Aloha Tax Group

Hello Everyone! You will find below IMPORTANT tax UPDATES that may affect you. Please read to be up to date in all these current changes, as they are rapidly changing. This means, what I told you last week probably already changed: 1) IRS NEW DEADLINE TO FILE AND PAY FOR YOUR 2019 FEDERAL TAX RETURNS: JULY 15, 2020 https://www.irs.gov//payment-deadline-extended-to-july-15-... 2) IRS NEW DEADLINE TO PAY 2020 1st QUARTER OF ESTIMATED TAXES: JULY 15,2020 3) IRS NEW DEADLINE TO PAY 2020 2nd QUARTER OF ESTIMATED TAXES: JULY 15, 2020 https://www.irs.gov//irs-extends-more-tax-deadlines-to-cov 4) STATE OF HAWAII DEPT. OF TAXATION DEADLINE TO FILE YOUR 2019 INCOME TAX RETURNS: JULY 15, 2020 https://files.hawaii.gov//2020-03-23-relief_for_taxpayers_ PS: Most States complied with the IRS new deadline. If you are my client, I already verified that for you based in your previous tax returns. IMPORTANT: If you had business in Mississippi, Idaho or Virginia, please let me know, so I can file an extension in your behalf. ******STATE OF HAWAII DEPARTMENT OF TAXATION DEADLINE TO FILE THE 1ST. QUARTER OF THE 2020 ESTIMATED TAXES: APRIL 2020***** NOTE THAT IT DID NOT CHANGE https://tax.hawaii.gov//2019-only-Tax-ANN-2020-01-COVID19- 5) DEADLINE TO FILE HAWAII GENERAL EXCISE TAXES AND TAT TAXES: APRIL 20, 2020. NOTE THAT IT DID NOT CHANGE 6) SBA EMERGENCY LOAN TO SMALL BUSINESS- They changed the rule, and the original grant amount that was of $10,000.00 is now $1,000.00 per employee. Not fair at all!!! How can we trust what they say if they keep changing the rules? 7) STIMULUS CHECKS TO INDIVIDUAL TAXPAYERS. Checks and direct deposits are on their way if you qualify. As I told you before there are income limitations (check my previous e-mails). Some of you will not qualify. We are also holding some of your tax returns so you can qualify based on your 2018 tax returns. IMPORTANT: If the IRS does not have your bank info and you prefer to receive your stimulus check by direct deposit, go to the link below to update your info. The link will be active soon. https://www.irs.gov/coronavirus/economic-impact-payments. IF YOU MOVED TO A NEW ADDRESS YOU SHOULD UPDATE YOUR INFO AS WELL. See link below: https://www.irs.gov/coronavirus/economic-impact-payments Need Help with your tax returns? CALL us TODAY! (808) 419-0840 www.alohataxgroup.com

PPP LOAN RE-OPENING!!! Small businesses have until March 31 This week, the Paycheck Protection Program (PPP) re-opened for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to provide loans. The PPP will open to all participating lenders shortly thereafter.... This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021. Key PPP updates include: PPP borrowers can set their PPP loan-coverage period to be any length between 8 and 24 weeks PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs and worker protection expenditures Greater flexibility for seasonal employees Certain existing PPP borrowers can request to modify their first draw PPP loan amount Certain existing PPP borrowers are now eligible to apply for a second draw A borrower is generally eligible for a second draw if the borrower: Previously received a first draw PPP loan and will use or has used the full amount only for authorized uses Has no more than 300 employees Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020 See with your local bank if you qualify! Aloha Tax Group www.alohataxgroup.com

Don’t forget, Social Security benefits may be taxable Taxpayers receiving Social Security benefits may have to pay federal income tax on a portion of those benefits. Social Security benefits include monthly retirement, survivor and disability benefits. They don't include supplemental security income payments, which aren't taxable.... The portion of benefits that are taxable depends on the taxpayer’s income and filing status. To find out if their benefits are taxable, taxpayers should: Take one half of the Social Security money they collected during the year and add it to their other income. Other income includes pensions, wages, interest, dividends and capital gains. If they are single and that total comes to more than $25,000, then part of their Social Security benefits may be taxable. If they are married filing jointly, they should take half of their Social Security, plus half of their spouse's Social Security, and add that to all their combined income. If that total is more than $32,000, then part of their Social Security may be taxable. Fifty percent of a taxpayer’s benefits may be taxable if they are: Filing single, single, head of household or qualifying widow or widower with $25,000 to $34,000 income. Married filing separately and lived apart from their spouse for all of 2019 with $25,000 to $34,000 income. Married filing jointly with $32,000 to $44,000 income. Up to 85% of a taxpayer’s benefits may be taxable if they are: Filing single, head of household or qualifying widow or widower with more than $34,000 income. Married filing jointly with more than $44,000 income. Married filing separately and lived apart from their spouse for all of 2019 with more than $34,000 income. Married filing separately and lived with their spouse at any time during 2019. The Interactive Tax Assistant on IRS.gov can help taxpayers answer the question Are My Social Security or Railroad Retirement Tier I Benefits Taxable? The tax filing deadline has been postponed to Wednesday, July 15, 2020. The IRS is processing tax returns, issuing refunds and accepting payments. Taxpayers who mailed a tax return will experience a longer wait. There is no need to mail a second tax return or call the IRS. More information: Social Security Income Publication 915, Social Security and Equivalent Railroad Retirement Benefits

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WE WILL BE ON THE RADIO TODAY, 05/26, AT 2PM, AT 98.6 FM (HAWAII) TO TALK ABOUT THE COVID-19 and TAX CONSEQUENCES. TUNE IN!WE WILL BE ON THE RADIO TODAY, 05/26, AT 2PM, AT 98.6 FM (HAWAII) TO TALK ABOUT THE COVID-19 and TAX CONSEQUENCES. TUNE IN!

DID YOU PAY SUBCONTRACTORS IN 2020? YOU MAY NEED TO FILE FORMS 1099-NEC OR 1099-MISC! DEADLINE JANUARY 2021 January is the month of the deadlines, specially if you had any business and/or rental activity in the previous year....Continue reading

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Unemployment compensation is taxable; Have tax withheld now and avoid a tax-time surprise!!! With millions of Americans now receiving taxable unemployment compensation, many of them for the first time, the Internal Revenue Service today reminded people receiving unemployment compensation that they can have tax withheld from their benefits now to help avoid owing taxes on this income when they file their federal income tax return next year. By law, unemployment compensation i...s taxable and must be reported on a 2020 federal income tax return. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted this spring. Withholding is voluntary. Federal law allows any recipient to choose to have a flat 10% withheld from their benefits to cover part or all of their tax liability. To do that, fill out Form W-4V, Voluntary Withholding Request (PDF), and give it to the agency paying the benefits. Don’t send it to the IRS. If the payor has its own withholding request form, use it instead. If a recipient doesn’t choose withholding, or if withholding is not enough, they can make quarterly estimated tax payments instead. The payment for the first two quarters of 2020 was due on July 15. Third and fourth quarter payments are due on Sept. 15, 2020, and Jan. 15, 2021, respectively. For more information, including some helpful worksheets, see Form 1040-ES and Publication 505, available on IRS.gov. Here are some types of payments taxpayers should check their withholding on: Unemployment compensation includes: Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund Railroad unemployment compensation benefits Disability benefits paid as a substitute for unemployment compensation Trade readjustment allowances under the Trade Act of 1974 Unemployment assistance under the Disaster Relief and Emergency Assistance Act of 1974, and Unemployment assistance under the Airline Deregulation Act of 1978 Program. NEED HELP TO CALCULAYE YOUR ESTIMATED TAXES? CALL ALOHA TAX GROUP TODAY (808) 419-0840 www.alohataxgroup.com.

TAXPAYER RELIEF INICIATIVE AIMS TO HELP THOSE FINANCIALLY AFFECTED BY COVID-19 T The IRS reviewed its collection activities to see how it could provide relief for taxpayers who owe taxes but are struggling financially because of the pandemic. The agency is expanding taxpayer options for making payments and other ways to resolve tax debt. Taxpayers who owe taxes always had options to get help through payment plans and other tools from the IRS. The new IRS Taxpayer Relief Initi...Continue reading

IMPORTANT INFORMATION: TAX INFORMATION RELEASE NO. 2020-02 (REVISED) RE: Hawaii Tax Treatment of Various Federal COVID-19 Relief Programs and Payments...Continue reading

Earning side income: Is it a HOBBY or a BUSINESS? Whether it’s something they’ve been doing for years or something they just started to make extra money, taxpayers must report income earned from hobbies in 2020 on next year’s tax return. What the difference between a hobby and a business? A business operates to make a profit. People engage in a hobby for sport or recreation, not to make a profit.... Here are nine things taxpayers must consider when determining if an activity is a hobby or a business: Whether the activity is carried out in a businesslike manner and the taxpayer maintains complete and accurate books and records. Whether the time and effort the taxpayer puts into the activity show they intend to make it profitable. Whether they depend on income from the activity for their livelihood. Whether any losses are due to circumstances beyond the taxpayer’s control or are normal for the startup phase of their type of business. Whether they change methods of operation to improve profitability. Whether the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business. Whether the taxpayer was successful in making a profit in similar activities in the past. Whether the activity makes a profit in some years and how much profit it makes. Whether the taxpayers can expect to make a future profit from the appreciation of the assets used in the activity. NOT SURE? SCHEDULE YOUR CONSULTATION WITH US TODAY! www.alohataxgroup.com