Frequently Asked Questions
We’ve shared some of our most frequently asked questions as a guide.
Tax & Accounting Services
What services do accountants at Considine & Considine offer?
Our accountants provide a multitude of services, including preparing financial statements and tax returns, business valuations, succession planning, and other worrisome challenges involving the planning of your lives.
What documents are needed for tax preparation?
Arranging documents for the preparation of taxes is individual or corporation specific. At Considine & Considine, we provide clients with a tax organizer to gather information, complete and get back to us. We need copies of all tax documents not limited to W-2’s, 1099’s, and 1098’s. For businesses, provide electronic records of payroll accounts, loan documents and agreements, and bank statements. Utilize the tax organizer to the best of your ability, and an accounting expert will advise you if records are missing.
What documents do tax preparers need to keep?
Documentation needs vary from person to person and business to business. We ask clients to bring forms listed on the tax organizer that we provide. Retention is also required for both taxes and other relevant supporting tax documents.
What is a tax examination, or tax audit?
An IRS audit is a review/examination of an organization’s or individual’s accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct.
What is the difference between a financial statement, compilation, review and audit?
What types of audit services does Considine perform?
Considine & Considine provides a wide variety of auditing services including financial statement audits of for profit entities and non-profit organizations, government and single audits (formerly known as A-133 audits), HUD audits, and audits of 401k and 403b retirement plans.
What is a defined benefit plan?
A defined benefit plan is a retirement plan where employers follow a method that guarantees retirement benefits and tax incentives for employees. At Considine & Considine, we customize your plan to meet IRS requirements and provide benefits to you and your employees through our proactive approach to meet your needs.
What is a qualified retirement plan?
Qualified retirement plans are IRS approved plans provided by employers. Our experts can discover unique benefits and ensure you comply with federal regulations through attentive and efficient plan selections.
What is a 457(b) retirement plan?
457(b) retirement plans are tax-deferred retirement plans typically intended for state and local government and, in some cases, non-profit organizations. At Considine & Considine, we look for options that can potentially increase your savings tax-free.
Which retirement plans offer tax benefits?
The retirement plans that offer tax benefits are Traditional and Roth IRA, Simple IRA, SEP IRA, 401(k), 403(b) 457(b) plans. These depend on several factors, including income and tax benefits that are unique to the individual.
Are 401(k) plans tax deductible?
Yes, 401(k) plans are tax-deductible.
Business Tax Services
How does the business tax work?
Depending on the structure of your business, you may be responsible for local, state, and federal taxes. At Considine & Considine, we are committed to timely and accurate tax solutions to see where you fall under the business tax requirements.
Does my small business need to file a tax return?
All businesses must file a tax return, although some companies may not have to pay directly to the IRS. Our business tax department provides services to help your business succeed and file taxes correctly.
How long should I keep business tax returns?
Tax returns should be kept forever. They do not have to be hard copies but can be transferred to a digital file instead.
Estate & Trusts
What is estate planning?
Estate planning is the control of a person’s money, property, and assets during their life and after they have passed away. Our estate planning experts strive to give you peace of mind; knowing your beneficiaries and assets will be protected.
Tax Return Due Dates
Due to COVID-19, the government has extended the personal tax return deadline to July 15th, 2021. You may apply for an extension if you can’t file by this deadline.
When are personal property taxes due?
Due to COVID-19, California counties have canceled penalties and other charges for homeowners, small businesses, and other property owners who can not pay property taxes due to COVID-19; this is on a case-by-case basis. Typically there are two installment due dates for property taxes, the first one is December 10th, and the last is April 10th of the following year.
When are business taxes due?
Tax returns for Corporations and Partnerships, Forms 1120, 1120S and 1065 with years ending December 31, 2019 are due July 15, 2021 due to the COVID-19 extension. In all other years, calendar year end business returns are due March 15th for Forms 1120S and 1065 and April 15th for form 1120.
When are trust tax returns due?
Trust tax returns can be completed by July 15th, 2021, due to the coronavirus emergency. You may file for an extension if you can’t file by that deadline.
Paycheck Protection Program Loans
PPP stands for Payment Protection Program. This loan is intended to cover the payroll costs of businesses affected by COVID-19, although it can also be used for other business expenses, discussed below. Included in the PPP loan calculation are payroll costs, including W-2 wages for employees and benefits such as paid sick leave, health insurance and retirement plans. The wages considered for the PPP loan are capped at $100,000 on an annualized basis for each employee, otherwise the loan is calculated as 2.5 times the average monthly payroll costs paid in 2019.
Who is eligible?
All businesses, including nonprofits, veterans organizations, Tribal business concerns and sole proprietorships, with 500 or fewer employees can apply for the PPP loan.
What do I use this loan for?
- Payroll costs, including benefits;
- Interest on mortgage obligations, incurred before February 15, 2020;
- Rent, under lease agreements in force before February 15, 2020; and
- Utilities, for which service began before February 15, 2020.
What counts as payroll costs?
- Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
- Employee benefits, including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
- State and local taxes assessed on compensation; and
- For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.
How much of the loan needs to be allocated to covering wages?
In June, new legislation was passed and signed, lowering the minimum loan amount required to be spent on payroll from 75% to 60%.
What time period should borrowers use to determine their payroll costs to calculate their maximum loan amounts?
Payroll costs are based on the average monthly payroll costs incurred in 2019. For seasonal employees it is the average monthly payroll costs for the 12-week period beginning February 15, 2019 or March 1, 2019, and ending June 30, 2019.
How long do I have to use the PPP Funds in order to apply for forgiveness?
You have an option of 8 weeks or 24 weeks if you received your loan before June 5, 2020. For loans received after June 5, 2020 you must use the 24 weeks for calculating loan forgiveness. The period begins on the date of the first distribution of funds, or the first day of the first pay period following distribution.
When do I have to pay back the loan?
The PPP loan payment will be deferred for ten months after the end of the 8 or 24 week period. Interest on the loan is 1%. The repayment period has been extended from 2 years to 5 years as of June 2020. However, a portion of the loan is eligible for forgiveness.
The forgivable amount is the sum of the following costs incurred and payments made during the 8 or 24 week period:
- The loan proceeds are used to cover payroll costs;
- Most mortgage interest, rent, and utility costs over the 8 or 24 week period after the loan is made;
Full-time equivalent employee levels as well as compensation amounts must be maintained to prevent a decrease in forgiveness.
Here are the caveats:
- If you reduce your full-time employees (FTEs) from the average number of FTEs calculated from January 1, 2020 through February 29, 2020, your loan forgiveness will be reduced.
- If you decrease your salaries and wages by more than 25% for an employee that made less than $100,000 in 2019, your loan forgiveness will be reduced.
What if I have had to furlough or lay off employees? How does that affect my loan forgiveness?
You have until December 31st, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.