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Accounting for Business

Welcome to our Resources section, where you will find articles pertaining to accounting for business, business financial planning, financial advice, and the industries of our clients. This section is a great source of information, but please contact us if you feel you need professional financial advice. Maxwell Locke & Ritter is here to offer trusted guidance.

 

With much of the country currently on lockdown due to the novel coronavirus (COVID-19) crisis, many nonessential businesses have been shuttered. As a result, millions of small business owners find themselves on the brink of financial disaster. For those with business interruption insurance policies in place, now may seem like the ideal time to submit a claim.

However, as it stands currently, there’s much disagreement regarding whether business interruption insurance policies should cover loss of income triggered by the pandemic.

As we all try to keep ourselves, our loved ones, and our communities safe from the coronavirus (COVID-19) pandemic, you may be wondering about some of the recent tax changes that were part of a tax law passed on March 27.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains a variety of relief, notably the “economic impact payments” that will be made to people under a certain income threshold. But the law also makes some changes to retirement plan rules and provides a new tax break for some people who contribute to charity.

On Friday April 24th, President Trump signed into law a $484B relief package, primarily to replenish the immensely popular Paycheck Protection Program (PPP) under the CARES Act. The additional CARES Act stimulus also includes funding for the Economic Injury Disaster Loan Program, hospitals and COVID-19 testing.

On April 23rd, the Small Business Administration (SBA) released additional guidance regarding the Paycheck Protection Program (PPP) under the CARES Act. FAQ #31 of this guidance addresses the question of whether businesses owned by large companies with adequate liquidity qualify for the PPP program and provides an option to repay the loan without penalty.

As companies begin to receive funding from the Paycheck Protection Program, tracking qualified costs to maximize debt forgiveness is top of mind for many loan recipients. Failure to accurately track funds could result in a potential misuse of loan proceeds, resulting in receiving only a portion of the maximum loan forgiveness amount. Included in this article are several considerations for tracking funds and what costs are eligible for forgiveness.

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With the 2019 individual tax return deadline just behind us, it’s a good idea to familiarize yourself with tax-related amounts that may have changed for 2020. For example, the amount of money you can put into a 401(k) plan has increased and you may want to start making contributions as early in the year as possible because retirement plan contributions will lower your taxable income. Note: Not all tax figures are adjusted for inflation and even if they are, they may be unchanged or change only slightly each year due to low inflation. In addition, some tax amounts can only change with new tax legislation.

So below are some Q&As about tax-related figures for this year.

At long last, Congress passed legislation to correct a drafting error related to real estate qualified improvement property (QIP). The correction is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27, 2020. The correction retroactively allows real estate  property owners to depreciate QIP faster than before. Here’s how it could lower your tax bill for 2018 and beyond.

In Notice 2020-23 issued on April 9th, the IRS has extended more tax deadlines, including for nonprofit organizations.  This broad relief includes a variety of tax filings and payment obligations that are due between April 1, 2020 and July 15, 2020, and the relief is automatic, so taxpayers do not have to file extensions or submit other documentation to the IRS to obtain relief.

In Notice 2020-23 issued on April 9th, the IRS has extended more tax deadlines for individuals, trusts, estates, corporations, nonprofit organizations, and other non-corporate tax filers.

Layoffs, decreased sales, and difficulty managing a remote workforce have been an unfortunate reality for many companies weathering the COVID crisis. As companies enter “survival mode”, it’s easy to lose focus on security and compliance. Cybercriminals know this, so cybercrimes tend to increase during a crisis. This article covers our three quick tips to promote security in a time of business disruption.

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