#Six Month Dec 2020 to May 2021 Calendar

[elizabethcariasa]

FBAR filing deadline is April 15. Or Oct. 15

If it feels like you just filed required federal forms about your overseas financial holdings, you're probably right.

Last year, as we all were working to adjust to the myriad tax (and life) changes precipitated by the COVID-19 pandemic, lots of tax deadlines got pushed back. Some way back.

One of those was the filing extension for Form 114, Report of Foreign Bank and Financial Accounts, usually referred to as FBAR. Some individuals didn't have to submit this document until Dec. 31, 2020.

Now FBAR filers are facing a new deadline. Next week. On Thursday, April 15.

That's right. The May 17 automatic filing extension granted for federal tax returns and a few other tax responsibilities does not apply to FBAR.

However, if you dig a little deeper into the process, you'll discover that there's also an automatic extension until Oct. 15 for filers who can't meet next week's April 15 deadline.

Why the IRS April 15 notice? It's no secret that a popular way to avoid U.S. taxes is to stash money in an account (or two or …) abroad.

Uncle Sam tracks this taxable money held in foreign accounts through the efforts of two agencies, the Internal Revenue Service and its sister agency within the U.S. Treasury, the Financial Crimes Enforcement Network, usually referred to as FinCEN.

It's also no secret that the IRS would like to get all relevant tax material, foreign or otherwise, in and input into its systems as soon as possible. So it's no surprise, even though FBAR doesn't strictly fall under IRS jurisdiction, that it today issued an announcement that the FBAR deadline for 2021 is April 15.

But this filing, Form 114, is submitted to FinCEN, not (as just noted) the IRS. And FinCEN says in its publication on Filing Requirements For Report of Foreign Bank and Financial Accounts that there's an automatic six-month extension for the filing.

Specifically, when the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 changed the annual due date for filing FBARs to April 15, it also mandated the extension period.

So per that law, FinCEN grants filers failing to meet the FBAR annual April deadline an automatic extension to Oct. 15. Note that it's automatic. That means you don't have to file anything else to get the added six months.

Who has to file a FBAR? Even if you can't meet the April 15 deadline and will file by mid-October, you still should be aware of the FBAR requirements.

FinCEN has been collecting FBAR data per the Bank Secrecy Act since 1970. There are two key components, the individuals who must report and the amount of money that triggers the reports.

The law says a U.S. person must file a FBAR if —

They have financial interest in, signature authority or other authority over one or more accounts, such as bank accounts, brokerage accounts and mutual funds, in a foreign country, and

The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

The FBAR definition of person also is broader than what we tend to find in a standard dictionary. Under the law, a U.S. person is a citizen or resident of the United States or any domestic legal entity such as a partnership, corporation, limited liability company, estate or trust.

As for what constitutes a foreign country, the law says that's any area outside the United States, Indian lands as defined in the Indian Gaming Regulatory Act, and the following U.S. territories and possessions:

Northern Mariana Islands,

District of Columbia,

American Samoa,

Guam,

Puerto Rico,

United States Virgin Islands, and

Trust Territories of the Pacific Islands.

How much money counts? Now about FBAR's financial trigger. Again, there are two key words/phrases mentioned earlier, aggregate and any time during the calendar year.

This is a cumulative balance, meaning if you have two foreign financial accounts with a combined balance exceeding $10,000 at any one time in the tax year, both accounts would have to be reported.

Then the IRS and FinCEN also bring another consideration into play, maximum value. Uncle Sam wants this amount, too.

The maximum value of an account is a reasonable approximation of the greatest value of currency or nonmonetary assets in the account during the calendar year. "Periodic account statements may be relied on to determine the maximum value of the account," according to FinCEN, "provided that the statements fairly reflect the maximum account value during the calendar year."

If you have/had a financial interest in more than one account, each account must be valued separately.

When recording the maximum value of accounts, record all amounts as U.S. dollars rounded up to the next whole dollar, regardless of the cents. For example, $15,265.25 in an account at its highest point would be recorded as $15,266.

If an account is in non-U.S. currency, convert the maximum account value into dollars. You can use the Treasury's Financial Management Service rate for the last day of the calendar year.

What records are needed? You also must keep You must keep records for each account you must report on an FBAR that establish. The information required includes:

Name on the account, 

Account number,

Name and address of the foreign bank, 

Type of account, and 

Maximum value during the year. 

The law doesn’t specify the type of document to keep with this information. It can be bank statements or even a copy of the FBAR you filed. Just make sure your documentation has all the necessary data.

You must hang onto these records for five years from the due date of the FBAR.

How do I file FBAR? FBAR filing, or specifically FinCEN Form 114, is not filed with the IRS. It's filed directly with FinCEN.

It also must be filed electronically at FinCEN's BSA (Bank Secrecy Act) E-Filing System website. Below is the page you'll see when you head there.

And even though it's not an IRS form and it's only filed electronically, FBAR reporting earns a spot on the Tax Forms Fiesta! page.

What if you don't report an account? Even though FinCEN offers a filing due date cushion, it eventually wants your foreign account information.

If you fail to provide it, you'll pay.

If you are required to file an FBAR and don't do so, you could face a civil penalty of up to $10,000. The penalty could be waived if you can show reasonable cause for missing the filing.

But if you willfully fail to report an account or don't provide required account identifying information, the penalty price goes up. You could be subject to a civil monetary penalty equal to the greater of $100,000 or 50 percent of the balance in the account at the time of the violation.

Wait. Isn't there another foreign account filing? Some folks right about now are wondering about another foreign financial holdings tax requirement. That's the Foreign Account Tax Compliance Act or FATCA.

FATCA requires certain U.S. taxpayers holding financial assets outside the United States to report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets.

Depending on your foreign holdings and amounts, you might need to file per FATCA, FBAR or both.

FATCA's Form 8938, when required, is sent along with your annual income tax return. And since this year, that deadline isn't until May 17, I'll blog about FATCA requirements in a future post.

Isn't it always fun to have something to look forward to, especially when it's a relatively arcane tax topic?

You also might find these items of interest:

2021 housing cost tax break amounts for U.S. expatriates

FinCEN, FBAR and other tax costs that prompt or slow U.S. expatriations

IRS not budging: April 15 is the deadline for 2021's first estimated tax payment

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[124southmain]

New law extends COVID tax credit for employers who keep workers on payroll on Cook & Co. News

New Post has been published on https://cookco.us/news/new-law-extends-covid-tax-credit-for-employers-who-keep-workers-on-payroll/

New law extends COVID tax credit for employers who keep workers on payroll

The Internal Revenue Service urges employers to take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll.

The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted Dec. 27, 2020, made a number of changes to the employee retention tax credits previously made available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including modifying and extending the Employee Retention Credit (ERC), for six months through June 30, 2021. Several of the changes apply only to 2021, while others apply to both 2020 and 2021.

As a result of the new legislation, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after Dec. 31, 2020, through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum ERC amount available is $7,000 per employee per calendar quarter, for a total of $14,000 in 2021.

Employers can access the ERC for the 1st and 2nd quarters of 2021 prior to filing their employment tax returns by reducing employment tax deposits. Small employers (i.e., employers with an average of 500 or fewer full-time employees in 2019) may request advance payment of the credit (subject to certain limits) on Form 7200, Advance of Employer Credits Due to Covid-19, after reducing deposits. In 2021, advances are not available for employers larger than this.

Effective Jan. 1, 2021, employers are eligible if they operate a trade or business during Jan. 1, 2021, through June 30, 2021, and experience either:

A full or partial suspension of the operation of their trade or business during this period because of governmental orders limiting commerce, travel or group meetings due to COVID-19, or

A decline in gross receipts in a calendar quarter in 2021 where the gross receipts of that calendar quarter are less than 80% of the gross receipts in the same calendar quarter in 2019 (to be eligible based on a decline in gross receipts in 2020 the gross receipts were required to be less than 50%).

Employers that did not exist in 2019 can use the corresponding quarter in 2020 to measure the decline in their gross receipts. In addition, for the first and second calendar quarters in 2021, employers may elect in a manner provided in future IRS guidance to measure the decline in their gross receipts using the immediately preceding calendar quarter (i.e., the fourth calendar quarter of 2020 and first calendar quarter of 2021, respectively) compared to the same calendar quarter in 2019.

In addition, effective Jan. 1, 2021, the definition of qualified wages was changed to provide:

For an employer that averaged more than 500 full-time employees in 2019, qualified wages are generally those wages paid to employees that are not providing services because operations were fully or partially suspended or due to the decline in gross receipts. 

For an employer that averaged 500 or fewer full-time employees in 2019, qualified wages are generally those wages paid to all employees during a period that operations were fully or partially suspended or during the quarter that the employer had a decline in gross receipts regardless of whether the employees are providing services.  

Retroactive to the Mar. 27, 2020, enactment of the CARES Act, the law now allows employers who received Paycheck Protection Program (PPP) loans to claim the ERC for qualified wages that are not treated as payroll costs in obtaining forgiveness of the PPP loan.

For more information, see COVID-19-Related Employee Retention Credits: How to Claim the Employee Retention Credit FAQs

[insanityclause]

With cinemas across the country shuttered indefinitely amid the coronavirus pandemic, a new issue has arisen for the Academy of Motion Picture Arts and Sciences, which is evaluating "all aspects of this uncertain landscape and what changes may need to be made" ahead of awards season.

"The Academy is focused on helping our staff, our members, and the industry safely navigate through this global health and economic crisis," an Academy spokesperson said Thursday in a statement. "We are in the process of evaluating all aspects of this uncertain landscape and what changes may need to be made. We are committed to being nimble and forward-thinking as we discuss what is best for the future of the industry and will make further announcements in the coming days."

To be eligible for the vast majority of Oscar categories, a film must screen in a commercial theater in Los Angeles for one week within the calendar year of the year preceding the Oscars ceremony. The 93rd Oscars ceremony is scheduled for Feb. 28, 2021.

In the past week, the nation's three largest cinema chains — AMC Theatres, Regal Cinemas and Cinemark — shut down all of their locations, and some studios are now opting to release their product direct to VOD and streaming platforms instead of holding them for a later theatrical release. Universal Pictures broke the traditional theatrical model on Monday by saying it will release its upcoming animated film Trolls World Tour on demand on April 10 for a $19.99 48-hour rental fee as theaters remain dark.

In the event that movie theaters in L.A. remain closed for a significant portion of the rest of 2020, then only a handful of films will have qualified for Oscar consideration — all first-quarter titles, such as The Invisible Man, Onward, Emma, First Cow and The Way Back. (For reference, here are the year's best-reviewed films and highest-grossing films so far.)

The Academy may have to choose from several less-than-ideal options.

For one, the organization could move forward with its existing timetable and choose nominees from that very limited pool of options.

Alternatively, it could make a one-time provision allowing films to qualify for Oscars eligibility via streaming services — distributors' own (e.g. Netflix) and/or the one created for Academy members — even if they have not screened for a week in an L.A. theater. (Adam Benzine, a journalist and Oscar-nominated documentary filmmaker, has suggested that the Academy could make qualification-via-streaming dependent upon getting some sort of assurance that the film would be given a theatrical release when one becomes possible, but this seems unenforceable — plus it would undoubtedly infuriate the theater chains.)

Or, the Academy could postpone the Oscars, something it has done three times before — for one week in 1938 when L.A. was hit by severe flooding; for two days in 1968 in the wake of the assassination of Dr. Martin Luther King; and for one day in 1981 following the attempted assassination of President Ronald Reagan — and extend the eligibility period for the 93rd Oscars beyond a year.

There actually is precedent for making the eligibility period something other than the January-December calendar year. Consider the first six Oscars ceremonies:

1ST Eligibility period: Films released in 1927 or 1928 Ceremony: May 1929

2ND Eligibility period: Aug. 1, 1928 – July 31, 1929 Ceremony: April 1930 Note: Technically, it would appear, films released between Aug. 1, 1928, and Dec. 31, 1928, were eligible for a second year in a row. But no nominees were announced this year, and winners were determined by a 'Central Board of Judges,' who presumably sought to avoid overlap with the prior year's honorees.

3RD Eligibility period: August 1, 1929 – July 31, 1930 Ceremony: Nov. 1930 Note: Yes, two Oscars ceremonies were held in one calendar year, just seven months apart! This one was scheduled for November so that, moving forward, Oscars ceremonies would happen much closer to the end of the eligibility period, which was then July 31.

4TH Eligibility period: Aug. 1, 1930 – July 31, 1931 Ceremony: Nov. 1931

5TH Eligibility period: August 1, 1931 – July 31, 1932 Ceremony: Nov. 1932

6TH Eligibility period: August 1, 1932 – December 31, 1933. Ceremony: March 1934 Note: That's right, there was no Oscars ceremony at all in 1933, the year of the bank crisis that I wrote about earlier this week. Instead, the Oscars ceremony in 1934 considered films spanning released over a 17-month period, in order to make a new eligibility period: the calendar year preceding the ceremony.

Ever since the sixth Oscars, the ceremony has been held in February, March or April, and considered films released during the prior calendar year — but there is nothing compelling the organization to maintain that timetable.

[elizabethcariasa]

July 15 tax filing and payment deadline Q&A

We're in what during normal times would be the annual tax season's big push to the end (or an extension). But these are not normal times. Instead, it feels more and more like we're living in a tax version of Bill Murray's classic "Groundhog Day."

That's because for the second time in three days the Treasury Department and Internal Revenue Service have moved the deadlines for filing and paying taxes.

Friday, March 20, morning Treasury Secretary Steve Mnuchin decided that an earlier decision that split the usual April 15 deadline for tax filing and paying should be changed. So he announced, via Tweet, that those two tax tasks would be reunited, pushing the due date for paying and now filing returns to July 15.

Later that day, the IRS tried to clear things up (again) by issuing guidance in Notice 2020-18 about 2020's new July 15 Tax Day. Naturally, that makes July 15 this week's By the Numbers honoree.

And since my tax deadlines questions and answers post the first time the IRS did this (way back on March 18) was so popular, here's a new Q&A for the latest and we hope last Tax Day changes.

When do I have to send my Form 1040 to the IRS? Wednesday, July 15 is the new deadline to e-file (by midnight your time) or snail mail (so that the envelope has a 7/15 postmark) your 2019 tax year return. Treasury and the IRS shifted it from April 15 to July 15 to align it with their earlier move of the just-tax-payment deadline. As many (many, many, many) folks noted, this division had the potential to be more confusing that the actual filing itself, so kudos to Treasury and the IRS for granting us 90 extras days to finish our tax forms and pay what we owe.

When do I have to pay any tax I owe? Again, this due date remains July 15. That gives you three more months to come up with the money or make payment arrangements with the IRS.

Does the July 15 deadline apply to all taxpayers? Yes. The IRS reiterated in its latest notice that the July 15 tax filing and payment deferment applies to all taxpayers. This includes individuals, trusts and estates, corporations and other non-corporate tax filers, as well as entrepreneurs who pay self-employment tax.

Does it matter how big my tax bill is? This is a change from the earlier iteration of the new 90-days-later Tax Day. In the first shifting of tax deadlines, the option to pay taxes as late as July 15 applied only to certain individual taxpayers and businesses that met caps on the amount of tax owed. Those tax bill limits are gone. All taxpayers now can postpone paying their due federal income tax until July 15, regardless of the amount owed.

Will the IRS slap me with extra charges for using this July 15 deadline? No. Taxpayers can make their 2019 federal income tax payments as late as July 15 and not face penalties or interest. Note, however, that if you don't pay any tax due by the July deadline, penalties, interest or any other additional fees for failure to file or pay will start adding up on July 16.

What if I still can't make the new, later July 15 deadline? The later Tax Day date is automatic, so there's no need to mess with filing an extension request by April 15. If, however, mid-summer arrives and you still can't complete your 1040, not to worry. The existing Oct. 15 extended filing deadline is still around.

In an news release issued today, March 21, the IRS notes that individual taxpayers who need additional time to file beyond the July 15 deadline can request a filing extension by submitting Form 4868 and automatically get even more time to file. Businesses that need additional time beyond July 15 can by that date send the IRS Form 7007.

You can file Form 4868 electronically or download the paper form and snail mail it. That form, however, might need to be tweaked, too, since it usually is connected to paying any tax you owe. There's also some thought that since this usually is six-month filing extension, the final deadline might be pushed from Oct. 15 to Jan. 15, 2021. (It's always something with taxes.)

Remember, though, that the extra time afford by filing Forms 4868 or 7007 is for finishing up your tax forms only. You still have to pay any tax due by the deadline, which this year is July 15.

What about other tax deadlines? The annual April tax deadline normally applies to more than just your prior year's tax return and any amounts owed. It's also the due date for some other taxes and tax-related moves. This includes the first estimated tax payment for 2020 that's due on April 15, as well as the ability to put money into tax-favored health savings accounts and IRAs.

Those other tax filings are not covered by the new July 15 deadlines. According to Notice 2020-18 (I added the bold type):

"The relief provided in this section III is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year."

This is the same stance as the IRS took in the first separate filing/payment deadline change. It's a curious position since two estimated tax deadlines fall within this April-to-July time period, but only one, the 1040-ES due on April 15, is given the added July 15 grace period.

Again, why IRS? Why are you making us pay the second quarter estimated tax due on June 15 BEFORE we have to pay our first estimated tax for 2020 by July 15? What's another month wait at this point? You need to take a look at the proposal in the Senate's coronavirus relief bill.

The Upper Chamber's Coronavirus Aid, Relief, and Economic Security Act, or as it's being called the CARES bill, makes changes to various tax filing and payment due dates (discussed in a Twitter exchange about the bill).

As for estimated tax deadlines, the CARES Act would delay the April, June and September estimated tax payment deadlines (shown in red in the table below) for the 2020 tax year until Oct. 15.

Estimated Tax Payment Periods and Due Dates

 Payment #

 Due Date*

 For income received in

 1

 April 15

 Jan. 1 through March 31

 2

 June 15

 April 1 through May 31

 3

 Sept. 15

 June 1 through Aug. 31

 4

 Jan. 15 of the next year

 Sept. 1 through Dec. 31

*If the 15th is on weekend or federal holiday, the estimated payment is due the next business day

  CARES says "all such [estimated tax] installments shall be treated as one installment due on such date."

As for the contributions to IRAs and HSAs that can be made for the prior tax year as late as April 15, it appears that the April deadline is still in force. Notice 2020-18 expressly states:

"No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return."

However, some tax pros think this latest extension notice implies that these deadlines also will be extended. Some cite Tax Code Section 301.7508A-1 - Postponement of certain tax-related deadlines by reasons of a federally declared disaster or terroristic or military action.

Personally, I'd like the IRS to give us some more explicit clarification here. C'mon man, don't make us argue among ourselves and have to second guess what y'all at 1111 Constitution Avenue, N.W. are thinking!

Will the same payment delay apply to my state taxes? Most of the 43 states and District of Columbia where some sort of income tax is collected tend to follow the IRS when it comes to things like filing deadlines. When that's been changed in the past, these state tax departments tended to follow.

But payments are different. Many states were facing budget difficulties before they, too, saw their economies whacked by the coronavirus outbreak. So they might not be as willing or able to forgo revenue collection even for a relatively brief period.

Gail Cole has a state tax action segment in her new coronavirus tax relief roundup at the Avalara blog. Tripp Baltz and Michael J. Bologna, staff correspondents with BloombergTax, also note that Some States Auto-Match IRS Tax Delay; Others in Flux. And the AICPA has a handy table of State Tax Filing Guidance for Coronavirus Pandemic.

My best advice here is for you to be pro-active. Pay attention to your local news, which should alert you to local and state tax changes, and periodically check in with your state tax officials. You can find links to them in the ol' blog's state tax directory.

What does all this messing with tax calendars really mean? For taxpayers, it's generally a good thing. As we deal with the COVID-19 disruptions in our personal lives, we at least don't have the added stress of an impending tax deadline. And the extra time gives those who owe more time to come up with the cash due Uncle Sam.

Tax professionals also are breathing sighs of relief — from their appropriately social/physical distances of at least 6 feet, of course. They don't have to deal with a lot of frantic clients all pressuring them seemingly simultaneously to get their returns done. They should be able to space out the workflow a bit to take some pressure off themselves and their staff.

It should help the IRS, too. The delay could help the agency cope with the added stressor that the pandemic has created for the agency, which in addition to dealing with taxpayers has to think about its thousands of worried and possible ill employees across the country. Now they get more time and don't have to worry about keeping track of two separate Tax Day deadlines.

Logistically, the IRS would like all of us who can file before July to do so. That would help the agency spread the work out more, rather than having a big crush of returns in mid-summer.

"Even with the filing deadline extended, we urge taxpayers who are owed refunds to file as soon as possible and file electronically," said IRS Commissioner Chuck Rettig. "Although we are curtailing some operations during this period, the IRS is continuing with mission-critical operations to support the nation, and that includes accepting tax returns and sending refunds."

Rettig also reassures us that refunds are going out as soon as they are processed. And he's asking that we cut his agency and employees some slack in what he notes is a challenging and "very rapidly changing environment."

"As a federal agency vital to the overall operations of our country, we ask for your personal support, your understanding – and your patience," said Rettig. He also encouraged folks to check out the agency's special coronavirus page at IRS.gov where it posts updates on tax matters affected by the pandemic.

I'm inclined to give the IRS some leeway here. It's crazy and scary for us all. I appreciate everyone who's doing the best jobs they can under the circumstances.

Finally, take care of yourselves and families first, especially now that you have some added time to take care of your taxes.

You also might find these items of interest:

Businesses get tax relief in House-passed coronavirus bill

Stop smoking to reduce health risks & possibly your taxes

Obamacare tax forms in the time of coronavirus

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