2021 SBA Grant: The Latest Updates

2021 SBA Grant
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The effects of the pandemic perhaps had their strongest impact on small businesses nationwide. The Wall Street Journal recently reported that over 200,000 small businesses in the U.S. were forced to close their doors during the first year of COVID-19. While this seems like an incredibly high number, it’s actually fewer than many economists were initially predicting. And as for the businesses that were fortunate enough to stay open, most of them were left anything but unscathed.

 

While businesses in every industry were forced to cut integral staff, pivot to alternative services, and watch profits drop due to strict social distancing mandates, the Small Business Administration now has proposed a grant of $5 billion under the 2021 Supplemental Targeted Advances Program. These grants, part of President Biden’s Coronavirus Stimulus Law, are geared directly toward helping small business owners who were substantially impacted by the pandemic.

 

SD Associates is a full-service CPA advisory firm that works as a small business financial advisor for companies ranging in various industries.  Below, we’ve compiled everything you need to know about the SBA Grant 2021, including how to apply for the SBA Grant and who exactly is eligible for the SBA Grant.

 

How much is the SBA Grant?

This program will provide a $5,000 payment with no requirements of being paid back. Many businesses that were affected have already received a payment of up to $10,000 from the Economic Injury Disaster Loans (EIDL). For those business owners, they are still eligible for this grant as long as they meet the required criteria. The amount was determined as an estimated cost to replenish fallen resources and get these businesses back in a positive direction.

 

Who is Eligible for the SBA Grant?

The SBA Administrator, Isabella Casillas Guzman, said that “we’ve found that the smallest businesses — the majority of which are minority-owned — are hurting the most.” For eligibility, small businesses must have 10 employees or fewer and be located in low-income areas. Additionally, applicants must provide tangible evidence that their business suffered legitimate economic losses during the coronavirus pandemic. Specifically, applicants must have suffered a loss greater than 50% compared to the previous year over an eight-week period.

 

How to Apply for the SBA Grant?

The SBA claims that they will be accepting applications until the funds provided under Biden’s stimulus law run out. With the program targeting an expected 1 million small businesses that were significantly impacted, the SBA will be contacting businesses that are eligible and processing applications on a first-come, first-served basis. Prospective applicants can apply online through the SBA website and fill out the necessary forms associated with the grant application.

 

A Team that Small Businesses Can Rely On!

SD Associates is a firm that provides personalized business advisory services to each and every one of our clients. Our experienced staff partners directly with small business owners to tackle accounting, auditing, tax, and consulting obstacles as they appear. Similarly, we provide unparalleled financial planning services not just for what tomorrow holds, but for small businesses to experience continuous growth in this unpredictable financial climate for decades to come. Looking to make incredibly sound business decisions? Contact Us today to speak with an expert on our team!

 

 

 

 

 

 

 

 

 

Tax Day Is Extended to May 17th: Here’s What You Need to Know

Tax Day Deadline
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In mid-March, the Internal Revenue Service (IRS) and the Treasury Department announced that the federal income tax filing deadline for individuals would be extended past April 15th to a new deadline of May 17th. The 2021 tax deadline extension was proposed to provide relief for taxpayers during the difficult economic circumstances spurred by the pandemic. With all of these sporadic changes and heightened difficulties, many individuals still have questions regarding their tax filings.

 

SD Associates is a full-service CPA and business advisory firm that provides expert tax planning services for individuals and businesses alike. We’re here to help answer all your questions regarding the 2021 tax deadline extension and provide expert insight on how you can file correctly. Below, we’ve answered some common questions or concerns regarding this unusual tax season. 

 

When Can I File 2020 Taxes in 2021

Individual taxpayers are traditionally required to file their tax payments on April 15th of each year. Unprecedented circumstances this year, however, have prompted the IRS to provide an extension to help ease the burden of a challenging economic climate. 2020 taxes should now be filed before the deadline of May 17, 2021. Regardless of the amount owed, individual taxpayers can avoid any interests, penalties, or related fees associated with delayed payments by filing before this deadline. 

 

If you’re an individual taxpayer who requires further time beyond this new deadline, you are still able to request an additional extension to October 15, 2021, through your tax professional or online software services. This grants taxpayers more time and flexibility in filing their 2020 taxes, but it does not provide any leeway in paying taxes that are due. 

 

How to File 2020 Taxes? 

Now that you know when you can file 2020 taxes in 2021, you may still be wondering how the actual procedure of filing has changed. The first thing to note is that this new extension will be processed automatically. In other words, you will not need to file any additional forms or contact the IRS to qualify or update your tax standings. There should similarly be no real difference in the physical filing this year, other than the fact that you may be entitled to certain benefits or refunds. The IRS suggests that filing electronically with direct deposit is the most efficient and quickest way to secure these refunds and receive the stimulus payments that you’re potentially entitled to. Despite the extension, the IRS continues to urge individual taxpayers to file as soon as they possibly can to avoid further miscommunication or tax filing penalties. 

 

Tax Partners You Can Rely On 

In navigating the complex tax world, it can become increasingly difficult and overwhelming to stay up-to-date and knowledgeable on all the new updates or tax regulations. SD Associates has provided personalized tax services for individuals and businesses for nearly 40 years. We go beyond traditional tax advice to truly create long-lasting and meaningful partnerships with clients. If you’re looking for the “best tax services near me”, look no further than SD! 

 

We’re Here for Your Business: Benefits of Hiring an Outside Business Consultant

Benefits of Hiring a Business Consultant
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In the constantly shifting business environment, business owners are expected to deal with a variety of new tasks and challenges every year. It may seem that there simply is not enough time in the day to run your business while also dealing with recurring financial decisions at the same time. Depending on the size of your business, hiring an employee to handle these tasks may not be the most cost-efficient option. 

 

One way for businesses to address these short-term issues is to retain the services of a business consultant. Business consultants review your business, assess the situation, and make recommendations in order to resolve these recurring problems. If your business is looking to grow and transition into heightened levels of efficiency, hiring an outside business consultant is an incredibly useful tool. 

 

Specialized and Credible: 

Most companies seek out business consulting when there are specific issues or avenues of a business that require a specialized professional’s guidance. These business advisors bring in a different skill set to assist in both short-term and long-term objectives. When new tasks are delegated to existing employees, they’re forced to go through new training sessions, re-organize their schedules, and will probably expect a larger salary. Similarly, hiring a new employee and preparing an onboarding schedule draws precious time, money, and resources away from core business initiatives. 

 

For short-term purposes, a business consultant comes right in and performs the essential duty that they were hired to do. Because they’re specialized in whichever service or function your business requires. These consultants use the most innovative and modern approaches to business obstacles that they’ve seen play out countless times. In the long term, a consultant can create an entirely new trajectory for your business and ensure that your finances are adjusted for continued success.

 

More Free Time, New Business Opportunities: 

The average business was inspired by the creation of a brilliant idea or the identification of an incredible business opportunity. Business owners most likely didn’t expect to be dealing with ever-growing financial challenges like payroll management or tax filing on top of that. Specialized business consultants can perform these functions so business owners can focus on what’s really important: running their business. 

 

Does your business have certain goals or new ideas that are always taking a backseat to more pressing tasks? Adding a business consultant is a temporary investment that frees up some availability for the business goals you typically would not have the time for. Business consultants utilize the most comprehensive technology and years of experience to employ business assessments that identify critical shortcomings and ultimately recommend the appropriate strategies. 

 

An Outsider’s Perspective

As a business owner, it can be difficult to identify existing issues within your own company. Whether purposeful or not, business owners hold an inherently biased opinion about their processes, their employees, and especially their shortcomings. As your business is clearly your prized possession, it can become commonplace to overlook continued issues or errors in the flow of business. An outside business consultant brings an objective perspective to help provide a new lens to business owners who are fully immersed in their daily routines and company traditions. 

 

Competent consultants, who have worked with hundreds of similar organizations, can identify the issues that are holding companies back and implement proven strategies to eradicate them. Oftentimes, the businesses that are family-owned and operated can benefit most significantly from consultants because the tension in family relationships requires third-party guidance. 

 

SD Associates is a full-service CPA and business advisory firm that has nearly 40 years of consulting experience in a wide range of industries. We are renowned not only for providing exceptional business counseling results for our clients but also for an unparalleled level of professionalism and communication. We don’t just give financial advice, instead, we are a dedicated partner here to provide guidance and clarity for any business obstacle that comes your way. Interested in learning more about the many benefits of outside business consulting or a business financial advisor ? Connect with us today! 

New Child Tax Credit Rules: What to Know

child tax credit - what to know
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President Biden signed into law his first legislative act related to the COVID-19 crisis.  The  American Rescue Act of 2021 (ARPA) included an expanded 2021 child tax credit, aimed to help families with children endure the impacts of the COVID-19 pandemic. The Child Tax Credit, alongside a Recovery Rebate Credit (third stimulus) and several other kid-focused tax credits, can significantly reduce your tax bill this season if you meet the requirements imposed. The professionals at SD Associates are sharing everything you need to know about the new tax credit and how it may affect your family. 

 

How Much You Get Per Child

Under the American Rescue Act, more money will be given to more families. The new 2021 child tax credit is a refundable tax credit that provides parents with up to $3,600 per qualifying child under 18. Parents who have children aged 6 to 17 will be provided with a $3,000 credit and those with children under the age of 6 will receive $3,600. This is up from $2,000 per dependent child up to age 16. The credit if fully refundable meaning low-income families who weren’t eligible for the previous benefits will now be eligible to receive the 2021 child tax credit.

 

The credit will be split; half will be paid through the tax refund and the other half will be paid in advance throughout the year, with payments ranging from $250 or $300 between the months of July and December. Families who are eligible will be required to claim the remainder of the credit on their 2021 tax return next April. It’s also important to note the child credit income limit. The credit begins to phase out when Adjusted Gross Income (AGI) reaches $75,000 for single filers, $150,000 for joint filers and $112,500 for head of household filers. High-earning families will still be eligible for the old $2,000 credit, which begins to phase out when AGI exceeds $200,000 for single filers and $400,000 for joint filers.

 

Who Qualifies for the 2021 Child Tax Credit?

Some other child-related eligibility requirements for the child tax credit include:

  •   You must have provided at least half of the child’s support during the last year, and the child must have lived with you for at least half the year (there are some exceptions to this rule; the IRS has the details here).
  •   The child cannot file a joint tax return (or file it only to claim a refund).
  • To take the Child Tax Credit for the 2020 tax year, the child has to be 16 or younger on December 31, 2020. To take the Child Tax Credit for the 2021 tax year, the child has to be 17 or younger on December 31, 2021.
  • Family income – the child credit income limit phases out at certain thresholds. The phase out threshold was $75,000 for single filers, $112,500 for head of household, and $150,000 for joint filers. For 2020 tax year $400,000 for married filing jointly, and $200,000 for everyone else.

 

New Child and Dependent Care Tax Credit Changes

For the 2021 tax year, the Child and Dependent Care Credit can get you up to 50% of up to $8,000 (up from $3,000 in 2020) of child care and similar costs for a child under 13, a spouse or parent who cannot care for themselves, or another dependent so that you can work and up to $16,000 of expenses for two or more dependents (up from $6,000 in 2020). This is a refundable credit.

 

If you’re looking for reliable tax services , look no further than the experts at SD Associates. We work closely with our clients to deliver cost-effective solutions and value-added services whether it is in accounting, auditing, consulting, or tax engagement. Connect with our team of professionals today to have all your tax questions answered.

What the New Stimulus Bill Means for Your Small Business

Small Business Guide To New Stimulus Bill

 

On December 27, 2020, President Trump signed into law the second stimulus bill, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. This new bipartisan bill offers as much as $284 billion more for the Paycheck Protection Program (PPP), tax relief, and Economic Injury Disaster grants to small businesses that are struggling because of the ongoing COVID-19 pandemic. For some, this second round of money could be the difference between staying afloat and closing their doors for good. You may be wondering how this new bill affects your small business and if you can take advantage of it, we’re sharing the highlights and some guidance for your situation.

 

Your Small Business May Be Eligible for a Second PPP Loan

The new funds for PPP loans are available through March 31, 2021. Owners who did not receive a loan in the first draw can apply. Those who did receive a loan and have either used or plan to use it may also be eligible to apply, but with limitations. Borrowers can receive one first draw and one second draw PPP loan as part of the new stimulus package. Second draw loans will be calculated similarly to the first draw at 2.5 times the average monthly payroll of the prior year or, for the Accommodation and Food Services sector (NAIS Sector 72), 3.5 times the average payroll. No loan amount may exceed $2 million. Second draw applicants also:

 

  • Must be a small business with 300 employees or fewer
  • Have had at least a 25% reduction in gross revenue in one or more quarters of 2020 when compared to the same quarters of 2019

 

If your business continued to struggle throughout 2020 and into the new year, you might be eligible and can apply for this loan.

 

You May Be Paying Fewer Taxes

Probably the most welcoming change, small business owners who received PPP loans – whether through the first round or the new round, the act clarified certain tax positions whereby, if you used your PPP to pay business expenses that are normally deductible, you can take those deductions just like you would during a normal, COVID-free year. This means as a small business owner, you will likely have fewer taxes to pay in 2020. Neither the forgiveness in the PPP loans nor Economic Injury Disaster grants will be taxed in the 2020 season.

 

More Expenses Included

The first PPP loan allowed small business owners to use the funds to cover many critical expenses including payroll costs, mortgage interest, rent, and utilities. With the new legislation, more expenses are included in loan forgiveness including operations, property damage cost, supplier costs, and worker-protection expenditures (PPE).

 

 

 

Nonprofits are Now Eligible

Many nonprofits who didn’t qualify for the first round of PPP are now eligible for the second round of relief. The new requirement for 501(c)(6) nonprofit organizations includes:

 

  • Must have 300 employees or fewer
  • No more than 15% of their gross revenue most come from lobbying
  • The organization must plan to or have used its full PPP amount

 

If you need help applying for forgiveness or the application in the second round or just have more questions on the new relief bill that was passed, reach out to our team today. We provide affordable tax services throughout the Tri-State area, offering the highest quality of personalized service to our clients.