Elkins Park, PA, July 27, 2022 – SD Associates P.C., a CPA and business advisory firm located in Elkins Park, PA, recently held their annual charity golf event, which successfully raised close to
$50k for local charities. The event, held at Commonwealth National Golf Club in Horsham, PA on July 11th, had 108 players in attendance.
The funds raised from the event were distributed to local charities through SD Associates’ non-profit foundation, The SD Charitable Foundation. This year the foundation honored the retirement of the firm’s longtime partner Michael Brenner by donating a portion of the proceeds to Michael’s favorite charities. The charities that benefited from this year’s event included the Breathing Room Foundation, which assists families who are affected by cancer; the Scott Cohen Foundation, which provides scholarships to students; Girls on the Run, an organization that works to inspire and mentor girls; and The VinVu Foundation, which supports charitable giving and philanthropic activities.
“We are delighted that so many of our clients, staff, and friends were able to make it out this year to the event,” said Howard A. Drossner, CPA, Co-Founder of SD Associates. “It not only is a fun day out, but knowing we are able to positively touch so many lives by hosting this event annually is an extremely rewarding experience for all involved.”
To date, The SD Charitable Foundation has raised almost $250,000 for local charities. If you would like to be a part of next year’s charity golf event, either as a participant or as a sponsor,
please call 215-517-5600.
About SD Associates P.C.
SD Associates P.C., organized in 1983, is a full-service CPA and business advisory firm located in metropolitan Philadelphia servicing clients throughout the Tri-State area. Our firm’s philosophy has been, and continues to be, to consistently provide the highest quality of personalized service to our clients. SD Associates’ diversified clientele ranges from start-ups to fully matured companies, including manufacturing, wholesale distribution, retailing, financial services, professional services, real estate development, restaurants, and various non-profit businesses and organizations. Our six shareholders have over 140 years of combined experience, which includes a staff of CPAs with advanced degrees, including Masters in Taxation.
For more information about SD Associates P.C., visit us on the web at https://sdaccounting.com.
As a small business owner, you’re tasked with making critical financial decisions and monitoring the productivity of your employees on a daily basis. In the same sense, you may take on the responsibility of overseeing accounting systems, invoicing, or tax planning. As an owner of a business, you may hear the word “audit” and immediately think of the negative connotations that surround it.
The reality is, however, internal audits can be actually incredibly beneficial for your small business. A small business internal audit can help your company discover crucial information about your accounting systems, find technical errors in your business processes, and assist you in modifying your future tax planning. If you’re a small business owner in Southeastern Pennsylvania and are looking for “reputable accounting services near me”, look no further than SD Associates. Below, we’ve listed three major positives in enlisting professionals for a small business internal audit.
Identify Accounting Weaknesses:
An audit, by definition, is an inspection. Perhaps a major reason that businesses owners fear internal inspections is that they are designed to reveal fundamental flaws within their business operations. Business owners should actually welcome and encourage these internal reviews, as they provide limitless opportunities to improve practices before it’s potentially too late. Receiving pertinent information, updates, and projections regarding key financial areas like gross margins, cash flow, cost analysis and taxes, and more can help you in your business plans and execute more efficiently in a multitude of areas.
When it comes to tax planning, internal reviewing simplifies the filing process and also helps you identify available benefits that you didn’t know existed. Additionally, hiring an independent organization to analyze your small business eliminates any bias that you or one of your internal employees may have.
Strengthen Credibility and Reputation:
Creating credible financial records is crucial in your small business. An Audits of the financial statements provides greater comfort to potential partners or bankers that all of your financials are in accordance with generally accepted accounting principles. When the time inevitably arrives to start considering succession plans or sale preparation, consistent financial audits provide you as the business owner with more time to correct systematic issues that might be uncovered by potential buyers. This way, any glaring weaknesses within your accounting systems or financial management processes can be improved upon well before your business goes to market.
Test Controls, Detect Fraud:
Are your business controls (or daily procedures) susceptible to misstatements, errors, or even fraud? Small business internal audits not only work to determine if your controls are able to detect these operational risks, but also if they’re able to prevent them from happening in the first place. Professional auditors will strategize tangible options to overcome these risk areas and increase the security of flawed operations. In the event of internal fraud, an internal audit can identify where fraud is occurring, the extent of the fraud, and how to quickly eliminate it.
Schedule a Small Business Audit Today
With so much on the line, you need to be absolutely positive that your small business audit is performed by certified public accountant. The expert team at SD Associates has nearly four decades of experience performing concise attestation engagement or agreed upon procedures, providing detailed financial analysis, and facilitating necessary discussions for positive changes for small businesses. If your business is eager to improve daily operations and plan for a better future, schedule an appointment with SD Associates today!
Amid the chaos of the last two years, many people received another reminder of just how essential healthcare workers are to our society. Through the pandemic, we were also reminded of their amazing ability to work incredibly long hours, multitask, and collaborate to provide medical assistance to patients.
With all of that said, one could imagine how difficult it is to juggle these everyday emergencies or appointments with daunting financial management tasks. At SD Associates, we provide planning for those healthcare professionals that streamlines integral tasks like accounting, planning, taxes, and more. Our focus is on your financial future so that you can focus on the medical challenges of today. Below, we’ve compiled three crucial elements of planning for healthcare organizations.
Create Financial Timelines:
All of the best financial practices for healthcare organizations start with a planning phase. This process involves a deep dive into your own records, your projections, and your financial objectives. Professionals know that not everything will go exactly to plan, especially in the ever-evolving field of healthcare. In that case, it’s essential to consider inevitable roadblocks in the form of taxes, partnerships, and employees in your timeline. Pin-point a few critical missions that your company needs to continue financial growth, and strategize how you will reach them and how much it will cost to do so.
Invest in Financial Tools:
Healthcare institutions are renowned for consistently being at the forefront of technological innovations and advancements, yet many of them still use outdated payment and billing methods. By switching to modern point-of-sale systems and essentially “going paperless”, your healthcare organization can save money, more efficiently send billing information or appointment updates, and centralize time-consuming tasks related to patient information.
Similarly, healthcare personnel are far too busy with patients or research to constantly worry about bookkeeping, payroll, and accounting. Partnering with business advisors to handle these essential tasks, and training your employees to master integral software likeQuickbooks, is the key to streamlining financial operations. One of the principal elements of financial management in healthcare is working with a professional team that understands your unique organization and its specific financial goals.
Healthcare institutions often have multiple verticals within their organization that all require adequate funding and resources. It can be a difficult task deciding which areas to invest more finances into to ultimately grow. A combination of short-term and long-term forecasting can provide a clearer perspective.
As a healthcare provider, you want to ensure that you have state-of-the-art equipment for the sake of your employees and your patients. Yet, there is often internal conflict around spending or budgets for certain tools or hiring new staff. One of the best financial practices for healthcare organizations is establishing a budget that is flexible, responsible, and one that accurately addresses critical needs.
Partner with SD Associates to Reach Healthcare Finance Goals!
SD Associates is a team of full-service, certified public accountants and business advisors who work directly with healthcare business owners or board members on their distinct goals. With so many different elements of financial management in healthcare, we’re a partner you can trust to properly perform budgeting, financial planning, tax, and accounting services. Our comprehensive strategies are designed to map out your company’s financial future, and we work intimately with you so that you can arrive there.Connect with us today to get started on your planning strategy!
Due to beneficial returns, certain tax breaks, and the emergence of influential crowdfunding technology, real estate investments remain a fantastic addition to one’s personal portfolio. Developers, a role that traditionally represents an individual or small group of individuals, are known commonly for taking the route that most often leads to financial independence.
In order to achieve consistent success as a developer, you’ll need a comprehensive financial real estate development plan that draws out all business objectives, ways to avoid or correct potential roadblocks, and how to generate mutually beneficial relationships with outside investors. As a CPA and business advisory firm, SD Associates has provided real estate financing advice to countless developers, ranging in investment experience and net worth. Below, we’ve identified four essential things that every developer needs to include in their financial real estate development plan.
Conduct Thorough Research:
As you could probably imagine, developers need to conduct a considerable amount of research on properties they are interested in purchasing. Most notably, the location of the property is incredibly important not only for resale purposes, but also due to charges for land, labor, materials, and more. In addition, another thing you’ll need to research is contractors. As you’re clearly looking to keep all of your project costs low, you might feel inclined to go with cheaper labor forces for construction phases. By looking through reviews, finding references, and comparing prices, you’ll be able to identify an appropriate, professional service for the right price that you can rely on.
Create Realistic Cost Estimates:
Before you pitch any investors or begin your crowdfunding campaign on the internet, you’ll need to prepare realistic expectations of total costs. Estimating a realistic property value can often be achieved through identifying the public sale price of neighboring properties, or from commercial spaces that share a similar size as yours. There are a plethora of transactions and contracts that you’ll need to consider throughout the project, including costs for labor, materials, fees, permits, and more.
Consider Debt, Equity, and Investors:
A common misconception is that developers are majority investors or majority “owners” of properties. Relatively speaking, developers traditionally provide a minuscule amount of capital for the development. The large majority, typically around 90%, of capital is raised from high net worth investors or investment funds. In addition, almost every development project requires some sort of debt financing. With all of these moving parts, debt obligations, and equities, you can begin to see why hiring a professional for real estate finance advice can be so beneficial for choosing the appropriate funding option.
Create a Timeline, Maintain Records:
Inevitably, not everything will go exactly to plan during development. In fact, through every stage, there will more than likely be disruptions or times to shift gears. In any sense, creating a thorough timeline estimation will help you hold yourself accountable for intended deadlines or milestones. It will also help you organize dates on which certain investors or lending institutions should be paid, keep track of when vendors or contractors started and ended, and always be consistent with bank statements or loan applications.
Trust SD Associates for Your Property Developer Finances
The complexities of loans, the jumble of investors with various stakes, and all of the regulatory contracts that go into property developer finances make it difficult to manage for even seasoned investors. If you’re starting a new real estate development project, we provide full-scale advisory services, concise estimates and reports, comprehensive tax services, and more to guide you through the intricate, complicated real estate journey. Connect with us today to partner with specialists that can help you traverse the day-to-day logistics of development investing.
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!
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!
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 employbusiness 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 counselingresults 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!
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 detailshere).
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 reliabletax 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.
Though there’s no guarantee yet, talks of a third stimulus check have been making their way around Washington DC for weeks. While the first round took months to reach some people, and the second round appeared too little to most, the path to a third check seems to be happening quickly. With another possible $1,400 on the horizon, there are still a lot of open questions, like “When are we getting a third stimulus check?” “How much will you get for your kids?” and “Who will qualify?”. The team at SD Associates is here to share some valuable information on what a third stimulus check may look like.
Who Could Qualify for the Third Stimulus Check?
While millions of people were eligible for the first and second checks, the third round could look a little bit different. Many taxpayers who were eligible for the first two could now find themselves excluded from the $1,400 based upon their earnings. Under President Biden’s $1.9 trillion coronavirus relief package (“Budget Reconciliation Act”), the new bill excludes individual taxpayers earning over $75,000 and joint filers making over $150,000. There will still be phase-outs for higher earning taxpayers.
It’s important to note that the third round’s eligibility requirements are different from the sliding scale that was used previously to determine past stimulus payments. The new Democratic proposal follows the same path as the second stimulus check, with the IRS reducing checks by 5% for the total amount made over the AGI limit. This means for every $100 made over the limit, the payment goes down by $5.
Larger Base Amount
The base amount of the third stimulus check is expected to be $1,400, $200 more than the first round of $1,200 that was delivered under the CARES Act and $800 more than the second round that just hit many bank accounts in January 2021. The $1,400 came about after many Americans complained about the second $600 check being too little, too late.
Another possible change? Families with dependent children aged 16 or under could see a little bit more. During the first round, families saw an extra $500 for each child, and that amount was raised to $600 for the second stimulus check. This time around, lawmakers are calling for a higher amount.
“Are we getting a third stimulus check?” has been on everyone’s mind since the second check was delivered to many Americans. Should Congress pass a standalone bill centered on stimulus checks by the intended mid-March 2021 timeline, Americans could begin to see their payment in a matter of weeks. However, this date could be delayed due to several factors, including how long it takes the IRS to begin calculating your payments during the busy tax season.
Based on 2020 Tax Returns
The first stimulus payment was calculated based on either your 2018 or 2019 tax return. If you didn’t file during those two years, the IRS welcomed you to send in any necessary documentation through an online portal. The IRS also took information from the Social Security Administration, Railroad Retirement Board, or Department of Veterans Affairs if you received benefits. If no information was provided and you didn’t receive government benefits, the IRS is permitting the option to claim the “recovery rebate” credit on your 2020 tax returns. The second stimulus check was based on your 2019 return. If you didn’t file, didn’t use the non-filers portal to get your first payment, and didn’t receive benefits, then the IRS offers the option to claim the “recovery rebate” credit on your 2020 tax returns.
Because the IRS has already begun processing tax returns, those who file sooner could not only get their refund quicker, but they might also receive their third stimulus check faster as well.
With the next round of stimulus funds, it might be possible that having a Social Security number will no longer be a requirement. During the first round of payment, without a Social Security number, people were unable to qualify for the $1,200. For families with children, both parents were required to have one to receive the extra $500 per dependent. After the COVID-Related Tax Relief Act was passed, the guidelines surrounding this loosened, allowing married couples to claim the additional money even if one of the parents didn’t have a Social Security number. This rule was also applicable for the first round of checks, allowing families to claim up to $1,200 with the additional $500 as a recovery rebate credit.
The third round of payments could see this requirement dissolve altogether. Under the HEROES Act, individuals, including non-U.S. citizens, would only need a Taxpayer Identification Number to receive the next payment.
In the grand scheme of things, the possibility of the third round of stimulus checks is moving at lightning speed. For the most up-to-date news, turn to the professionals at SD Associates. Not only can we provide valuable updates on the proposed third stimulus check, but we’re also here to assist you with our professional tax services all season long. Contact our team today for more information.
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.