Restaurant Revitalization Grants Guideline Announced by SBA - Grants of up to $5 Million Will Be Available

The Small Business Administration has published details about the Restaurant Revitalization Grants (RRG) program. RRG became public law on March 11th, as part of the American Rescue Plan Act. The program appropriated $28.6 billion for the SBA to issue grants.

The program will award between $1,000 and $5 million to each eligible restaurant location, up to two locations per restaurant owner, while funds are available. Eligible eateries include restaurants, food stands, food trucks, food carts, caterers, and other places in which the public assembles to consume food.

Bakeries, brewpubs, tasting rooms, taprooms, breweries and the like are eligible if they can provide documentation that at least 33% of their gross receipts in 2019 were for on-site sales.

How are the grants computed? It’s actually pretty simple. Subtract 2020 gross receipts from 2019 gross receipts and deduct any Paycheck Protection Program (PPP) loans received. That’s the potential amount of the grant, limited to $5 million per physical location. In general, the more your revenue dropped in 2020 as compared to 2019, the more your restaurant will be eligible for.

There are alternative calculations for restaurants that were only partially open in 2019 or that began operations in 2020 by March 10th.

Funds can be used for payroll, mortgages, rent, employee benefits, utilities, supplies, food and beverages and other costs of doing business. Funds must be used by March 11, 2023.

The program is only available to restaurants that are open. The program does not apply to publicly traded companies, though franchises are eligible.

Applications will be opening soon at restaurants.sba.gov.

How Much of the 2021 Recovery Rebates Will You Receive and When Will You Receive Them?

The latest stimulus payment is called the 2021 Recovery Rebates to Individuals, written into Part 1 of H.R. 1319 - American Rescue Plan Act of 2021. The American Rescue Plan was signed into law yesterday, March 11, 2021.

Recovery “Rebate” is a bit of a misnomer, as a rebate usually refers to refunding something that was previously paid. That is obviously not the case here. But hey, we can get past that.

How much is it?

The Recovery Rebates are up to $1,400 per person, including the primary taxpayers and their dependents. So a family of four can receive up to $5,600. A single taxpayer can receive up to $1,400. The Brady Bunch could receive as much as $11,200 (or even $12,600 if Alice was claimed as a dependent by Mike and Carol Brady). That’s some serious cash! Or a single parent with one kid could receive as much as $2,800.

This $1,400 per person is for ANY dependent properly claimed by the taxpayer, unlike the previously two credits, which limited the dependents to kids under age 17. That’s a huge change for some taxpayers.

What are the income caps?

• Single and Married Filed Separate: You get the full rebate if your “Adjusted Gross Income” (AGI) was under $75,000 and it phases out at $80,000.

• Head of Household: Full rebate if your AGI was under $112,500, completely phasing out at $120,000.

• Married Filing Joint: Full rebate under $150,000; completely phasing out at $160,000.

Those are some very narrow phaseout ranges!

Based on what?

• If your most recently filed tax return is for 2019, your AGI will be based on that.

• If you have already filed your 2020 return and the IRS has processed it, your AGI will be based on this return.

• What if you’ve filed 2020 already but your 2019 AGI is lower than your 2020 AGI? While I’m not clear on it from my read of the law, I would assume they use the lesser of the two.

What if I haven’t filed 2020 yet?

• If you haven’t filed 2020 yet and did not receive the full payment based on your 2019 return, you have another chance to receive a payment if you get your return filed the earlier of 90 days after the 2020 filing deadline (April 15th plus 90 days = July 15th) or September 1st.

• Huh? That’s strange. Why isn’t it just July 15th? I guess because if the IRS decides to extend the due date of the returns, then September 1st will be the absolute final day to get another payment in 2020. Short of that, plan on July 15th.

• Long story short: GET YOUR 2020 TAX RETURNS FILED ASAP if your 2019 AGI precludes you from getting a 2021 Recovery Rebate.

THE IRS HAS A PAYMENT LOOKUP TOOL TO SEE IF YOU’RE GETTING PAID AND WHEN THEY PLAN TO PAY IT AT sa.www4.irs.gov/irfof-wmsp/login

What if I don’t get the rebate based on my 2019 or 2020 returns?

• You’ve got one more chance! When you file your 2021 tax return in 2022!

• If you fall into this category and are on the cusp of receiving a payment but your income is too high, perhaps some tax planning is in order:

  • Perhaps you are a single mom with one kid and you make $80,000 in 2021.

  • You earned too much in 2019 and 2020 to receive the $2,800 credit.

  • Get that $80,000 down to $75,000 by contributing $5,000 to your work 401(k) or to an Individual Retirement Account (IRA) and, wallah, you get a $2,800 refundable credit on your 2021 tax return. That’s an immediate 56% tax-free return on your $5,000 investment.

• Another example:

  • You are a family of 5 - Mom, Pop, Little Joey, Big Sis Allie and Granny Mabel, who is claimed as a dependent. That’s, ka-ching, That’s $7,000 in Recovery Cash (hey, I like the sound of that better than Recovery Rebate!).

  • Mom and Pop made had AGI of over $160,000 in 2019 and 2020 and thus did not receive any of this rebate.

  • They know in late summer they will have and AGI of $160,000. So, once again, consider putting $10,000 into a 401(k) or IRA (traditional, not Roth) to get that AGI down to $150,000. Invest $10,000 and receive $7,000 in rebates. Hard to beat that investment!

Other Questions

• Are these payments taxable? No.

• What if I don’t file 2019/2020 tax returns? If you received a previous stimulus payment without filing taxes, you’ll probably receive one again (assuming you are still eligible). Perhaps the IRS may have a 2021 Recovery Rebate tool to input your banking info again at www.irs.gov/coronavirus/non-filers-enter-payment-info-here.

• I really don’t need this extra money. What can I do with it? Donate it to Conejo Valley Guide, and we will put it to work in the local economy by purchasing gift cards and giving them away in drawings on our Facebook page at www.facebook.com/ConejoValleyGuide. Donations via credit card at bit.ly/CVGFund, paypal.me/ConejoValleyGuide or Venmo (@CVGuide).

Pressing tax questions? Call us at 818-876-8380. Goldstein Weiss, CPAs is located in Calabasas.

Free Online Tax Filing Options for Federal and State Income Taxes

There are a number of online resources to enable those with relatively simple tax returns to file for free. Generally these options cover those with W-2 income, some interest/dividends, kids and rent. What they don’t cover are itemized deductions, Schedule C (for self-employed individuals claiming business expenses), stock gains/losses, etc. Here are some options:

Free 1040 Tax Return: Free federal/state returns if your Adjusted Gross Income (AGI) is $69,000 or less and you are 70 or younger. www.fileyourtaxes.com/irs-free-file

H&R Block offers free federal/state returns for AGI $69,000 or less and age 17 to 51. www.hrblock.com/online-tax-filing/free-online-tax-filing

TurboTax offers free federal/state tax prep if your AGI is $36K or less and any age or meet other criteria summed up at freefile.intuit.com.

TaxAct allows for a free federal/state return if your AGI is $59,000 or less and you are age 56 or younger. www.taxact.com

Credit Karma offers free federal/state tax filing. You must sign up for a free Credit Karma account to do so. www.creditkarma.com/tax

In 2019, the IRS reports that a total of 154 million individual income tax forms were filed in the United States, including 137 million filed electronically.

Trail Etiquette Tips in the Conejo Valley and Surrounding Areas

The trails that surround us here in the Conejo Valley, including the Santa Monica Mountains maintained by the National Park Service, California State Parks and other organizations, as well as the Conejo Open Space, are a year-round wonderland for hikers, bikers, runners and equestrians. As such, it’s good to be reminded of the rules for trail etiquette.

Here is a summary of tips summarized in a brochure posted at trailetiquette.org:

Hikers, runners and mountain bikers must always yield to equestrians. Do so by immediately stopping and waiting on the downhill side of the trail. Greet the rider, as your voice also signals to the horse that you’re human and not a potential threat. Communicate with the rider and ask how to proceed. As beautiful as the horses are, do not approach or pet them without asking for permission first. If you are a cyclist, after communicating with the horse rider, pass slowly and steadily, without sudden movements or noises.

Hikers should always listen for cyclists, runners and equestrians approaching from behind. Listen for “on your left” so that you can stay to the right and let them by. Hike single-file on narrow trails and try to stay to the right on wider trails. Keep your dogs on short (6 feet maximum) leashes and of course, clean up after them. If you wear headphones, consider wearing only one earpiece or turning the volume down so you can hear your surroundings.

Bikers should slow down and yield to hikers and horses. Consider using a bell to alert others you are behind them. On a single track trail, downhill cyclists should yield to uphill cyclists.

And some other reminders…stay on the trails, don’t litter, don’t block the trail if you need to stop and don’t use the trails when the are wet and muddy.

And of course, be nice, smile at and greet your fellow trail users! We love our local trails!

GREAT TRAILS AND HIKES IN AND AROUND VENTURA COUNTY

How to Sign Up For Southern California Edison Outage Alerts

In extreme weather conditions, when heat and low humidity combine with high winds, Southern California Edison (SCE) may activate a Public Safety Power Shutoff (PSPS) when power is turned off in a high fire risk area.

Here in the Ventura County and Greater Los Angeles County area, one particularly challenging extreme weather condition arises when Santa Ana winds and low humidity increase the possibility of wildfire conditions.

Customers can report or inquire about outages at 800-611-1911 and get the latest information using the SCE outages app at sce.com/outages.

Find out which areas are under PSPS consideration or that have been de-energized at sce.com/psps

Customers can also get the latest information by visiting sce.com/staysafe or at twitter.com/sce and facebook.com/sce.

Customers can also receive outage alerts via email, voice message and/or text message. First, you have to register your account at sce.com.

After creating your account (which requires that you verify your account using an existing phone number on file, log in and update your contact information.

Then, go to My Account/Profile/Outage Alert Preferences and scroll down to the “Want to be notified?” section and click “Manage Notifications.” It takes seconds to complete and, wallah, you’ll receive outage updates in the future.

IRS Announces 2021 Tax Filing Season Will Begin on Friday, February 12th

Today, January 15th, the Internal Revenue Service announced that the 2021 tax season will start on Friday, February 12th. This is the date that the IRS will begin accepting and processing 2020 tax returns.

Why such a late start date this year? The IRS needs extra time to program and test its systems for the tax law changes signed into law on December 27th that provided a second round of Economic Impact Payments and other benefits.

You can still begin filing your returns through IRS Free File partners starting today. However, the returns will not be transmitted to the IRS until February 12th. Learn more about Free File at www.irs.gov/filing/free-file-do-your-federal-taxes-for-free.

The tax deadline for 2020 returns is April 15, 2021. Of course, you can always file an extension to file your returns by October 15th. However, you still must pay your anticipated 2020 taxes by April 15th.

Although tax seasons frequently begin in late January, there have been five instances since 2007 when filing seasons did not start for some taxpayers until February due to tax law changes made just before the start of tax time.

How to Obtain an IRS Transcript

If the above does not work and you primarily need information from the return but not necessarily a complete copy of the return, you can request a tax return transcript from the IRS. This can be done online (and almost immediately), by phone or by mail.

Obtaining an IRS Transcript Online

It’s actually quite simple obtaining a copy of tax return transcript or wage and income transcript at www.irs.gov/individuals/get-transcript. But first things first. You need to establish an eServices account with the IRS unless you already have one.

Setting up an eServices account at https://sa.www4.irs.gov/eauth/pub/es_general.jsp will take maybe 5 to 10 minutes. You’ll need the following information: Full name, Social Security Number, email, birthdate, most recent year’s tax filing status and current address. To verify your identity, the IRS will also need information from one of your financial accounts - such as the last eight digits of a credit card or other loan. You’ll also need your cell phone registered under your name to confirm you are you.

After you’ve set up your eServices account, you can log in to obtain your transcripts. Make sure your cell phone is handy, as the IRS uses two-factor authentication each time you log in. They will text a code to your phone.

When you log in, after selecting the reason for needing the transcript (e.g. Higher Education/Student Aid, FEMA/Disaster Related, etc.), you will have access to up to four years of return transcripts, five years of account transcripts and 10 years of wage and income transcripts.

Obtaining an IRS Transcript by Phone or Mail

You can also call 800-908-9946 or complete and mail in Form 4506-T to obtain a transcript. There is no cost for this. The form is at www.irs.gov/forms-pubs/about-form-4506-t.

Request a Copy of Tax Return From the IRS

If the transcript is not sufficient and you otherwise are not able to obtain a copy of your tax return, you can request a copy using Form 4506. Copies of individual tax returns (1040, 1040-SR, etc.) can take up to 75 days to be processed, so get ready to wait.

And yes, it does cost you to obtain a copy of the return. Up until very recently though, it was $50, But the new Form 4506 shows a fee of $43 for each return requested.

Returns are generally available for 7 years from filing before they are destroyed by law.