Here we are in the final stretch of an unusual year, looking to end 2020 on a strategic high note so that we can look ahead to a new year and a fresh start for 2021!
As we enter our busiest season, we want to share important, new and updated COVID-19 relief resources as well as potential tax changes on the horizon. It is our promise to you to provide the most up to date and beneficial information for your business as soon as it is available.
Any questions or feedback on the information and services we provide is always welcome! Please feel free to reach out!
-The Big Pic Results Team
With only a few weeks left in the year now is the time to make year-end payments to drive down your net profit. Not sure which route will be the most beneficial for your business? Book some time here to strategize and come up with a game plan.
Governor Newsom and the Legislature announced a package of assistance for small businesses impacted by COVID-19, including $500 million in grants. While the program is being created, please sign up here to receive an update when launched. Additional assistance announced via this letter on tax relief and recovery loans through the California Rebuilding Fund.
Another program you might have heard about is the Main Street Small Business Tax Credit which, as of December 1st, is accepting reservations for hiring credits here for those businesses that have experienced a >50% decrease in Gross Sales for the period Q2 2020 vs Q2 2019. Please note our Team has already reviewed this criteria for our Clients and have reached out to prompt you IF you qualify. Feel free to share this link with your small business colleagues who may qualify.
Additional funding has been allocated to the Small Business Stimulus Grant Program which provides economic assistance for small businesses located in San Diego and affected by the COVID-19 pandemic. Private for-profit and non-profit businesses with less than 100 employees, that have experienced a financial hardship and have been in business for at least one year are eligible for the Grant. For more information and to apply for the Stimulus Grant go here.
Recent guidance from the IRS and Treasury Department, which can be read here, has provided some clarification on the treatment of Expenses paid for with PPP funds. A few things to point out from the article:
PPP Loans NOT treated as Income - The PPP funds will not be treated as Income whether forgiven in 2020 or assuming it will be forgiven in 2021. We will NOT report this Loan or Forgiven Loan money as Income on tax reporting.
Expenses paid using PPP funds - Whether or not Loan has YET been forgiven, or going with the assumption forgiveness will be received (MUST be eligible) in 2021, Expenses will NOT be Deductible Expenses for tax reporting. (BPR will amend P&Ls to identify these Non-Deductible Expenses)
Order of Expenses deductibility - There is no guidance as of yet on what order these Expenses are excluded from tax reporting, or Non-Deductible. We will begin with Payroll, Rents, Utilities until we reach the amount of loan proceeds.
The Treasury Department is currently advising businesses to apply for Loan Forgiveness as soon as possible. Check with your Lender to see if they are accepting these applications as of yet. For assistance in applying for PPP Loan Forgiveness please reach out to our Operations Manager here.
A great article published by Moss Adams LLP breaks down the potential tax changes once Joe Biden takes office. Currently, Democrats are in control of the House of Representatives. Democrats control of the Senate won't be determined until after the Georgia runoff (there was no majority winner for Senate seat in GA), January 5th, 2021. At that point, Biden's tax proposals will likely become law should a 50/50 Democratic/Republican Senate occur as VP Kamala Harris will be the tie breaking vote. However, the President can implement tax policy through Executive Orders or Treasury Regulations.
Visit our website here for a summary of Biden's Tax Proposals and how they impact small businesses and individuals.
We are proud to introduce the newest member of our team - Sarah Johnson!
Sarah is a QBO ProAdvisor with over 15 years of bookkeeping experience in various fields. Sarah excels at company setups, historical cleanups and streamlining workflows processes.
Sexual Harassment Training by 12/31/20
Prior to January 1st, 2021 California employers with 5+ employees will need to provide 2 hour Sexual Harassment training for supervisors and 1 hour Sexual Harassment training for non-supervisor employees. An easy to use and cost efficient option is Easy Llama.
1099s due date February 1, 2021
Ensure that you are set up to successfully file your 1099s by 2/1/21. Read here for tips for success. Need help? Let us know!