With the increase of the standard deduction in 2018 many taxpayers no longer itemized since they no longer met the threshold. Statistics show that individual charitable giving fell 3.5% adjusted for inflation in 2018 – cutting revenue to nonprofits. Not so for 2020.
There have been recent reports in the news concerning an executive order establishing a “payroll tax holiday” beginning September 1. Although we have seen very little in the way of details on the proposal it appears that it would take the form of a “deferral” of social security and possibly Medicare withholdings from an employee’s paycheck. It appears that this decision is voluntary for the employer.
Many clients have been asking us how to record their PPP loan once it is received. The correct answer is to record the deposit as a separate loan on the Balance Sheet. Only after the loan is forgiven should it be written off. When writing off the loan the corresponding account should be an income account called Loan Forgiveness. This will separate this income from all other business income you have for the year.
At Long & Long CPAs we find most small business owners are passionate about what they do. However, they might lack the knowledge to succeed financially and lose track of revenue and expenditures. With years of experience assisting start-ups and small businesses with accounting, bookkeeping and tax-preparation we've run across some common mistakes and some steps to avoid them. Most small business do not have a business plan and have not thought about how to price their products and services.
As a team we have had nearly 80 years of accounting experience. As individuals we bring knowledge from working with small to mid-sized companies and from various industries. We often bounce ideas off of each other to come up the best possible solution for all types of business and tax issues. We like working with small business of every type. Our public accounting background as well as our private industry background has made us uniquely qualified to become a “part-time” controller for small businesses.
Every company has different accounting needs. The way we start is to understand your business and discuss your accounting needs and concerns. We can discuss this in our office, over the phone or at your place of business. We enjoy having field trips to visit new businesses. It helps us understand the revenue making cycle. After discussing your needs, we will discuss a plan for how best to serve you. Are you starting a new business?
The workforce is tight and finding qualified workers is hard. To supplement your workforce, you may need to hire foreign workers/contractors. North Carolina has special regulations when hiring a foreign contractor. Special considerations with foreign contractors, as with all contractors you must get a W-9. Make sure the person filling it out checks the appropriate box as to type of entity.
Businesses in their first year of operation often have a loss. They are trying to build a customer base and establish themselves as a legitimate business. This can be expensive and the tax law limits how much of these “one time, first year expenses” a business can deduct. Startup costs include advertising, marketing, training and office expenses incurred before you open your business.