 20, 2020 or visit our web site), we are still open and working remotely and available to help navigate the changing rules for you personally and your business. The health and safety of our employees and clients is paramount and CS&L, CPAs has been taking enhanced precautions concerning the spread of COVID-19. If any major changes occur, we will update you with details. Thank you for your business. We wish you and your family good health. If you have any questions or further concerns, please do not hesitate to contact one of our offices.
Questions & Answers
What tax payments are deferred until July 15, 2020?
Federal income tax payments (including self-employment tax) due on April 15 are being automatically extended until July 15, 2020, for any amount due (no longer limited). Taxes due for the 2019 taxable year and the 1st quarter estimated tax payment for 2020 are included in this relief.
The second quarter estimated tax payment due June 15, 2020, has not been deferred at this time.
Are Individual Retirement Account (IRA) and/or Health Savings Account (HSA) contributions for 2019 now due on July 15, 2020?
The rules state that IRA/HSA contributions for 2019 need to be made by the due date for filing the return for that year (not including extensions) which is now July 15, 2020. The IRS’s guidance implies this, but the agency hasn’t yet made it explicit. The July 15th date should also apply to withdrawals of excess contributions made for 2019. If the IRS later states a different date, we will inform you.
Can my return be e-filed without submitting payment?
Yes, and we encourage you to return the signed Form 8879 to us as soon as possible. We can file the returns as soon as possible, and payment of the tax can be made by check with a voucher form any time before July 15, 2020.
What if my return will not be ready to file by July 15, 2020?
An extension of time can be filed by July 15, 2020 to extend the deadline to October 15, 2020 for individuals and C Corporations, and to September 30, 2020 for fiduciaries).
What if I don’t pay by July 15, 2020?
After July 15, penalties and interest will begin to accrue on any remaining unpaid balances.
CS&L has already e-filed my tax return, and payment of tax was set for auto-debit (withdrawal) on April 15, 2020. Will the withdrawal(s) now be on July 15, 2020?
NO! If returns have already been e-filed, the payment date of April 15, 2020 will not change. In order to change this date, you must call the IRS e-file Payment Services 24/7 at 1-888-353-4537 to inquire about or cancel your payment, but please wait 7 to 10 days after your return was accepted before calling. Cancellation requests must be received no later than 11:59 p.m. ET two business days prior to the scheduled payment date.
You will need to send your payment with a voucher, so please contact our office if you need a voucher or assistance with cancelling a payment.
Does this relief apply to other types of taxes?
The relief provided by the IRS does not apply to state income taxes, payroll or excise taxes, or any other Federal tax.
Please see our correspondence dated March 20, 2020, for an update to our office closures and remote working. We are committed to providing you with the best service possible in preparing your tax returns/extensions. The health and safety of our employees and clients is paramount and CS&L, CPAs has been taking enhanced precautions concerning the spread of COVID-19. If any major changes occur, we will update you with details. Thank you for your business. We wish you and your family good health. If you have any questions or further concerns, please do not hesitate to contact one of our offices.
Hurricane Irma: Business Interruption Insurance Claims and Disaster Advisory Services
September 22, 2017
On behalf of the firm, we hope that your family and businesses experienced minimal damage and disruption from Hurricane Irma. While the storm created challenges and hardships for many, we are grateful that the worst-case scenario for our region did not transpire.
Hurricane Irma Office Closure Notice for September 8, 2017
September 8, 2017
IMPORTANT CLIENT ALERT:
Please be advised that due to the potential impacts of Hurricane Irma, all three CS&L CPAs office locations (Bradenton, Sarasota and Tampa) will be closing at noon on Friday, September 8, 2017.
CS&L CPAs Recognized Among 2017 Best Firms for Leadership Equity
June 6, 2017
The CPA profession is doing better than it ever has to advance women, but women still comprise only 23% of partners and principals. That’s a challenge for succession planning, growth and workload management.