For years, you’ve trusted BKM Sowan Horan to provide tax and accounting services and expert guidance. As in previous years, we are providing you with a software solution that simplifies tax time and reduces your tax season stress. The solution is called TaxCaddy.

TaxCaddy makes it easier for you to gather and submit your 1040 tax documents securely, communicate with your tax professional, answer your electronic questionnaire, and electronically sign documents such as your e-file authorization.

Here’s what you can expect (starting now):

• Electronic submission of tax documents by taking pictures with the TaxCaddy mobile app, uploading files, or manually entering information.
• Linking of your financial institution’s tax documents for automatic upload to your Tax Caddy account (optional)
• Organization of tax documents. Your account will list everything that you provided in your prior-year return so you can keep track of what you still need to submit.
• One place that houses all your tax returns and associated documents for years to come.
• Direct contact with your BKM Sowan Horan tax professional through TaxCaddy’s messaging features.

Here’s How to Get Started

1. Connect – You have already received an invitation to create your TaxCaddy account. Log in to your TaxCaddy account, navigate to the Overview screen, and click the Accept Connection button to establish a connection with BKM Sowan Horan.

2. Add Authorized Users – To provide access to your spouse or others, click your name in the top right corner and then Settings. Click Additional User Account and enter their information. They will receive an invitation email to create a linked account with the same steps you have already completed.

3. Download & Use the TaxCaddy Mobile App – The TaxCaddy mobile app can be downloaded from the iTunes App Store or Google Play. It provides a convenient way to access your information and communicate with us directly from your mobile phone.

4. Provide Your Tax Information – In your TaxCaddy account you’ll find a Tax Questionnaire and a Document Request List. PROVIDE DOCUMENTS BY:

• Setting up “Smart Links” with your financial institutions to automatically retrieve tax documents. As documents become available, they will be automatically retrieved and placed in your TaxCaddy account.
• Photo scanning the document with the TaxCaddy mobile app.
• Uploading files.
• Manually entering form information.

5. Complete the Questionnaire – Provide answers to the Questionnaire by navigating to the TaxCaddy Questionnaire.

6. Request Support – If you have questions about TaxCaddy, call your BKM Sowan Horan tax professional. If you have technical questions about your TaxCaddy account or you’re experiencing trouble accessing your account (e.g., if you forgot your password), the TaxCaddy support team is just an email away.

Hope you’re having a great Wednesday! We’ve received some good news over the last couple of days. First, President Biden signed an extension for the deadline to file for the Paycheck Protection Program. The deadline to apply for a loan under the program was set to expire today, March 31, but the new law extends the application deadline to May 31. It gives the Small Business Administration (SBA) until June 30 to process the applications.

In addition, the SBA announced on Tuesday that restaurants applying for grants under the Restaurant Revitalization Fund (RRF) do not need to register for a DUNS number, nor do they need to register on SAM.gov, the System for Award Management process that is normally required to apply for federal grants. This should make applying for an RRF grant more efficient and eliminate a layer of red tape.

Please contact George Stephens at BKM Sowan Horan or other team members with any questions.

The SBA expects an early April roll-out

The Food & Beverage industry had to make a sharp pivot to try and stay in business during the pandemic. In addition to the shelter-in-place orders, the necessary accommodations these business owners had to make were unexpected (burdensome) expenses. Last year, the National Restaurant Association pushed Congress to create a specific recovery fund due to the unique challenges restaurants faced. As a result, The American Rescue Plan Act of 2021 (ARPA) established a $28.6B Restaurant Revitalization Fund (RRF), and $5B is reserved for businesses with gross receipts of $500,000 or less in 2019.

Are you eligible?

The RRF is intended for these entities:

This includes all airport locations. In addition, licensed facilities or premises of a beverage alcohol producer are eligible (where the public may taste, sample, or purchase products or other similar places of business in which the public or patrons assemble for the primary purpose of being served food or drink). Application for the Grant must include certifications that 1) uncertainty of current economic conditions makes necessary the grant request to support ongoing operations, and 2) the applicant has not applied for nor received a Shuttered Venues Operations Grant (SVOG). Publicly traded companies are ineligible.

How much is the Grant?

Assuming the business was in operation in all of 2020 and 2019, you would calculate the eligible Grant by deducting the 2020 gross receipts from 2019 gross receipts subtracting any amounts received under a first or second draw PPP loan. If the business started in 2019 or 2020, there are formulas for calculating the amount of Grant eligible. The Grant is limited to $5 million per location or $10 million in total, including affiliated businesses.

What can I use the Grant for?

The funds can be applied toward:

How do I apply?

During the initial 21-day period, the SBA will prioritize grants to entities owned and controlled by women, veterans, or socially or economically disadvantaged small business concerns. Applicants should ensure they have a DUNS number and register with the System for Award Management (SAM), as these will be required to apply for the Grant. The SBA recently said the grant application period would open in early April. It is required to open within 60 days of the ARPA becoming law, therefore by May 9th at the latest. While not yet clear, we expect that expenses used in PPP loan forgiveness and Employee Retention Credit, and other credits will not be eligible for grant purposes.

Are there any strings attached?

The grants are non-taxable. Federal grants of more than $750,000 typically come with a Single Audit Act audit requirement. We recommend that Grant recipients establish an internal controls environment to track RRF grant expenditures in anticipation of an audit.

Please contact George Stephens at BKM Sowan Horan or other team members with any questions.

GOAL TO IMPROVE ACCURACY

The IRS recently released a revised draft of Form W-4 for the 2020filing season. The changes are aimed at improving the accuracy of amounts withheld from employees’ paychecks so that there are fewer surprises when employees file their tax returns next Spring.

UNEXPECTED TAX FILING RESULTS

Given all the changes implemented by the Tax Cuts and Jobs Act(TCJA), many taxpayers were surprised this past filing season their refunds were larger or smaller than they anticipated, with the someowing tax they were not prepared to pay.

Although not required, the IRS is encouraging “paycheck checkups” for taxpayers, to ensure the correct amount of tax is being withheld from their paychecks for the remainder of 2019 and going forward.

EXAMPLE OF CHANGES

One of the changes allows taxpayers with multiple jobs or dual MFJincome in the household to check a single box for their amount of withholding. With this option, taxpayers should generally have enough withheld (possibly more than necessary).

NEW METHODS FOR CALCULATING WITHHOLDING

Beginning in 2020 and coinciding with the new Form W-4, three new methods will be available to calculate how much to withhold based on the employee’s wages and Form W-4:

(1)Employer Steps to Figure Federal Income Tax WithholdingProvides five steps for the new computation
(2)Percentage Method Tables for Federal Income Tax WithholdingProvides percentage method tables
(3)Wage Bracket Tables for Federal Income Tax WithholdingRequires the employer to locate the proper tables for the payroll period

UPDATE PAYROLL W-4’s IN FALL 2019

Taxpayers and employers alike will want to review these changes and look to update payroll W-4’s in the fall of 2019 when the final release is expected to be available.

If you have any questions, please contact a member of your BKMSHengagement team and we will be happy to discuss this topic withyou in more detail.