Delta CPA Blog
for Business Owners, Entrepreneurs and Management Teams
Tax Notes December Issue
Tax Notes- BUSINESS
PPP Loans: The Good, the Bad and the Ugly
The Paycheck Protection Program (PPP) loan and its forgiveness process have been an ever-changing (and often confusing) ride so far. Click the link below to read the December issue of Tax Notes for Business with detailed information on the PPP loan program.
Tax Notes- INDIVIDUAL
No More Stretching: The New Law That Impairs the Stretch IRA Strategy
The Setting Every Community Up for Retirement Enhancement (SECURE) Act became law and was intended mainly to expand opportunities for individuals to increase their retirement savings and to simplify the administration of retirement plans. Click the link below to read the December issue of Tax Notes for Individuals with information on the SECURE Act.
From a college dropout with a brilliant business idea, to an excellent home baker starting an online bakery, entrepreneurs in the new millennium are changing the tides of traditional businesses. But with 50% of start-ups shutting their doors even before they hit the 5 year mark, the one thing that seems to deter some budding entrepreneurs is taking stock of the numbers that matter. Because numbers are the building blocks of a successful business.
The art of reading numbers and understanding what they are trying to tell you is at the core of a successful business. If you can’t make the numbers work for you, then no matter how great the idea, you will just not hit its maximum potential. Click below to see some of the numbers that you need to evaluate to create a strong, viable and successful business.
Small Business Saturday
The Saturday after Thanksgiving, November 28, 2020 the national spotlight will turn on an often overlooked engine of our country’s economic growth: small businesses. This more than ever it is important to support local businesses in our community.
Small businesses, or those with less than 500 employees, now comprise 99% of all U.S. employer firms. Over 23 million strong, small businesses is a sector of our economy that continues to grow rapidly. According to the Small Business Association, small businesses have created over 8 million jobs since 1990 and now account for more than half (54%) of all U.S. sales.
In 2010, American Express launched an initiative called Small Business Saturday to encourage people across the country to support small, local businesses. Over the ensuing years, shoppers have embraced the celebration, and each year the initiative gains in popularity. In 2015, 95 million people shopped at local retailers or dined in neighborhood restaurants spending over $16 billion, a 14% increase over the previous year.
Anchored between Black Friday and Cyber Monday, Small Business Saturday now stands on its own as a holiday tradition. Here are just some of the reasons it has gained in popularity:
- Money stays local. According to the Civic Economics - Andersonville Study of Retail Economics, for every $100 spent with a locally owned independent business, 68% stays in the community.
- Showcases locally made products and services. Locally owned businesses choose items, create menus, and offer services based on the resources, preferences, and needs of the community. Local small businesses often carry the one-of-a-kind or locally made products that make the distinctive holiday gifts.
- Local business owners give back. Studies show that local businesses donated to community causes at more than double the rate of chains.
- Adds to the vibrancy of your local community. Small businesses help shape a community’s identity, building unique character and charm.
This year take part in Small Business Saturday by shopping online or in-person at local small businesses.
Business Formation and Start-Up
Considering starting your own business? Know what kind of entity you will use for your business? Use our one sheet comparison tool to help you determine what business entity suits you and your business the best.
What is 'Essential' for your Business?
The word ‘essential’ has been widely used word since the beginning of the coronavirus pandemic. Governors across the U.S. defined ‘essential’ and ‘non-essential’ businesses determining who could remain operational and who had to close their doors or work virtually.
Beyond how a state defines ‘essential’, this is a great time for business owners to ask themselves the question – “What processes/steps in my business are ‘essential’?” The pandemic has changed how we do business and now is the time for business owners to review their internal processes to find efficiencies and increase productivity. Three areas to examine include:
1. Technology: It is important that you have the right technology in place for your staff to accomplish their jobs. You need to explore if you have the proper software programs available to keep your business running. You should also examine if there are programs you no longer use, but continue to pay monthly service fees.
2. Reporting: A key component to having the right software programs is the ability to generate reports. Being able to measure and evaluate different aspects of your business (productivity, cash flow, receipts, expenses, etc.) allows you and your management team to monitor how the business is functioning and performing.
3. Workflow/Production Process: Depending upon your business type – service or product based – it is important to review the processes within each department. This includes looking at staffing needs for workflow and production. As difficult as it is to discuss during these challenging times, now is the time to review if you are appropriately staffed for your business operations.
Now is the time to take an in-depth review of your business. Delta CPA Group can help guide you through the evaluation process. Our experienced team has worked with numerous businesses to assess their processes and procedures to find efficiencies, increase productivity and explore cost savings changes. Contact our team today to help your business move forward.
Small Business Loans & COVID-19
The Small Business Administration has updated two of its loan programs to help small businesses during the coronavirus pandemic.
- Economic Injury Disaster Loans (EIDL): This loan is available again for small businesses. A portion of EIDL loans--up to $10,000--can be made in the form of a forgivable advance. You can apply online for an EIDL loan via the SBA website.
- Paycheck Protection Program (PPP): With forgiveness standards recently relaxed, the SBA has now published an updated PPP forgiveness application to reflect the new standards. Meanwhile, if you intend to apply for a PPP loan (or you're ready to file for forgiveness), you'll want to work with your business lender to do so. Be aware that the deadline to apply for a PPP loan is June 30.
7 Reasons Adults Need a Lemonade Stand
My clients ask every year - how can they reduce their tax bill. Sure, I have a tool chest full of goodies, but you know how it is. Fancy tools are really needed when they are needed but only work for one job. The basic tools may be all you need to get the job done.
One great option for tax savings everybody can do is start a side business. No, you don’t need to devote countless hours to creating your next full-time gig. Earning just a little income gives you a great opportunity to deduct so many expenses that you would have still been paying for anyway.
Here are a few things that you would have purchased anyway that become deductible if used in your business:
- Home office – If you have a spare room that you can set aside as a home office, you can deduct $5 per square foot up to $1500. To claim a home office, the space must be used exclusively for the business and you cannot deduct more than the profit of the business. You are already paying for the space. Deduct it.
- Telephone – Did you know that in court cases 100% of your cell phone that is used in business can be deducted? As long as you have a landline in your home, there is no need to allocate personal use of your cell phone. This is also true for family members that have a legitimate reason for having a business phone.
- Auto miles – If you drive to Costco to get office supplies, deduct your mileage. It doesn’t matter if you pick up some personal items, too. You’ll probably need stamps, too. Deduct the miles.
- Travel – Here’s a good one. Get a customer or vendor in Orlando and have an appointment with them when you go to Disney. The whole trip won’t be deductible, but your flight will be. The rest of the family tickets probably won’t be deductible unless there is a business reason for them to be there. Make sure you are following the rules on this.
- Computer – At least a percentage of the cost can be deducted. Check with your advisor.
- Health insurance – This is limited to the income of the business but if you are paying for your own premiums, they can be a deduction to reduce your adjusted gross income. If you didn’t have a business, these premiums are treated as an itemized deduction and are not fully deductible.
- Pay your kids – It can’t get any better than this. If the kids really can perform tasks for the business, give them a paycheck and have them pay their own expenses. If you are a sole proprietor, not only are you shifting the income to a lower (probably zero) bracket, but you are saving on Social Security and Medicare taxes. You will need to give them a W-2 so make sure you get some help with this.