Business Archives - Page 50 of 55

You’re Selling Your Business?

Greencrest on February 9, 2022

Selling your business can be a bittersweet experience. While you may be excited for the future, it’s the end of an era. Be sure you don’t overlook these considerations.

STAY INSURED

You’ll still need health insurance, which you’ll likely have to pay for on your own. Also, review your disability and life insurance needs. Policies that your company used to pay for will now have to come out of your pocket.

TAX SAVINGS

Work with your tax professional to create a plan to minimize the taxes you’ll owe from the sale. That could include making donations to your favorite charity, gifting money to children and grandchildren or setting up a donor-advised fund.

FREEDOM PLANNING

If you’re retiring, planning for your new free time is just as important as the financial decisions you’ll need to make. Without the routine of working, you may feel lost. Take ample time to prioritize how you want to fill your days to stave off boredom and loneliness. You may find that it takes a year or more to settle into a new routine.

Meals & Entertainment Deductions

Kathleen Hargrove on June 29, 2021

By: Morgan K. Webster, CPA

Writing off meals and entertainment as business expenses can be complex at times. Some things are 100% deductible, some are 50%, and a few are nondeductible. It all depends on the purpose of the meal or event, and who benefits from it.

The Consolidated Appropriations Act of 2021 issued a temporary 100% deduction for businesses for food and beverage expenses that are provided by a restaurant for amounts paid after December 31, 2020 and before January 1, 2023. These expenses were formerly 50% deductible under the TCJA. A restaurant, as defined under IRS Notice 2021-25, is a “business that prepares and sells food or beverages to retail customers for immediate consumption, regardless of whether the food or beverages are consumed on the business’s premises”.

The temporary 100% deduction does not include food and beverages provided by grocery stores, specialty food stores, liquor stores, vending machines, etc.

Entertainment expenses are still nondeductible. Food and beverages purchased at an entertainment activity are still 50% deductible if the food and beverages are purchased separately from the cost of the entertainment, or if the food and beverage is separated out on a bill or receipt.

In order to maximize your tax deductions for your business, we suggest your trial balance accounts reflect the following:

50% meals
Restaurant meals (100%)
Whole-staff lunches (100%)
Entertainment (0%)

If you have any questions on this guidance, please contact your Whalen advisor for assistance.

TIGTA reports IRS swamped with backlog of unprocessed returns

Kathleen Hargrove on April 1, 2021

TIGTA (Treasury Inspector General for Tax Administration) has conducted and audit and reported that the unprocessed individual returns, as well as the additional returns and correspondence in the Error Resolution, Rejects, and Unpostables functions and the Accounts Management inventory, include returns, etc. for taxpayers who still have not received their tax year 2019 tax refunds, the audit noted.

TIGTA stressed that IRS’s ability to resolve the backlog may well be impacted by the need to divert manpower and other resources to issuing economic impact payments or an unforeseen closure of Tax Processing Centers due to the pandemic. “The ability of these taxpayers to contact the IRS to receive updated information about the status of their refunds is a further challenge as staffing issues continue to hinder the IRS’s ability to provide adequate customer service,” the audit said.

The bulk of the work done at Tax Processing Centers “is not conducive to a telework environment,” TIGTA said. As described in the audit, “this work includes the receiving, sorting, and distributing of mail and the processing of paper tax returns, which requires manually inputting information from the tax return into IRS systems, correcting errors, and corresponding with the taxpayer, if needed.”

IRS has been able to restore most of its toll-free taxpayer assistance telephone lines and reopen many of its Taxpayer Assistance enters, the audit said.

PPP Deadline Extension Signed Into Law

Kathleen Hargrove on April 1, 2021

The Paycheck Protection Program (PPP) application deadline formally changed from March 31 to May 31 this week when President Joe Biden signed the extension into law.

The U.S. Senate had voted 92-7 last week to approve the PPP Extension Act of 2021, H.R. 1799, sending the legislation to the president for his signature.

The additional 60 days provided by the bill will provide additional time to for businesses to complete existing PPP loan applications and file new ones. The bill also provides the SBA time to address significant loan application process challenges, including validation and error codes, delayed guidance, and changes to the PPP loan amount calculation for self-employed borrowers.

Patrick Kelley, associate administrator for the SBA’s Office of Capital Access, testified during a Senate Small Business Committee meeting Wednesday that 190,000 applications were still held up in the SBA’s PPP platform due to unresolved error codes related to validation checks instituted by the SBA to help prevent fraudulent applications from being funded.

The PPP Extension Act does not provide any additional funding for the current round of the PPP, which Congress provided with more than $290 billion to make forgivable loans to small businesses and not-for-profits. From the program’s opening on Jan. 11 through March 21, the SBA has approved more than 3.1 million loans totaling nearly $196 billion.

If you have any questions or need assistance with this, please contact your Whalen advisor.

SOURCE: Journal of Accountancy

Considering an SBA Loan? Act Now.

Kathleen Hargrove on March 22, 2021

If you have been considering an SBA loan (other than PPP) for your business, this is an ideal time to apply.

We have compiled some key SBA loan related provisions included in the Economic Aid Act to further assist you with making this decision:

Extension of the Debt Relief Program established under the CARES Act

All borrowers with qualifying loans approved by the SBA prior to the CARES Act will receive an additional three months of P&I, starting in February 2021. Going forward, those payments will be capped at $9,000 per borrower per month.

After the three-month period described above, borrowers considered to be underserved—namely the smallest or hardest-hit by the pandemic—will receive an additional five months of P&I payments, also capped at $9,000 per borrower per month. They include:

Borrowers with SBA microloans or 7(a) Community Advantage loans

Borrowers with any 7(a) or 504 loan in the hardest-hit sectors, as measured by the severity of sector-wide job losses since the start of the pandemic. They include food service and accommodation; arts, entertainment and recreation; education; and laundry and personal care services.

SBA payments of P&I on the first 6 months of newly approved loans will resume for all loans approved between February 1 and September 30, 2021, also capped at $9,000 per month.

Modifications to 7(a) Loan Programs

Increases to 90 percent the loan guarantee amount on 7(a) loans, including for Community Advantage loans, until October 1, 2021.

Increases the Express Loan amount from $350,000 to $1 million on January 1, 2021, and then reverts permanently to a lower amount of $500,000 on October 1, 2021.

The Express Loan guaranty amount for loans of $350,000 and less is temporarily increased from 50 percent to 75 percent, and for loans above $350,000 the guarantee remains at 50 percent. On October 1, 2021, the guarantee reverts to 50 percent for all Express Loans.

Temporary Fee Reductions

Waives lender and borrower fees for both the 7(a) and 504 loan programs.

For further assistance with submitting an application or if you have any questions, please work with your Whalen advisor.

Category: Business

News & Tech Tips