Lots of Goodies to Read About

First and Foremost, What is on our Minds...

Now that the 9/15 deadline has passed (and we can come up for air), we will now begin to focus on the 10/15 1040 deadline. If your individual income tax return is on extension, here are a few items to consider::

• If you have NOT sent us your personal tax return information, please get it to us ASAP!

• Please watch for important phone calls and emails from our team as it may relate to your tax return.

Phase 4 of the program has two parts to it, and this will be taxable income if you receive it:

1.      Rural community providers – the government will decide whether you are eligible based on your address and the volume of patients who live in rural areas, number of patients using Medicaid, etc.

2.      General distribution to providers – this is following the traditional format of an income comparison as before. This time, the income comparison time-period will be July 1, 2020, to March 3, 2021.

You will be able to apply for both parts of the program at one time. We recommend signing up for their email updates if you have not already done so. 

CLICK HERE to connect to the website.

If you think you did not receive the correct amount of funding during Round 3, as part of this program you will be able to challenge the government’s calculation. Exact steps to do that (guess what!) have not been released yet. We recommend keeping your eyes open for the emails that are being sent from HHS directly to providers.

HHS Reporting Requirements Round 1 Deadline Postponed (again!) to November 30th

The HHS Provider Relief Fund spending and reporting requirements have been extended but the HHS asks you to complete it as soon as you can prior to the deadline.

-         If you received $10,000 or more prior to July 1, 2020, reporting expenses began on July 1, 2021, and you now have until November 30, 2021, to complete the form.

-         If you received $10,000 or more after July 1, 2020, you now have until December 31, 2021, to spend the money and reporting expense will not begin until January 1, 2022.

HHS reporting requirements details can be found HERE in addition to the email you received from the HHS.

Two tutorials on You Tube that are very good at explaining the reporting requirements may be found here:

            https://www.youtube.com/watch?reload=9&v=tSAZQXoq0mU

https://www.youtube.com/watch?v=wnn66Y0Cv7g

Potential Tax Law Changes Coming: What’s the Latest?

The “Build Back Better Act” has several potential tax law changes. With that said, it may be modified by the House Rules Committee and the Senate may come up with a different plan so please realize this is not set in stone. 

Overall, taxes may increase for those with income over $450,000 if Married Filing Joint or $400,000 if filing Single. Those making less may see their taxes decrease.

Long-term capital gains tax rates would increase as of September 14^th (current proposal). This would increase the tax rate to 25% for income over the $450K/$400K listed above. This would affect Goodwill and Non-compete portions if you are selling your practice. Only binding contracts that are in effect at 9/14 would be exempt. Again, this has NOT passed yet.

Ordinary income tax rates may increase to 39% and the lower brackets of 32% and 35% will be compressed. This means that a smaller portion of your income would fall into those brackets so you would jump to a higher bracket sooner.

Net Investment Income Tax of 3.8% will affect more taxpayers. It would tax S corporation flow through income and not only on your W-2 income. This would be effective in 2022.

Those earning over $5 million may have a new 3% surtax and lose some significant deductions such as massive charitable contributions. Again, if you are considering selling your practice or other businesses, we recommend being mindful of the timing if you think it will push your income above the $5 million mark for that year. Again, this would begin in 2022.

No more Roth conversions for those with the higher income listed above and no more Roth IRA “back door” conversions for all income levels. We recommend you complete your conversions by December 31, 2021.

Limited business losses allowed. Joint filers would not be able to use more than $500,000 of business losses to offset non-business income. Single filers would be limited to $250,000. Again, effective in 2022.

“Path Out of the Pandemic” Announcement

President Biden announced several key aspects designed to increase COVID vaccines. Our friends at Bent Ericksen (HR experts for the dental field) sent a summary of these rules that are potentially critical for our dentists.

Announcement Part 1

The Centers for Medicare & Medicaid Services (CMS) is taking action to require COVID vaccinations for workers in most health care settings that receive Medicare or Medicaid reimbursements.

According to the CMS.gov website, “The Biden-Harris Administration will require COVID-19 vaccination of staff within all Medicare and Medicaid-certified facilities to protect both them and patients from the virus and its more contagions Delta variant.”

CMS is developing an Interim Final Rule with Comment Period that will be issued in October. 

CLICK HERE to review more information regarding facilities affected by this announcement.

Until CMS issues their interim Final Rule in October, we (and Bent Erickson) have no further information. We just wanted to give you a heads up. You may want to announce this upcoming new requirement for your office (if applicable) and begin preparing for it. Please educate your employees, encourage and/or incentivize the vaccine and get your staff vaccinated (for those not vaccinated). Once the Rule is issued, we will know more about what to do for those who remain unvaccinated.

Announcement Part 2

This applies to practices subject to federal OSHA with 100 or more employees. Consequently, we are not going further on this, since we have no one we work with who is in this category.

Proud Moment in Gramma Sue's (Dental CPA) Life

I was delighted to have dinner with my family last night. We had ribs, chicken, corn on the cob and all the fixings to have an end of summer dinner together. My 8-year-old granddaughter was eating her third corn on the cob and commented: “As soon as I get home, I need to floss my teeth. I have corn stuck in my teeth!” I was SO proud!

Have a great Autumn, beloved clients of CUAK! Be safe, be healthy, be happy!