Developing News: 2020

On September 17, 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-07, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets.

Contributed nonfinancial assets, also known as gifts-in-kind (GIK), can include fixed assets, such as land, buildings, and equipment; use of fixed assets or utilities; materials and supplies, such as food, clothing, and pharmaceuticals; and intangible assets and/or recognized contributed services.

The new ASU was issued to address concerns some stakeholders had about the lack of transparency in the financial statements regarding the amount of GIK received and used in an entity’s programs and other activities.

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The King County Treasurer’s Office has informed taxpayers that, despite extending the April 30th payment deadline for first-half 2020 property tax bills, it will not extend the October 31st payment deadline for second-half 2020 property tax bills. Instead, King County is offering payment plans to all delinquent taxpayers for the full 2020 tax year. If a payment plan is established before the end of November 2020, the taxpayer will avoid the 8% penalty that would otherwise be assessed on 2020 taxes unpaid as of December 1st.

How the Payment Plan Works

Payment plans for the 2020 tax year can extend payment for up to 18 months;

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Tax Relief to Help Employees with COVID-19 Expenses

COVID-19 has upended our daily lives, and many companies are searching for ways to aid their employees through the ongoing challenges of the moment. Thankfully, there is a little-known tax provision (IRC Section 139) which provides for disaster relief payments that can help employers support their workers.

In a federally declared disaster, IRC Section 139 allows employers to provide employees with disaster assistance on a tax-free basis to the employee, and the employer receives a tax deduction as well.

About the Provision

On March 13, 2020, President Trump issued an emergency declaration under the Robert T.

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For business and occupation (“B&O”) tax purposes, taxpayers earning apportionable revenue calculate their taxable Washington revenue by applying a “receipts factor” apportionment methodology. Taxpayers computing B&O tax in this manner are required to complete and file an Annual Reconciliation of Apportionable Income form with the Department of Revenue.

When is the Annual Reconciliation of Apportionable Income Form Due?

The form must be submitted to the Department of Revenue by October 31st of each year. Failure to timely file the reconciliation form may result in penalties.

Who Must File?

In-state taxpayers that earn income from apportionable business activities performed for customers located inside and outside of Washington may apportion such revenue to Washington for B&O tax purposes.

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QuickBooks is an effective accounting system for many companies. But our clients consistently ask us, “When do I need a new accounting system?,” and our answer is usually, “It depends!”

Unfortunately, there is not one specific trigger, such as a budget threshold, asset size, or type of entity, that signals it’s time to upgrade an accounting system. We’ve seen simple businesses with a $20 million budget effectively use QuickBooks, and we’ve seen businesses with a $5 million budget upgrade to a more robust system in order to meet complex reporting requirements. The decision to explore a new accounting or ERP system is a combination of factors where the benefits of change outweigh the financial cost,

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This article was originally posted on 8/19/2020. It has been updated to reflect news and updates as of 3/9/2021. 

On July 6, 2020, the Seattle City Council passed City Ordinance Number 126108, imposing a payroll expense tax on persons engaging in business in Seattle. The ordinance takes effect at the start of 2021 and sunsets at the end of 2040. The tax will be imposed on businesses and organizations with at least $7 million of Seattle annual “payroll expense.”

Filing Frequency

The 2021 payroll expense tax annual return and payment will be due January 31,

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One of the perennial challenges faced by taxing authorities is identifying and contacting individuals and businesses who are unaware (or purposefully ignorant) of the tax filing obligations they may have. In an effort to encourage unregistered taxpayers with outstanding excise tax liabilities for prior periods to come forward and voluntarily register with the Washington Department of Revenue (DOR), the DOR offers a Voluntary Disclosure Agreement (VDA) Program that includes the following benefits:

  • a limited “look back” period on previous liabilities of four years plus the current year (the period open under the traditional statute of limitations for taxpayers registered with the DOR);

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April 8, 2021 Update: The Legislature has enacted a specific exemption from the B&O tax for qualifying grants received on or after February 29, 2020. Read more here

The Washington State Department of Revenue (DOR) recently published guidance regarding its view on whether federal COVID-19 related financial assistance is subject to the Business & Occupation (B&O) tax (including loan forgiveness under the Paycheck Protection Program [PPP]).

According to the guidance, the DOR indicates that it does not believe the financial assistance is includable in the measure of the B&O tax, and that taxpayers should not report such amounts.

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As outlandish as this may sound, if you receive a debit card in the mail with a note saying it’s your stimulus payment, it may not be a scam.

The Treasury Department has recently confirmed it is distributing some Economic Impact Payments through prepaid debit cards mailed to taxpayers. They estimate nearly four million Americans will receive their economic relief payment via this method.

What to Look For

If you are expecting a payment and have not yet received it, take a closer look at the mail you collect in the coming days – or check your recycle bin.

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To provide accounting relief during the COVID-19 crisis, the FASB, in its board meeting held on May 20, 2020, approved the proposal to delay the effective date for Revenue Recognition, Topic 606.

The postponed effective date applies for franchisors that are not public business entities. This deferral will provide the Board with time to develop a practical expedient to address franchisors’ primary implementation issue regarding initial franchisee fee revenue recognition.

The FASB also expanded the scope of deferral to include all entities that have not yet adopted the guidance. This includes entities that have not yet issued financial statements or made their financial statements available for issuance reflecting the adoption of Topic 606.

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