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NEW TAX OFFICE: Mammoth Lakes and Surroundning Areas

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FEBRUARY 1, 2023

Over the last several years, We have been hard at work developing our personal and Professional Network in the Eastern Sierras focusing on Mammoth Lakes and surrounding areas of Mono County and Inyo County. We had the pleasure of meeting some great businesses, individuals, trusts and nonprofit organizations and we were able to help a lot of people with their taxes and accounting (Save Money and Reduce Taxes!).

On February 1, 2023 we officically launched our first office in the local area of Mammoth Lakes, CA with warm welcome from the local city and county.

Staff In-Office We are here for you! Staff are on-site. Please remember to Schedule All Meetings in advance (preferrably 24-hours minimum); we are meeting by appointment only. Also, please remember to contact us ahead of time so we can help you organize your tax and accounting information for our meeting.

Remote Tax Services If you can not make the trip into our tax office, important note, we offer Remote Tax Prep Services. It is easier than ever; Work with your CPA from the comfort of your home. All you need is a reliable internet connection and a document scanner or camera phone. Ideally you have acess to computer video meetings to speak face to face with your tax preparer.

Meet your New CPA Today – we are now serving clients in or near Mammoth Lakes and surrounding areas:

    City / TownZip Code
    Big Pine93513
    Bishop93514
    Bishop93515
    Bridgeport93517
    Coleville96107
    Death Valley92328
    Independence93526
    Inyokern93527
    June Lakes93529
    Keeler93530
    Lee Vining93541
    Little Lake93542
    Lone Pine93545
    Mammoth Lakes93546
    Olancha93549
    Shoshone92384
    Tecopa92389
    Topaz96133
    Trona93592

    We strongly encourage you to meet with us in-person OR if you prefer we can always setup a video meeting or telephone call.

    Working with Business Owners, Contractors, Rental Property Owners, Tourism Businesses, Restaurants, Hotels, Livestock, Agriculture, Mining & Exploration, Trusts, Nonprofits, etc. We are here for you! Meet your New CPA Today.

    Feel free to call 442-372-2372 or email info@mrarrachecpa.com

    Filing Deadline for Individual Tax Return April 18, 2023*

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    IMPORTANT REMINDER Tax Deadline is April 18, 2023. Normally the tax deadline is April 15th but this year Emancipation in Washington DC is April 16th (Sunday) so it will be celbrated Monday April 17th

    Imporant tax deadline can not fall on weekend or holiday so taxes for Individuals Taxes or Extensions are due April 18, 2023.

    *certain people impacted by natural disaster have had their tax deadlines extended. Please contact us immediately to see if you qualify for this additional natural disaster extension.

    Per the Governor of California Gavin Newsom’s Office

    TAX EXTENSION

    To help alleviate some of the stress many have endured during this trying period, the FTB has extended the filing and payment deadlines for individuals and businesses in California until May 15, 2023.

    This relief applies to deadlines falling on or after January 8, 2023, and before May 15, 2023, including the 2022 individual income tax returns due on April 18 and the quarterly estimated tax payments, typically due on January 17, 2023 and April 18, 2023.

    The IRS announced tax relief for Californians affected by these winter storms. Taxpayers affected by these storms qualify for an extension to May 15, 2023 to file individual and business tax returns and make certain tax payments. This includes:

    • Individuals whose tax returns and payments are due on April 18, 2023.
    • Quarterly estimated tax payments due January 17, 2023 and April 18, 2023.
    • Business entities whose tax returns and payments are due on March 15, 2023

    In addition, FTB will suspend the mailing of collection notices to affected taxpayers for the next 30 days, beginning January 13, 2023.

    Here is a link to find more information on  FTB Publication 1034, 2022 Disaster Loss: How to Claim a State Tax Deduction

    https://www.gov.ca.gov/2023/01/13/tax-relief-for-californians-impacted-by-storms

    IRS Guidance on Home Office Tax Deduction

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    PER the IRS: If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes. 

    If you are a contractor / self employed / Partner (K1), then you better pay attention to this important tax deduction.

    This year when you go to file your taxes make sure to bring the following information related to your home office.

    • Rents Paid*
    • Mortgage Interest Paid
    • Real Estate Taxes Paid
    • Insurance Paid *
    • Utilities*
    • Repairs*
    • Association Dues*
    • Maintenance*
    • Travel*
    • Legal & Professional*
    • Commissions*
    • Management Fees*
    • Bank Charges*
    • Advertising*
    • Depreciation

    *We do not need to see the support documents for most of these items, BUT you must keep for your records in case of audit. PLEASE only provide the summarized annual total spent per category. If you need us to review your support documents there could be additional charges.

    The tax preparer will calculate the greater tax benefits between the 2 alllowable methods to calculate your home office deduction.

    Method 1 = Simplified option + For tax year after 2012 per the IRS Revenue Procedure 2013-13, certain taxpayers qualify to take a prescribed rate multiplied against square feet to calculate the home office deduction instead of the Regular Method. This simplified method greatly reduces the need for substantiation and record keeping and can be easily calculated.

    Method 2 = Regular Method + For tax year 2012 and prior, the regular method allows taxpayers to take a business use % of the total home expenses plus and direct expenses. This method requires a lot more record keeping and substantiation.

    Let us know if you have any question on your taxes for your Schedule C sole propreitor business expenses or Schedule E passhtrough partnership unreimbursed expenses.

    We’re here to help you along the way; meet your new CPA today.

    IRS 2023 Mileage rates

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    Per IR-2022-234, December 29, 2022

    WASHINGTON — The Internal Revenue Service today issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

    Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

    65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
    22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
    14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.
    These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

    The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

    It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Moving Expenses for Members of the Armed Forces.

    Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

    Taxpayers can use the standard mileage rate but generally must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.

    Notice 2023-03PDF contains the optional 2023 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2023 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

    Naming the New Year: 2023 “Hungry Hummingbird”

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    Like many people, I enjoy a good tradition.

    Whether it is a familiar tradition like the family vacation or nightly family dinners, One of our favorite Traditions is Naming the New Year.

    The New Year Name is chosen before the new year starts and will reflect important plans, challenges, obstacles, etc. ahead in the New Year.

    Typically We’ve used a simple nomenclature = action + name

    For instance,

    • 2019 – “Riding Tiger”
    • 2020 – “Running Bear”
    • 2021 – “Soaring Eagle”
    • 2022 – “Hanging Man”
    • 2023 – “Hungry Hummingbird”

    Why is this important?

    In my experience, the tradition of naming the New Year has been at times inspirational, accurate and foreboding.

    2022 “Hanging Man”, for example, was pretty accurate when compared to the ferocious reverse of primary trends in Housing and Stock Markets.

    As entrepreneurs and business owners, it is important to work IN your business as well as work ON your business. The New Year name helps us associate an idea larger than any 1 person and at the same time focus 100% on the work at hand.

    2023 “Hungry Hummingbird” will be a year of restless hovering, extreme territorialism and mass migration. Much like a Hungry Hummingbird, Smart Business will only pursue positive-cash-flow opportunities OR move on to the next flower.

    A lot of people probably stopped reading when I said “nightly family dinners”, but for those of you who appreciate a tradition, We wish you a happy and safe New Year and best wishes in 2023.

    Info@mrarrachecpa.com

    Photo 116469594 / Hanged Man © Vvictori 

    You better watch out, you better not cry – Deductible Business Gifts

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    The old-as-time Christmas song “Santa Claus Is Coming To Town” makes Santa Claus sounds like an ideal accountant

    He’s making a list, he’s checking it twice
    Gonna find out who’s naughty or nice
    Santa Claus is coming to town.

    Are Business Gifts Deductible? A question that comes up often, especially during the Holiday Season and Year End Tax Planning.

    In short yes, but limited to $25/client per year.

    Per the IRS, If you give business gifts in the course of your trade or business, you can deduct all or part of the costs subject to the following limitations:

    • You deduct no more than $25 of the cost of business gifts you give directly or indirectly to each person during your tax year.
      • If you and your spouse both give gifts to the same person, both of you are treated as one taxpayer.
      • Incidental costs such as engraving, packing or shipping AREN’T included in the $25 limit if they don’t add substantial value to the gift.
      • For purposes of the $25 per person limit, don’t consider gifts costing $4.00 or less that have your business name permanently engraved on the item and which you distribute on a regular basis.
    • Any item that could be considered either a gift or as entertainment is generally considered entertainment and cannot be deducted.
    • You need to have records that prove the business purpose of the gift as well as the details of the amount spent.

    If you have questions about your business or your taxes, we’re here for you. CONTACT US HERE

    Naming the New Year: 2022 “Hanging Man”

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    Like many people, I enjoy a good tradition.

    Whether it is a familiar tradition like the family summer vacation or something simple like nightly family dinners, the “remember and repeat” activities carry much importance on celebrating the past and planning for the future.

    One tradition we enjoy Naming the New Year.

    The New Year Name is chosen before the new year starts and will reflect important plans, challenges, obstacles, etc. ahead in the new year.

    Typically I’ve used a simple nomenclature = action + name

    For instance,

    • 2019 – “Riding Tiger”
    • 2020 – “Running Bear”
    • 2021 – “Soaring Eagle”
    • 2022 – “Hanging Man”

    Why is this important?

    In my experience the tradition of naming the New Year has been at times inspirational, accurate and foreboding.

    2021 “Soaring Eagle”, for example, was pretty accurate for the Housing and Stock Markets that are still continuing to Roar into the New Year.

    As entrepreneurs and business owners it is important to work IN your business as well as work ON your business. The New Year name helps me associate an idea larger than any 1 person and at the same time focus 100% on the action in front of me.

    2022 will be a year of sacrifice and surrender but prime for contemplation and changing perspective.

    A lot of people probably stopped reading when I said “nightly family dinners”, but for those of you who appreciate a tradition, I wish you a happy and safe New Year and best wishes in 2022.

    If you have traditions please share in the comments below or email to

    Info@mrarrachecpa.com

    Photo 116469594 / Hanged Man © Vvictori 

    PPP Loans Open January 11th

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    PPP loans re-opening and important California deadlines approaching

    We have received many questions regarding new PPP loans and the California grant deadline. Both are addressed below.

    PPP loans

    The SBA has announced that the Paycheck Protection Program (PPP) will reopen the week of January 11.

    When the program reopens, the following new PPP funds will be available to borrowers:

    • New “second draw PPP loans” for smaller businesses who have experienced a 25% decline in gross receipts; and
    • Supplemental funding for:
      • Original PPP loans where the loan amount would have changed due to new rules that have been released; or
      • Businesses that did not originally apply for first draw PPP loans.

    Only community financial institutions will be able to accept first draw PPP loan applications on Monday, January 11, and second draw PPP loan applications on Wednesday, January 13. The PPP program will then open to all other participating lenders shortly thereafter.

    The SBA also released new interim final rules that implement the new loans and answer some questions, including the following:

    • For the 25% decrease in gross receipts for second draw loans, the Consolidated Appropriations Act of 2021 states that they must show a decrease for a quarter in 2020 compared to a quarter in 2019. However, the interim final rules also say that businesses can compare calendar year 2019 to calendar year 2020 to show the 25% decrease;
    • First draw PPP loans will not be included in the gross receipts calculation for second draw loans;
    • In addition to showing that they have used, or will use, all of their first draw loan, second draw borrowers must have spent the full amount of the first draw loan on eligible expenses under the PPP rules to be eligible for a second draw loan. This means borrowers requesting second draw loans should prepare forgiveness applications for their first draw loans, because they are likely to be requested by the bank;
    • EIDL grants no longer reduce PPP forgiveness. Borrowers who previously had their PPP forgiveness reduced by the amount of the EIDL advance should contact their lender;
    • Borrowers in bankruptcy may not receive additional PPP funds; and
    • Businesses that have temporarily closed may still apply for PPP loans to help them reopen.

    The interim final rules on first draw PPP loans can be found here:

    www.sba.gov/document/policy-guidance-ifr-paycheck-protection-program-ppp-amended-economic-aid-act

    The interim final rules on second draw PPP loans can be found here:

    www.sba.gov/document/policy-guidance-ifr-paycheck-protection-program-ppp-second-draw-loans

    California deadlines approaching

    • The deadline to apply for a California Relief Grant of up to $25,000 has been extended until Wednesday, January 15, 2021. Details on this program can be found at: https://careliefgrant.com/
    • The deadline to reserve the California Main Street Small Business Credit is Friday, January 15, 2021. Businesses that are currently closed may still apply if they had more full-time equivalent employees in July through November of 2020 than they did during the second quarter of 2020. Details on this program can be found at: https://cdtfa.ca.gov/taxes-and-fees/SB1447-tax-credit.htm

    Please reach out with any questions about this article or to talk to one our CPA’s regarding your taxes.

    info@mrarrachecpa.com

    Get ready to apply for PPP second draw loans

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    Get ready to apply for PPP second draw loans(12-28-20)

    The President has signed the Consolidated Appropriations Act of 2021 (H.R. 133), which, among other things, authorizes a new round of Paycheck Protection Program (PPP) loans called second draw loans. This allows some borrowers to request supplemental funding on their original PPP loans.

    Second draw loans

    Second draw loans are only available to businesses that employ 300 or fewer employees (part-time and seasonal count), and have at least a 25% reduction in gross receipts.

    It is unclear whether applicants must have already received a loan under the first round of available PPP loans in order to qualify for the new second draw loans (we are awaiting guidance from the SBA on this). However, it is clear that if they have received a prior PPP loan they must have used, or will use, the first loan prior to the disbursement of a second draw loan.

    Supplemental funding

    Borrowers can also submit supplemental PPP loan requests in all cases where their original PPP loan amount would have changed due to new rules that have been released. This applies to partnerships where the original loan did not include the self-employment earnings of the partners. But it also applies to borrowers who returned their original loans, or took reduced loans to qualify for other benefits that are no longer limited for PPP recipients, such as the Employee Retention Credit.

    Borrowers must request this additional funding before forgiveness is granted on their original PPP loan.

    Deductions allowed

    H.R. 133 also clarifies that borrowers who have loans forgiven may claim deductions for expenses even if expense were paid with loan amounts that were forgiven. This applies to all PPP loans.

    California does not conform to this federal law, which is amended as part of the stimulus package. Taxpayers will still be required to reduce their deductions on the California return because California enacted AB 1577 (Ch. 20-39), which specifically prohibits taxpayers from claiming any deductions or credits for expenses that are paid with forgiven PPP loan amounts.

    Email if you have questions about this article or your business.

    Info@mrarrachecpa.com