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2020 Year End Review, COVID-19 Legislation Update, 2020 Survey

Tuesday, December 12, 2022



Dear Clients and Friends,


If you don't read this whole email, that is okay...it won't hurt my feelings, but please complete this  SURVEY  so that we may better serve you in 2020!


I know it was just two weeks ago that I sent out an email, but I wanted to close out the year with some final updates and thoughts.


COVID-19 Legislation


Just yesterday, Congress passed a COVID-19 relief bill known as the "Consolidated Appropriations Act, 2021". This bill has many provisions affecting you, my clients. Here is a snapshot of the items that may affect you or your business directly:


1. 2nd Round PPP funding is approved for businesses that can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019. This PPP funding is available to businesses whether they received first round PPP funding or not.


2. 2nd Round EIDL loans are available for up to $50,000. These loans are for businesses that have fewer than 25 employees and have suffered a loss of over 30%. They are also only available to businesses owned by a veteran or member of the armed forces, located in a low-income community, or owned by an economically or socially disadvantaged individual.


3. Economic Impact Payments (Stimulus Checks) for individual taxpayers who earned less than the thresholds:


     $600 for Single taxpayers earning less than $75,000 per year

     $1,200 for Married taxpayers earning less than $150,000 per year


4. $300 weekly Federal Unemployment Benefit Supplement for the period beginning December 26, 2020 and ending March 14, 2021. Unemployment benefits will continue to be expanded to 

the self-employed, gig workers, and others in nontraditional employment.


5. My favorite provision of this bill is the "Tax deductibility for PPP expenses".  Business expenses paid with forgiven PPP loans are tax-deductible. This supersedes IRS guidance that such expenses could not be deducted and brings the policy in line with what the AICPA and hundreds of other business associations have argued was Congress’s intent when it created the original PPP (CARES) Act, P.L. 116-136.


PPP Loan Forgiveness - Many banks have still not made PPP forgiveness applications available. Please check with your PPP lender directly regarding the application for PPP Loan Forgiveness. Please keep in mind that I DO NOT have access to your PPP Loan Forgiveness application and if you want me to complete (or help you complete) your forgiveness application we will need to work together on this.


2021 Planning


2020 has taught us a lot about planning. I wanted to share a resource with you that I have found useful in the past for articulating your business goals. I am a huge fan of LivePlan brought to us by (https://www.bplans.com/). This software dots all the i's and crosses all the t's for effectively executing a business plan. If you are interested I wanted to share this resource.


As your business continues to evolve, we can work together to adjust your tax strategy. It may be time to adjust your entity choice, start a 401k (or add a safe harbor/profit sharing provision), or add health insurance benefits. If you made real estate investment in 2020, we may consider cost segregation in order that you may deduct costs sooner. 


Here is a list of tax credits we might consider for 2020 and 2021:


Work Opportunity Credit

Alternative Motor Vehicle Credit

Credit for Small Employer Pension Startup Costs

R&D Tax Credit

Empowerment Zone Credit (business located in parts of Fresno and LA County)

Small Employer Health Insurance Premiums Credit

Employee retention credit (If you did not get the PPP)


Tax season is just around the corner. We plan on using Google Forms for a more seamless information gathering experience. You can expect an email from us in early January with checklists, organizers, and an engagement letter.


In Closing


We have worked especially hard to improve our services this year including proactive tax planning, more communication within the firm and with our clients, timely financials, and expanded staff training. Mary and I are QuickBooks Advanced Certified and Andrea received her QuickBooks Certification as well as her CRTP License this year. We want to hear what you think about how we are doing. Please complete this anonymous  survey before the end of the year, so we can learn more and better ways to improve in 2021.


Thank you for trusting us this year. Andrea, Mary, and I feel it is an honor and a privilege to enjoy our client relationships of mutual respect, trust, and integrity. We hope to continue to strengthen those bonds in 2021 and do our level best to be the very best we can be.


We wish you a peaceful and renewing holiday season as well as health, prosperity, and happiness in the coming year.



Sincerely,


Sandra


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