The coronavirus pandemic could affect your taxes. Here’s what you need to know – Times-Herald
With the coronavirus forcing thousands of people out of work and disrupting laborious business plans and countless lives, many people are approaching the May 17 tax deadline of this year with a series of new and unknown situations that have raised the issue. questions about what is and is not taxable. Randy Seid, a chartered accountant (CPA) at Belmont, is helping clients navigate the tax changes brought on by the pandemic – relying, like many others, on video conferences and phone calls to do business.
We have taken some of his time to get some of these questions answered. But first, a little more about Seid.
Q: Tell me a bit about what led you to become a CPA and the work you do.
Randy Seid: When I was at UCLA, a friend suggested that I take an accounting class. I took the introductory course and really liked it. I continued to take more courses and decided to pursue a Masters degree at USC with a focus on Taxation. I chose a career in public accounting because I wanted to work with a variety of entities and people. Helping businesses and individuals stay compliant, save taxes, and contribute to the success and growth of my clients’ businesses has been the most rewarding part of my career.
Q: How did you come up with the name The Bean Counter for your business?
RS: The bean counter is a name used to mock accountants. When I started my practice, I also owned a cafe that I worked on part-time. The store was small, so the customers were right next to me while I made their coffee. I have often discussed with them. They learned that I was a CPA, so I found myself giving a lot of free tax and business advice while I brewed their coffee. I think the name was perfect as it suited both companies.
Q: You are in the middle of tax season right now. What is different because of the pandemic this year?
RS: The personal tax deadline has been extended this year to May 17, 2021. There are new things to deal with in the tax return – such as the processing of Paycheck Protection Program (P3P) loans. ), claim stimulus payments on your return and exclude unemployment income.
Q: For people who received stimulus checks, does this affect their taxes? If so, how?
RS: Stimulus checks are not taxable. I have to mention that a lot of people did not receive their first and second stimulus payments or received less than the full amount. They can claim them under the recovery refund credit. This means that it will be treated as a credit which reduces the taxes you have to pay or, if you get a refund, it will be added to the amount.
Q: A lot of people lost their jobs and found themselves unemployed for the first time. Are unemployment benefits taxable?
RS: At the start of tax season, it was taxable on your federal return. However, the American Rescue Plan released in mid-March made a change to not tax the first $ 10,200 of unemployment income on people with incomes below $ 150,000. A married couple could reduce their taxable income by $ 20,400.
Q: What about PPP loans or other types of business owner assistance – do businesses have to pay taxes on these?
RS: With the PPP loan, the Internal Revenue Service (IRS) will not charge you on the part that has been forgiven. California has not made a final decision on how it will treat PPP loans, so we are still awaiting their decision. Other loans you have to repay are not considered income, so you don’t pay tax on them.
Q: If someone owes money but can’t pay, are there any payment plans or ways to delay paying taxes?
RS: Yes. The IRS and California allow you to make an installment plan to pay your taxes, but they will be subject to interest and penalties.
Q: Obviously in your job you deal with a lot of financial information and different types of customers. Which industries do you notice have been particularly affected by the pandemic?
RS: I can’t speak specifically to my clients for privacy reasons, but I think all industries that do the majority of their business in person have been hit hard. This would include the restaurant, retail, fitness, hair salon, entertainment and travel industries.
Q: Have people in certain income brackets been hit harder financially than others by the pandemic?
RS: I think it has more to do with their industry than with their income. Low-income people received additional benefits during the pandemic with the stimulus payments and the 2020 tax return changes that lowered their taxes.
Q: What else should people know about their taxes this year?
RS: This year is probably a good year to work with a professional because of all the changes and incentives they might be missing.
Name: Randy Seid
Position: Owner / CPA, The Bean Counter
Current residence: Sunnyvale
Education: Bachelor’s degree from UCLA in sociology, Master’s degree in corporate taxation from USC