May 2020 Newsletter
Good morning to all of you! I hope you are all well.
Today is May 15th which, historically, has been the deadline for filing Form 990 for Non-profit organizations, however, this deadline was postponed in the same Treasury notice that moved the personal tax filing deadline out to July 15th. If you are concerned about your Nonprofit organization’s filing due date, please let us know.
Thank you to our clients who have worked hard to address security in their remote workplaces. We are only as secure as our weakest link and we truly appreciate all of you who use our Citrix Sharefile system to keep us all safe!
In today’s news, the House is expected to vote on a new relief bill called the Health and Economic Recovery Omnibus Emergency Solutions Act or HEROES Act. This bill is lengthy and contains many complicated provisions, but it is in the very preliminary stages. We will watch to see if it moves forward.
The Senate has introduced a bill called the Small Business Expenses Protection Act of 2020 (“the Act”), which would allow some small businesses to deduct from their taxes expenses paid with their forgiven Paycheck Protection Program (“PPP”) loan. This is of great importance to all small businesses who received PPP Loan funds to eliminate the potential tax impact and we are watching its progress closely.
And, the SBA issued guidance this week regarding a safe harbor for PPP Loans under $2 million. This was a worry for some small businesses that accepted PPP Loans. The SBA has provided this safe harbor limit of $2 million so that any business that accepted Paycheck Protection Program (PPP) funds of less than $2 million will be assumed to have performed the required certification concerning the necessity of their loan requests in good faith.
This month, we have been focused on modeling and forecasting for our small business clients. We know that many of you have secured PPP Loans and we are working with quite a few of you to track and budget to plan for maximum forgiveness. We understand that every small business is different, and the challenges vary greatly depending on the ability of the business to open fully with new protections in place or face continued limitations and restrictions. Decisions regarding unemployment, layoffs, bonuses, raises, and incentives are extremely difficult, and we have found that modeling is a great tool. Crystal Brady, our accounting manager, has developed a spreadsheet for our team to use in modeling for PPP loan forgiveness, and the AICPA has developed one for the public as well. Their tool is currently offline but is expected to be available on their website soon:
If you have not secured PPP Loan funding and your business or nonprofit organization has suffered because of the COVID-19 crisis then we suggest that you contact your bank to discuss. As of this morning, there were funds available from Round 2 for the PPP loan program. The PPP Loan may not be good for everyone, but it should be considered in connection with all other resources available to small businesses and nonprofit organizations.
As a reminder, the IRS has required that economic stimulus money sent to deceased people must be returned by their loved ones. Please be sure to follow the instructions on the IRS “Frequently Asked Questions” site for guidance:
The July 15th postponement also provided more time to make contributions to some retirement accounts for 2019. If you are facing high tax bills for last year and are interested in talking about retirement contribution options, please let us know.
We have been notified by many clients who have received grants for small businesses. Be sure to check out your local government websites and look for resources available to your profession. One that came up recently was from the Local Initiatives Support Corporation or LISC. Click here for more information:
As we hear of more opportunities, we will be sure to share them through these emails and through our website. Watch for new content as we add a blog page and videos to help provide better clarification and up to date information at www.mcnurlincpa.com.
Thank you, all, for taking the time to read through to the end! I continue to be thoroughly impressed with the professionalism, transparency, and compassion that I’ve seen in our office and from each of you and I appreciate all you are doing to support us and each other.
Take care and stay strong,
Certified Public Accountant