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Alexander Thompson Arnold PLLC (ATA) has been recognized as a top regional leader as well as a top firm to watch for 2021 by Accounting Today, maintaining their ranking from the previous year.
Accounting Today releases a publication every year detailing the top 100 accounting firms in the country, firms to look out for, regional leaders, top tax firms and highlights from the previous year relating to the top 100 firms. The roster includes firms with positive growth rates, which landed ATA on the top firms list for the southeast. The report also evaluates a firm in all aspects and not just growth numbers, looking at cutting-edge business practices, which differentiated ATA and put the company on the firms to watch list.
“This achievement shows that the strides we are making to improve our firm and expand our reach are paying off,” said Managing Partner John Whybrew. “Our firm has emphasized working as a team, so this recognition is due to the hard work and improvements we have made together.”
To view the full rankings, click here.
ATA is a long-term business advisor to its clients and provides other services that are not traditionally associated with accounting. For example, Revolution Partners, ATA’s wealth management entity provides financial planning services; ATA Technologies provides trustworthy IT solutions; Sodium Halogen focuses on growth through the design and development of marketing and digital products; Adelsberger Marketing offers video, social media, and digital content for small businesses; and newly added ATAES a comprehensive human resource management agency.
ATA has 13 office locations in Tennessee, Kentucky and Mississippi. Recognized as an IPA Top 200 regional accounting firm, it provides a wide array of accounting, auditing, tax and consulting services for clients ranging from small family-owned businesses to publicly traded companies and international corporations. ATA is also an alliance member of BDO USA LLP, a top-five global accounting firm, which provides additional resources and expertise for clients.
On March 10, 2021, the U.S. House of Representatives passed a modified version of the American Rescue Plan Act of 2021 (ARP bill), President Biden’s $1.9 trillion COVID-19 relief package aimed at stabilizing the economy, providing needed relief to individuals and small businesses, and improving and accelerating the administration of coronavirus vaccines and testing. The House was required to re-vote on the bill after the House version passed on February 27 was modified by the Senate on March 6. The relief package, which is Biden’s first major legislative initiative, is one of the largest in U.S. history and follows on the heels of the Trump Administration’s $900 billion COVID relief package enacted in December 2020 (Consolidated Appropriations Act, 2021 (CAA)).
The House-approved bill will now be sent to President Biden for his signature, and it is expected that the legislation will be enacted before the current supplemental federal unemployment benefits expire on March 14.
The most significant measures included in the Act are the following:
The original House version of the bill included a plan to gradually increase the federal minimum wage to $15/hour. This minimum wage provision was stripped from the Senate version following a ruling by the Senate parliamentarian that the minimum wage provision did not conform to the budget reconciliation rules.
Measures Affecting Individuals
The bill includes several measures to help individuals who have been adversely affected by the impact of the coronavirus pandemic on the economy. The additional round of stimulus checks, in conjunction with supplemental federal unemployment benefits, should provide some measure of relief to individuals. A temporarily enhanced child tax credit offers another area of assistance.
Cash Payments
Immediate cash relief will be granted to individuals and families in the form of new stimulus payments. While a $1,400 stimulus check (compared to the $600 under the CAA) will be paid to qualifying individuals and their dependents, the final version of the bill was narrowed by the Senate as a compromise to accommodate concerns of certain members and to secure votes, with the result that fewer taxpayers will receive a stimulus payment than was the case with the previous stimulus checks. The relief payments are expected to start shortly after President Biden signs the bill.
Under the final bill, individuals earning up to $75,000, single parents earning $112,500 and couples earning up to $150,000 are eligible for the $1,400 check, with the amount decreasing for individuals making between $75,000 and $80,000. Individuals earning more than $80,000, single parents earning $120,000 and couples earning more than $160,000 are disqualified from receiving stimulus checks. The House version of the bill would have allowed single taxpayers earning up to $100,000, single parents earning up to $150,000 and couples earning up to $200,000 to have qualified for the $1,400 payment.
An additional $1,400 check will be sent to each dependent of the taxpayer, including adult dependents (e.g., college students, parents). The previous two stimulus payments limited the additional checks to dependent children 16 years old or younger.
The amount of the stimulus check will be based on information in the taxpayer’s 2020 tax return if it has been filed and processed; otherwise, the 2019 return will be used. The amount of the check will not be taxable income for the recipient.
Extended Unemployment Benefits
The current weekly federal unemployment benefits (which apply in addition to any state unemployment benefits) of $300 will be extended through September 6, 2021; the Senate cut back the $400 that would have applied through August 29 under the House version. Additionally, the first $10,200 of unemployment insurance received in 2020 would be nontaxable income for workers in households with income up to $150,000.
The extension also covers the self-employed and individual contractors (e.g., gig workers) who typically are not entitled to unemployment benefits.
Child Tax Credit
The child tax credit will be expanded considerably for 2021 to help low- and middle-income taxpayers (many of the same individuals who will be eligible for stimulus checks), and the credit will be refundable.
The amount of the credit will increase from the current $2,000 (for children under 17) to $3,000 per eligible child ($3,600 for a child under age six), and the $3,000 will be available for children that are 17 years old. The increase in the maximum amount will phase out for heads of households earning $112,500 ($150,000 for couples).
Because the enhanced child tax credit will be fully refundable, eligible taxpayers will receive a check for any credit amount not used to offset the individual’s federal income tax liability. Part of the credit will be paid in advance by the IRS during the period July through December 2021 so that taxpayers do not have to wait until they file their tax returns for 2021.
Child and Dependent Care Tax Credit
The Child and Dependent Care Tax Credit will be expanded for 2021 to cover up to 50% of qualifying childcare expenses up to $4,000 for one child and $8,000 for two or more children for 2021 (currently the credit is up to 35% of $3,000 for one child or 35% of $6,000 for two or more children). The credit will be refundable so that families with a low tax liability will be able to benefit; the refund will be fully available to families earning less than $125,000 and partially available for those earning between $125,000 and $400,000.
Earned Income Tax Credit (EITC)
The EITC will be expanded for 2021 to ensure that it is available to low paid workers who do not have any children in the home. The maximum credit will increase from about $530 to about $1,500, and the income cap to qualify for the EITC will go from about $16,000 to about $21,000. Further, the EITC will be available to individuals age 19-24 who are not full-time students and those over 65.
Measures Affecting Businesses
The ARP bill contains provisions designed to assist small businesses, in particular.
Small Businesses and Paycheck Protection Program
An additional $7.25 billion is allocated to assist small businesses and for the Paycheck Protection Program (PPP) forgiven loans. The current eligibility rules remain unchanged for small businesses wishing to participate in the PPP, although there is a provision that will make more non-profit organizations eligible for a PPP loan if certain requirements are met.
The PPP—which was originally created as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted on March 27, 2020—is designed to help small businesses that have suffered from the disruptions and shutdowns related to the coronavirus pandemic and keep them operational by granting federally guaranteed loans to be used to retain staff at pre-COVID levels. A PPP loan may be forgiven in whole or in part if certain requirements are met.
The Economic Aid Act, which is part of the CAA, had earmarked an additional $284 billion for PPP loans, with specific set asides for eligible borrowers with no more than 10 employees or for loans of $250,000 or less to eligible borrowers in low- or moderate-income neighborhoods. The program ends the earlier of March 31, 2021 (the application period under the PPP is not extended under the ARP bill) or the exhaustion of the funds—additional funds are now allocated under the ARP bill.
It should be noted that the Biden Administration recently designated the 14-day period between February 24 and March 10, 2010 for businesses and nonprofits with fewer than 20 employees to apply for a PPP loan.
Employee Retention Credit
The ERC, originally introduced under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and enhanced under the CAA, aims to encourage employers (including tax-exempt entities) to keep employees on their payroll and continue providing health benefits during the COVID-19 pandemic. The ERC is a refundable payroll tax credit for wages paid and health coverage provided by an employer whose operations were either fully or partially suspended due to a COVID-19-related governmental order or that experienced a significant reduction in gross receipts.
The CAA extended the eligibility period of the ERC to June 30, 2021, increased the ERC rate from 50% to 70% of qualified wages and increased the limit on per-employee wages from $10,000 for the year to $10,000 per quarter ($50,000 per quarter for start-up businesses). The new bill extends the ERC for another six months to December 31, 2021 under the same terms as provided in the CAA.
Other Measures
For more information, contact your ATA representative at https://ata.cpa/locations.
ATA has increased its ranking from 147 to 136 on the 2020 INSIDE Public Accounting (IPA) Top 200 Firms list. This accolade is deemed by the IPA Annual Survey and Analysis of Firms.
IPA 100, 200, and 300 firms are ranked by U.S. net revenues and are compiled by analyzing the more than 550 responses received this year for IPA’s Survey and Analysis of Firms. This is IPA’s 30th annual ranking of the largest accounting firms in the nation.
“It’s a goal of ATA’s to expand our footprint. Over the last several years, our firm has focused on bringing additional service offerings to the markets we serve,” said John Whybrew, managing partner of ATA. “Thank you to our clients and business partners who have helped contribute to our success. We look forward to continuing our services with you,” said Whybrew.
This is an unprecedented time in the accounting industry. With the many changes that took place in early 2020, ATA has proven to be agile and adaptive through these unique circumstances. Continued growth and flexibility while working with clients during this time has proven ATA can arise to any challenge.
As the future arrives, ATA understands its need and responsibility to stay ahead of the curve as new trends and innovative approaches hit the accounting industry. ATA will continue to improve and expand the services that are offered as well as strategically grow its office footprint.
INSIDE Public Accounting (IPA), founded in 1987, is published by The Platt Group. The Platt Group publishes both the award-winning INSIDE Public Accounting newsletter and the award-winning National Benchmarking Report, along with other key reports on the profession. The Platt Group assists firms to become more successful through a variety of services.
ATA has 14 office locations in Tennessee, Kentucky, and Mississippi. Recognized as an IPA Top 200 regional accounting firm, we provide a wide array of accounting, auditing, tax and consulting services for clients ranging from small family-owned businesses to publicly traded companies, and international
corporations. ATA is also an alliance member of BDO USA, LLP, a top five global accounting firm, which allows us to utilize their resources and expertise for clients.
If your business was fortunate enough to get a Paycheck Protection Program (PPP) loan taken out in connection with the COVID-19 crisis, you should be aware of the potential tax implications.
The Coronavirus Aid, Relief and Economic Security (CARES) Act, which was enacted on March 27, 2020, is designed to provide financial assistance to Americans suffering during the COVID-19 pandemic. The CARES Act authorized up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized additional PPP funding and it’s possible more relief could be part of another stimulus law. The PPP allows qualifying small businesses and other organizations to receive loans with an interest rate of 1%. PPP loan proceeds must be used by the business on certain eligible expenses. The PPP allows the interest and principal on the PPP loan to be entirely forgiven if the business spends the loan proceeds on these expense items within a designated period of time and uses a certain percentage of the PPP loan proceeds on payroll expenses.
An eligible recipient may have a PPP loan forgiven in an amount equal to the sum of the following costs incurred and payments made during the covered period: Payroll costs; Interest (not principal) payments on covered mortgage obligations (for mortgages in place before February 15, 2020); Payments for covered rent obligations (for leases that began before February 15, 2020); and Certain utility payments. An eligible recipient seeking forgiveness of indebtedness on a covered loan must verify that the amount for which forgiveness is requested was used to retain employees, make interest payments on a covered mortgage, make payments on a covered lease or make eligible utility payments.
In general, the reduction or cancellation of non-PPP indebtedness results in cancellation of debt (COD) income to the debtor, which may affect a debtor’s tax bill. However, the forgiveness of PPP debt is excluded from gross income. Your tax attributes (net operating losses, credits, capital and passive activity loss carryovers, and basis) wouldn’t generally be reduced on account of this exclusion.
The IRS has stated that expenses paid with proceeds of PPP loans can’t be deducted because the loans are forgiven without you having taxable COD income. Therefore, the proceeds are, in effect, tax-exempt income. Expenses allocable to tax-exempt income are nondeductible because deducting the expenses would result in a double tax benefit. However, the IRS’s position on this issue has been criticized and some members of Congress have argued that the denial of the deduction for these expenses is inconsistent with legislative intent. Congress may pass new legislation directing IRS to allow deductions for expenses paid with PPP loan proceeds.
Be aware that leaders at the U.S. Treasury and the Small Business Administration recently announced that recipients of Paycheck Protection Program (PPP) loans of $2 million or more should expect an audit if they apply for loan forgiveness. This safe harbor will protect smaller borrowers from PPP audits based on good faith certifications. However, government leaders have stated that there may be audits of smaller PPP loans if they see possible misuse of funds. Contact us with any further questions you might have on PPP loan forgiveness. © 2020
The State of Tennessee is making $200 million available for small businesses through the Tennessee Business Relief Program. The relief funds are intended for businesses that suffered during the mandatory business closures in the midst of COVID-19 shutdowns.
More details are to come, but the relief program anticipates about 28,000 Tennessee small businesses to qualify, with more than 73% of those businesses earning annual gross sales of $500,000 or less. Allocations are based on the annual gross sales of the business.
Furthermore, the following small businesses may qualify if their sales were at least 25% lower on their April sales tax returns, which should have been filed in May:
ATA is keeping up-to-date on details as they are released. You can visit our COVID-19 Resource Page for information. Visit Tennessee Business Relief Program for FAQ about the funds.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act eliminates some of the tax-revenue-generating provisions included in a previous tax law. Here’s a look at how the rules for claiming certain tax losses have been modified to provide businesses with relief from the novel coronavirus (COVID-19) crisis.
Basically, you may be able to benefit by carrying a net operating loss (NOL) into a different year — a year in which you have taxable income — and taking a deduction for it against that year’s income. The CARES Act includes favorable changes to the rules for deducting NOLs. First, it permanently eases the taxable income limitation on deductions. Under an unfavorable provision included in the Tax Cuts and Jobs Act (TCJA), an NOL arising in a tax year beginning in 2018 and later and carried over to a later tax year couldn’t offset more than 80% of the taxable income for the carryover year (the later tax year), calculated before the NOL deduction.
As explained below, under the TCJA, most NOLs arising in tax years ending after 2017 also couldn’t be carried back to earlier years and used to offset taxable income in those earlier years. These unfavorable changes to the NOL deduction rules were permanent — until now. For tax years beginning before 2021, the CARES Act removes the TCJA taxable income limitation on deductions for prior-year NOLs carried over into those years. So NOL carryovers into tax years beginning before 2021 can be used to fully offset taxable income for those years.
For tax years beginning after 2020, the CARES Act allows NOL deductions equal to the sum of: 100% of NOL carryovers from pre-2018 tax years, plus the lesser of 100% of NOL carryovers from post-2017 tax years, or 80% of remaining taxable income (if any) after deducting NOL carryovers from pre-2018 tax years. As you can see, this is a complex rule. But it’s more favorable than what the TCJA allowed and the change is permanent.
Under another unfavorable TCJA provision, NOLs arising in tax years ending after 2017 generally couldn’t be carried back to earlier years and used to offset taxable income in those years. Instead, NOLs arising in tax years ending after 2017 could only be carried forward to later years. But they could be carried forward for an unlimited number of years. (There were exceptions to the general no-carryback rule for losses by farmers and property/casualty insurance companies). Under the CARES Act, NOLs that arise in tax years beginning in 2018 through 2020 can be carried back for five years. Important: If it’s beneficial, you can elect to waive the carryback privilege for an NOL and, instead, carry the NOL forward to future tax years.In addition, barring a further tax-law change, the no-carryback rule will come back for NOLs that arise in tax years beginning after 2020.
These favorable CARES Act changes may affect prior tax years for which you’ve already filed tax returns. To benefit from the changes, you may need to file an amended tax return. Have questions? Contact us on our leadership page. © 2020
The coronavirus (COVID-19) pandemic has affected many Americans’ finances. Here are some answers to questions you may have right now.
My employer closed the office and I’m working from home. Can I deduct any of the related expenses? Unfortunately, no. If you’re an employee who telecommutes, there are strict rules that govern whether you can deduct home office expenses. For 2018–2025 employee home office expenses aren’t deductible. (Starting in 2026, an employee may deduct home office expenses, within limits, if the office is for the convenience of his or her employer and certain requirements are met.) Be aware that these are the rules for employees. Business owners who work from home may qualify for home office deductions.
My son was laid off from his job and is receiving unemployment benefits. Are they taxable? Yes. Unemployment compensation is taxable for federal tax purposes. This includes your son’s state unemployment benefits plus the temporary $600 per week from the federal government. (Depending on the state he lives in, his benefits may be taxed for state tax purposes as well.) Your son can have tax withheld from unemployment benefits or make estimated tax payments to the IRS.
The value of my stock portfolio is currently down. If I sell a losing stock now, can I deduct the loss on my 2020 tax return? It depends. Let’s say you sell a losing stock this year but earlier this year, you sold stock shares at again. You have both a capital loss and a capital gain. Your capital gains and losses for the year must be netted against one another in a specific order, based on whether they’re short-term (held one year or less) or long-term (held for more than one year). If, after the netting, you have short-term or long-term losses (or both), you can use them to offset up to $3,000 ordinary income ($1,500 for married taxpayers filing separately). Any loss in excess of this limit is carried forward to later years, until all of it is either offset against capital gains or deducted against ordinary income in those years, subject to the $3,000 limit.
I know the tax filing deadline has been extended until July 15 this year. Does that mean I have more time to contribute to my IRA? Yes. You have until July 15 to contribute to an IRA for 2019. If you’re eligible, you can contribute up to $6,000 to an IRA, plus an extra $1,000 “catch-up” amount if you were age 50 or older on December 31, 2019.
What about making estimated payments for 2020? The 2020 estimated tax payment deadlines for the first quarter (due April 15) and the second quarter (due June 15) have been extended until July 15, 2020.
Need help? These are only some of the tax-related questions you may have related to COVID-19. Contact one of our experts if you have other questions or need more information about the topics discussed above or email info@atacpa.net. ©2020
*As of 4-28-20
View this updated PPP loan forgiveness workbook that can benefit your business. Consider gathering as much information as possible now by using the PPP loan forgiveness data collection form. Click here to download the spreadsheet.