Time is running short for taxpayers who requested an extra six months to file their 2021 tax return. As a reminder, Monday, October 17, 2022, is the extension deadline for most taxpayers. Taxpayers are encouraged to file a complete and accurate return electronically as early as possible once they have gathered all their information. There’s no need to wait until the October deadline.

For those still waiting on their 2020 tax return to be processed, here’s a tip to help with e-filing a 2021 tax return: To validate and successfully submit an electronically filed tax return to the IRS, taxpayers need their Adjusted Gross Income, or AGI, from their most recent tax return. Those waiting on their 2020 tax return can still file their 2021 return by entering $0 for their 2020 AGI on their 2021 tax return. Remember, if using the same tax preparation software as last year, this field will auto-populate.

For taxpayers who have not yet filed, here are a few things to keep in mind about the extension deadline and taxes:

1. Taxpayers can still e-file returns. Electronic filing is the easiest, safest, and most accurate way to file taxes. Taxpayers who haven’t filed a 2021 tax return yet – including extension filers – can file electronically any time before the October deadline and avoid the last-minute rush to file.

2. Choose direct deposit. For taxpayers owed a refund, the fastest way to get it is to combine direct deposit and e-file. The IRS processes most e-filed returns and issues direct deposit refunds in less than three weeks.

3. Taxpayers who owe taxes should consider using IRS Direct Pay, a simple, quick, and free way to pay from a checking or savings account using a computer or mobile device. There are also other online payment options. Please call the office if you need details about other payment options.

4. Members of the military and those serving in a combat zone generally get more time to file. Military members typically have until at least 180 days after leaving a combat zone to file returns and pay any tax due.

5. Taxpayers should always keep a copy of tax returns for their records. Keeping copies of tax returns can help taxpayers prepare future tax returns or assist with amending a prior year’s return.

San Jose: (408) 252-1800

Watsonville: (831) 726-8500

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Keeping full and accurate homeowner records is not only vital for claiming deductions on your tax return, but also for determining the basis or adjusted basis of your home. These records include your purchase contract and settlement papers if you bought the property, or other objective evidence if you acquired it by gift, inheritance, or similar means. You should also keep any receipts, canceled checks, and similar evidence for improvements or other additions to the basis.

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The Inflation Reduction Act (IRA), signed into law on August 16, 2022, includes tax provisions affecting businesses, individuals, the clean-energy industry, healthcare, and more. Let’s take a look:

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Small employer HRAs or QSEHRAs (Qualified Small Employer Health Reimbursement Arrangements) allow small businesses without group health plans to set aside money, tax-free, for employees to use toward medical expenses – including the cost of buying health insurance. Here’s what small business owners need to know about QSEHRAs.

Background

Included in the 21st Century Cures Act enacted by Congress on December 13, 2016, was a provision for QSEHRAs, which permit an eligible employer to provide a qualified small employer health reimbursement arrangement (QSEHRA), which is not a group health plan and thus is not subject to the requirements that apply to group health plans.

QSEHRAs must meet several criteria such as:

• The arrangement is funded solely by an eligible employer, and no salary reduction contributions may be made under the arrangement;
• The arrangement generally is provided on the same terms to all eligible employees of the employer;
• The arrangement provides, after the employee provides proof of coverage, for the payment or reimbursement of medical expenses incurred by the employee or the employee’s family members; and
• The amount of the payments and reimbursements for any year do not exceed inflation-adjusted amounts for payments and reimbursements of expenses. For 2022, the maximum dollar amount for employee-only arrangements is $5,450. The maximum dollar amount for arrangements that provide for payments and reimbursements for expenses of family members is $11,050.

Which Employers Qualify?

Any small employer from a startup to a nonprofit that doesn’t offer a group health plan is able to set up a QSEHRA as long as they meet certain rules (see below). Small employers are defined as an employer that is not an applicable large employer (ALE). An applicable large employer is defined as one that employs more than 50 full-time workers, including full-time equivalent employees, on average.

If a small employer currently offers a group health plan but wants to set up a QSEHRA, the group health plan must be canceled before the QSEHRA will start.

Are There Any Other Rules?

Yes. One of the most important rules is that in order for employees to participate in a QSEHRA, they must have health insurance that meets minimum essential coverage. That is, indemnity, short-term health insurance, and faith-based insurance plans (e.g., Liberty HealthShare) do not qualify. Health insurance plans purchased through the Marketplace meet this qualification. Employers may choose whether to reimburse employees for both medical expenses and health insurance premiums or just premiums.

Furthermore, while there are no minimum monthly contribution limits, there is an annual maximum contribution limit. For 2022, the limit is $454.16 per month for individuals and $920.83 per month for families.

QSEHRAs are funded entirely by the employer. As such, employees are prohibited from making contributions.

Written Notice to Employees

Eligible employers are required to provide written notice to eligible employees at least 90 days before the beginning of a year for which the QSEHRA is provided. In the case of an employee who is not eligible to participate in the arrangement as of the beginning of the year, the written notice must be furnished on the date on which the employee is first eligible. The written notice must include:

1. A statement of the amount that would be the eligible employee’s permitted benefit under the arrangement for the year;
2. A statement that the eligible employee should provide that permitted benefit amount to any health insurance exchange to which the employee applies for advance payments of the premium tax credit; and
3. A statement that if the eligible employee is not covered under minimum essential coverage for any month, the employee may be liable for an individual shared responsibility payment (eliminated for tax years starting in 2019) for that month and reimbursements under the arrangement may be includible in gross income.

Questions About QSEHRAs?

If you have any questions about QSEHRAs or are wondering whether your small business would benefit from a QSEHRA, don’t hesitate to call.

San Jose: (408) 252-1800

Watsonville: (831) 726-8500

CPA Firm Experience Required

SUMMARY: 

The Senior Accounting Manager will be a professional with strong accounting skills to be responsible for the firm accounting and a variety of financial functions including the month-end close, hands on day to day accounting operations (G/L and A/P), accounting research, and  process improvements. The Accounting Manager is expected to function at a high level of expertise and competency and use sound judgment while producing consistent results. Problem solving and initiative, with a strong desire to analyze, investigate, and resolve are essential elements for success in this position.  This position may also include Audit Services and or Client Accounting Services. 

RESPONSIBILITIES:

• Ownership of the monthly accounting close.
• Review and/or preparation of monthly journal entries and supporting schedules/reconciliations, including areas such as accruals and A/P, payroll, bank, pre-paids, fixed assets, income tax and credit cards.
• P&L/Balance Sheet fluctuation analysis
• Bank Accounts and Purchase Order process management
• Participation in continuous process improvements to streamline, document, and automate processes as well as enhance internal controls
• Accounting research
• Perform all general ledger reconciliations
• Perform all journal entries and adjustments
• Oversee the A/R and A/P process
• Perform all fixed assets and depreciation schedules 
• Bring books through close and financial statements 
• Provide reporting to Partner group 
• Responsible for all day at day accounting activities 

EDUCATION and/or EXPERIENCE

• Ten plus years public accounting/ industry experience working in accounting
• BA/BS in Accounting, Finance or related field
• CPA License preferred but not required
• Strong working knowledge of U.S. GAAP and internal controls
• Strong ability to meet and exceed deadlines 
• Manage multiple items at once and meet and exceed expectations 
• Experience with multiple accounting systems 
• Strong organizational skills
• Part-time or Full-time 

OTHER SKILLS/ABILITIES

• Solid attention to detail with excellent communication and organizational skills.
• Able to multi-task and manage conflicting priorities while resolving problems quickly.
• Able to react to change productively and handle other essential tasks as assigned.

About Wheeler:

We’re not your typical CPA firm. Yes, we provide audit, tax, consulting, and technology services to a wide range of clients― but we do it differently. We’ve got the dynamic culture of a startup, with the stability and reputation of company of nearly four decades. We’re creative. We’re problem solvers. We’re calculated risk takers. We believe in having a healthy life-work balance, giving back to our community, and having fun. Consistently named a “Best Accounting Firms to Work For” by Accounting Today, we strive to create a unique and rewarding environment for our team.

Location:
San Jose or Watsonville, California

Please e-mail resume and cover letter to resumes@wheelercpa.com

Beginning June 30th, 2022 the CalSavers Mandate required employers in California with 5 or more employees to sponsor a retirement plan for their workers. This August, Senate Bill 1126 was signed into law, which extends the requirement to any employer with at least one employee. This now applies the mandate to most employers in the state, who will have until December 31, 2025 to register.

CalSavers is California’s retirement savings program aimed at the workers who don’t currently have a way to save for retirement. If employers don’t provide their own retirement plan, they must offer their workers CalSavers, the state-operated retirement savings plan. Failure to provide either will result in fines for the employer.

Questions about the CalSavers Mandate changes? Don’t hesitate to contact the office!

San Jose: (408) 252-1800

Watsonville: (831) 726-8500

On Saturday, August 27, the thirteenth annual JL Challenge was held at Spring Hills Golf Course. This is the annual fundraising event for the Jerry Loyola Foundation whose mission is to provide quality of life support for families battling cancer and promote junior golf within the community. The foundation honors the memory of Jerry Loyola, a great young man and talented golfer with a promising future ahead of him. Jerry lost his battle with cancer in 2009 at the tender age of 24. Wheeler Accountants’ Dennis Campbell has supported this organization by providing income tax preparation services since its inception. The firm has continued this tradition since 2017 and is recognized as a major sponsor.

The format for this event was a three player scramble, with Team Wheeler consisting of Steve Stringari, Michael Gurr and Dennis Campbell. In the gross flight, there was a tie for first place with a 14 under par score of 57. Rudy Ortega, Scott Ogden and Kenny Mensch were declared winners by a scorecard playoff over Gary Yoro, Jack Hoenes and Ryan Mock. The net flight was won by Andy Rogers, Bill Mullins and Todd Glo with a net score of 58.

Since the Covid-19 social distancing protocols have been relaxed, the event was able to return to a shotgun start and featured a raffle, live auction and a dinner catered by D’La Colmena. The event, once again, was a huge success and enabled the foundation to continue its mission. The individual event known as the “Battle for the Belt” will be held later in the year.

It was a great sunny enjoyable day for all who participated. The tradition of this event and its support for this great cause will continue in our community for many years to come!

With plentiful opportunities for teen employment this year, now is the perfect time to consider opening a Roth IRA for your minor child. Here’s what you need to know.

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A cash windfall is any amount of money that you didn’t expect to receive and is over your regular income. Most would consider it to be any amount over $1,000 – and quite often, the amount of money is much more than that. For example, you may have received a bonus at work, an inheritance, a legal settlement, a profit from selling a property or business, or won the lottery.

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When someone dies, their surviving spouse or representative must file a final tax return for the deceased person or decedent. Usually, the representative filing the final tax return is named in the person’s will or appointed by a court. Sometimes when there isn’t a surviving spouse or appointed representative, a personal representative will file the final return. Other than noting that the person has died on the final tax return, the IRS doesn’t need any other notification of the death.

Three Things Taxpayers Should Know About Filing the Final Return:

1. The IRS considers someone married for the entire year that their husband or wife died if they don’t remarry during that year.
2. The surviving spouse is eligible to use filing status married filing jointly or married filing separately.
3. The final return is due by the regular April tax date unless the surviving spouse or representative has an extension to file.

Who Signs the Return?

When e-filing, the surviving spouse or representative should follow the directions provided by the software for the correct signature and notation requirements. For paper returns, the filer should write the word deceased, the deceased person’s name and the date of death across the top. Here’s who should sign the return:

Appointed representative. Any appointed representative must sign the return. If it’s a joint return, the surviving spouse must also sign it.

Surviving spouse. If there isn’t an appointed representative, the surviving spouse filing a joint return should sign the return and write in the signature area labeled, filing as surviving spouse.

No appointed representative and no surviving spouse. If there’s no appointed representative and no surviving spouse, the person in charge of the deceased person’s property must file and sign the return as “personal representative.”

Other Documents to Include:

• Court-appointed representatives should attach a copy of the court document showing their appointment.
• Representatives who aren’t court-appointed must include Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, to claim any refund. Surviving spouses and court-appointed representatives don’t need to complete this form.
• The IRS doesn’t need a copy of the death certificate or other proof of death.

If tax is due, the filer should submit payment with the return. If they can’t pay the amount due immediately, they may qualify for an IRS payment plan or installment agreement.

Qualifying Widow or Widower

Surviving spouses with dependent children may be able to file as a Qualifying Widow(er) for two years after their spouse’s death. This filing status allows them to use joint return tax rates and the highest standard deduction amount if they don’t itemize deductions.

Questions?

Don’t hesitate to call if you have any questions about filing a final tax return for someone who has passed away.

San Jose: (408) 252-1800

Watsonville: (831) 726-8500