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Congratulations, You got your PPP Loan, What Next?

Posted on May 6, 2020 at 1:00 PM Comments comments (3)

 
      
  Congratulations, you filed all the Paperwork for your PPP Loan and you have received your Grant and Loan. Now is the time to start planning on how you are going to ensure you use the Funds correctly. During this Pandemic, the SBA has made efforts to make funding accessible to Small Businesses and it is important to use the Funds appropriately. 

    The PPP Loan is designed to provide a direct incentive for Small Businesses to keep their workers on Payroll. SBA will forgive Loans, if all employees are kept on the Payroll for eight weeks, starting from when the Loan is received and the Money is used for Payroll, Rent, Mortgage Interest Payments or Utilities. It is important to note that not more than 25% of the forgiven Amount maybe for Non-Payroll Costs.
 
  Now, that you have your Loan and have identified the time period, it's time to calculate the monthly payroll cost, to ensure your Loan Forgiveness. The Items below are the Payroll Costs to include, as well as the Non- Payroll Costs. 
 
        Payroll Costs: 
 1)   Salary, Wages, Commissions, Tips and Bonuses.
 2)  Owner's Draw Payments for Sole Proprietors.
 3)  Severance Pay
 4)  Paid Leave Payments (No FFCRA Paid Leave)
 5)  Employee Payments for State and Local Taxes.
 6)  Employee Payments for Federal Income Tax and FICA.
 7)  Employee Contributions to Retirement and Group Health Plans ( Health Insurance & Dental Coverage).
 8)  Payments of Interest on Mortgage Obligations. 
 
  Non-Payroll Costs: 
 1)  Contractor Pay
 2) Payroll Reimbursement.
 3) Owner's Draw Payments (Except for Sole Proprietors).
 4) Workers' Compensation Fees.
 5) Fringe Benefits. (Commuter Benefits, HSAs).
 6) Ancillary Benefits (Short-Term Disability, Group Life Insurance).
 
  Important Notes:
 
  • The SBA recently clarified that the 8 Weeks Period begins on the date, the borrower receives the disbursement of the Loan, and regardless of whether your Business has resumed operations.
  • No More than 25% of the Forgivable Amount of a PPP Loan can be attributable to Non-Payroll Costs.
 
   Actions to take immediately:
 
  • Open up a Separate Bank Account and Deposit the Loan Amount in the Bank Account. It would make it easier to track the use of the funds precisely. 
  • Order Check Books for this Account and Ensure the Check Payment is made from this Account.
  • Hire Back Employees and Restore Headcount and Wages to Prior Levels.
  • Maintain a Paper Folder or Electronic Folder for all PPP Expenses and Cancelled Checks. Remember you have 8 Weeks of Funding to track these costs.  Not 2 Months but 8 Weeks, from when you got the Funding. 
  • Ensure to pay your Rent on time. Get your Lease Agreement and Have it ready to produce, when it is requested.
  • Ensure to pay your Utility Bills on time and save all Bill Payments.
  • Make Sure to Pay ALL Interest on your Loans when Due. Although, Principal Payments are required, you are required to keep track of the Interest Payments, either with Statements or an Amortization Schedule. 
  • Keep a Record of the Exact Amount of Health Benefits and Pension Contributions due for the 8 Weeks. Ensure to find them, before the end of the 8 Weeks.
  • Get a Bookkeeper, CPA and Accountant NOW. 
 
         The PPP and EIDL Loan Program is one of the Greatest Investments, you have ever made as a Small Business. The Secret is knowing how to play by the Rules and is essential in using it to your Best Advantage.
       
     You may be proud of the fact, that you do your own Tax Filings, Payroll and Bookkeeping, but the PPP Loan and EIDL Loan is not an area, where you want to risk making a wrong decision. The Guidance for the PPP seems to be changing daily. Be Aware that Little Mistakes can cost you Big.  Whatever you do, be sure to do it under the Guidance of a Financial Advisor/Bookkeeper to help you maximize your Benefit from the adherence to the PPP Loan Terms.
 
     Feel Free to Reach Out to us and Let Us know, how we can assist you. We are available to help you with your Bookkeeping, Accounting and Payroll Needs. Call 202-422-4586 for More Information. 
 
 
 

     

W-2 AND FORM 1099 FILING DEADLINE IS JANUARY 31ST 2019.

Posted on January 9, 2019 at 5:47 PM Comments comments (2)

W-2 AND FORM 1099 FILING DEADLINE IS JANUARY 31ST 2019; Employers & Business Owners Take Note. 

Happy New Year. This is to remind All Business Owners/ Employers that the Deadline for filing W-2 and Form 1099 Tax Report with the IRS is January 31st, 2019. This means that you need to ensure that your Employees and 1099 Contractors receive and review their W-2 and 1099s before January 31st, 2019.

It is important to remember that this Act is from The Protecting Americans from Tax Hikes (PATH) Act of 2015 that was passed by Congress in 2015 and became effective since 2016. We had published a Detailed Article on this - 
https://www.linkedin.com/…/new-w-2-deadline-2017-business-…/

By this New Act, Employers and Small Businesses have January 31st Filing Deadline to submit Forms W-2 and W-3 to the Social Security Administration (Whether you file using Paper Forms or electronically). This New Date also applies to certain Forms 1099-MISC reporting Non-Employee Compensation such as Payments to Independent Contractors. As a Result of this, the filing deadline for filing W-2s and 1099 forms (including Form 1099-MISC) is Every January 31st. 

Note to Employers: It is important that Employers become adequately prepared to complete the Year-End Tasks. This means: 
• Ensuring that All Independent Contractors fill out a Correct and Updated Form W-9.
• Verifying Accuracy of Employee Information.
• Reporting/Submitting Any Year-End Adjustments as soon as possible.
• Reviewing Year-End Totals for any Discrepancies. There are penalties for Failure to file these Returns or Furnish Correct Statements and these Penalties are not palatable. 

The Penalty amounts are reflected below:
• $50/Return –   If you file after 30 Days of the Due Date.
• $100/Return – If you file more than 30 days after the Due Date.
• $260/Return – If you do not file corrections or Do not file Required Forms. 

 At Rosyan Bookkeeping Services, We are committed to helping you with your W-2s, W-3s and 1099 Filings, as well as furnishing you with helpful information regarding your Tax Filings.

Feel Free to Call and Let us know how we can help you.