St. Louis Small Business Monthly, a regional publication serving the entrepreneurial and small business community, has recently named Wamhoff Accounting President Sandy Furuya to its 2020 list of St. Louis’ Best Accountants. The list appears in the publication’s October, 2020 issue, and is compiled based on reader nominations.

Furuya holds more than 30 years of experience in all facets of tax planning and accounting, serving individuals, non-profits, businesses and trusts. She and her team of tax professionals prepare nearly 750 returns each year and serve as consultants for clients throughout the year to help them appropriately navigate their unique financial situations.

“My passion for this industry began when I was quite young and has only grown as my career has progressed,” said Furuya. “My team and I are honored to have served generations of clients as they go through the various stages of life and business, and all of the transitions that come along with it. They rely on us to help them make informed decisions and feel prepared for tax season all year long.”

Wamhoff Accounting was established in 1975, with Furuya working alongside founder Bob Wamhoff since the early days of the firm. She assumed ownership in 2017, continuing the Wamhoff legacy of client service excellence and treating clients as part of the family. The firm has also been named to Small Business Monthly’s list of St. Louis’ Best Accounting Firms for nine years, and has received multiple Best in Customer Service awards

Services offered by the firm extend beyond taxes and accounting. Wamhoff Accounting also assists with bookkeeping, financial statements, and establishing new businesses. Free initial consultations are available upon contact, and individual tax returns can be completed within the day.

“I am honored to be included on this year’s list of St. Louis’ Best Accountants and am grateful for the support of our clients and area business owners who took the time to nominate me,” said Furuya. “As we prepare to enter a new tax season, I look forward to helping clients navigate the tax and financial implications of this past year and prepare them for the future.”

In Notice 2020-71, the IRS recently announced per diem rates that can be used to substantiate the amount of business expenses incurred for travel away from home on or after October 1, 2020. Employers using these rates to set per diem allowances can treat the amount of certain categories of travel expenses as substantiated without requiring that employees prove the actual amount spent. (Employees must still substantiate the time, place and business purposes of their travel expenses.)

The amount deemed substantiated will be the lesser of the allowance actually paid or the applicable per diem rate for the same set of expenses. This notice, which replaces Notice 2019-55, announces:

• Rates for use under the optional high-low substantiation method,
• Special rates for transportation industry employers, and
• The rate for taxpayers taking a deduction only for incidental expenses.

Updated general guidance issued in 2019 regarding the use of per diems under the Tax Cuts and Jobs Act (TCJA) remains in effect.

High-low method

For travel within the continental United States, the optional high-low method designates one per diem rate for high-cost locations and another for other locations. Employers can use the high-low method for substantiating lodging, meals and incidental expenses, or for substantiating meal and incidental expenses (M&IE) only.

Beginning October 1, 2020, the high-low per diem rate that can be used for lodging, meals and incidental expenses decreases to $292 (from $297) for travel to high-cost locations and decreases to $198 (from $200) for travel to other locations. The high-low M&IE rates are unchanged at $71 for travel to high-cost locations and $60 for travel to other locations. Five locations have been added to the list of high-cost locations, two have been removed and 10 that remain on the list are now considered high-cost for a different portion of the calendar year.

Although self-employed persons can’t use the high-low method, they can use other per diem rates to calculate the amount of their business expense deduction for business meals and incidental expenses (but not lodging), or for incidental expenses alone. (Employees can no longer deduct their unreimbursed expenses because of the suspension of miscellaneous itemized deductions by the TCJA, so these other rates are effectively unavailable to them.) The special rate for the incidental expenses deduction is unchanged at $5 per day for those who don’t pay or incur meal expenses for a calendar day (or partial day) of travel.

A simpler process

The per diem rules can greatly simplify the process of substantiating business travel expense amounts. If the amount of an allowance is deemed substantiated because it doesn’t exceed the applicable limit, any unspent amounts don’t have to be taxed or returned. If an employer pays per diem allowances that exceed what’s deemed substantiated, however, the employer must either treat the excess as taxable wages or require actual substantiation. When substantiation is required, any unsubstantiated portion of the allowance must be returned or treated as taxable wages. Please contact us to discuss the rules further.

© 2020

In a recent ruling Notice 2020-32 the IRS stated the business owner will not be able to deduct the payroll costs, certain employee benefits such as healthcare and other benefits, as well as interest on mortgage obligations, rent, and utilities.

The recent ruling Notice 2020-32 provides guidance regarding the deductibility for Federal income tax purposes of certain otherwise deductible expenses incurred in a taxpayer’s trade or business when the taxpayer receives a loan pursuant to the Paycheck Projection Program. 

Specifically, this notice clarifies that no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expenses results in forgiveness of a covered loan pursuant to section 1106(b) of the CARES Act.