December 2020 – Larson Accounting Group

30 de December de 2020

A new coronavirus relief bill will provide $284 billion in loans for small businesses. Here are some key details.

President Donald Trump has signed into law a new $900 billion coronavirus relief and stimulus package. Among its provisions: An extension of last spring’s Paycheck Protection Program, allowing another $284 billion or so in forgivable, federally backed loans for ailing small businesses.

The initial program, overseen by the U.S. Department of Treasury and Small Business Administration, shepherded some $525 billion to more than 5 million recipients but was fraught with loopholes and liabilitiesthat raised countless issues throughout an already complex process.

The new Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act clarifies questions about the loan process, but also adds rules about applying for new loans and seeking forgiveness for old ones. The bill gives the Small Business Administration 10 days to implement the new rules, so more specific rules could be coming. Until then, borrowers should turn to their lenders for guidance.

Here are some answers to questions business owners might have.

How does this round of loans differ from the last one?

Some aspects are broadly the same. Applicants have between eight and 24 weeks to use the funds, with at least 60 percent going toward payroll and the rest toward eligible expenses like rent and utilities.

New loans are capped at $2 million, compared to $10 million before. Applicants must have no more than 300 employees, instead of up to 500, and must demonstrate at least a 25 percent drop in revenues from the fourth quarter of 2019 to the same period this year.

The bill expands the type of covered expenses to include things like cloud computing or remote-work software; and equipment for government-mandated sanitation and social-distancing, like sneeze guards or air filtration systems. It even covers “property damage and vandalism or looting due to public disturbances that occurred during 2020.”

One notable aspect of the new bill that’s not directly tied to new loans is an expansion of the employee retention tax credit, a facet of the Coronavirus Aid, Recovery and Economic Stimulus (CARES) Act that encouraged employers not to shed jobs. Originally, businesses that got Paycheck Protection Program loans were not eligible to claim that credit. Now they are.

If I already got one loan, can I get another one?

Yes. These are called “second draw” loans, and as long as you meet the qualifications above, you can apply. The deadline for all new loans is March 31.

Are any businesses eligible for more help than others?

New loan amounts are determined by a formula that involves payroll costs multiplied by a factor of 2.5 (again, capped at $2 million). Restaurants and other hospitality businesses may multiply those costs by 3.5, making them eligible for slightly more funding.

The bill restricts certain companies from applying for loans, including businesses specializing in political or lobbying activities — like the Florida Democratic Party, which received, then returned, $780,000 the last time around. Also excluded: Businesses with extensive dealings in China, or who have China residents on their boards.

Concert venues, theaters and museums, which had long lobbied for additional aid, are not eligible for new Paycheck Protection Program loans, but can apply for special “Shuttered Venue Operator Grants” worth up to $10 million.

How will this impact my existing forgiveness application?

If you got more than $150,000, it probably won’t. If you got less, the process should be much easier.

A few weeks ago, the government simplified forgiveness applications for businesses that got less than $50,000, requiring only a description of how much loan money was spent on payroll, and how many employees the recipient was able to retain as a result. The new bill ups that limit to $150,000. Affected businesses will not need to submit documentation supporting their claims, but should keep it on hand in case of an audit down the line.

If you’ve already applied for and received forgiveness, none of the new provisions apply — you’re done. But you can try to get a second loan.

By Jay Cridlin

by Larson Accounting

15 de December de 2020

One of the great benefits of a solar energy investment is the tax benefits. Solar system owners will not only eliminate their electric bill, but they also can recapture 26% of the system cost through the Federal Solar Tax Credit.

The tax credit will have a substantial impact on the payback of your system. However, it won’t be around forever. Make sure you’re prepared to get the most out of your investment by checking out this guide on how the credit works and when it will expire.

What Is The Federal Solar Tax Credit?

The Solar Investment Tax Credit (ITC), also referred to as the Federal Solar Tax Credit, gives solar system owners the ability to deduct 26% of the system cost from owed taxes.

In years past, the tax credit allowed you to recoup 30% of installation costs. However, in 2020 this credit began to step down. 2020 is the only year solar owners can save 26% on their system. In 2021, it steps down to 22%. In 2022 it steps down for the final time, and will remain permanently as a 10% discount for businesses only. 2021 will be the last year for homeowners to claim any tax credit.

If you’re not quite ready to go solar and would like to think about it, that time could end up costing you. Although going from 26% to 22% may not seem like a big drop, it’s still considerable savings you will miss out on.

How Does The Federal Solar Tax Credit Work?

First, there are two requirements that need to be met to claim the tax credit:

Youmusthavetaxliability.Thecreditcannotbeusedifyoudon’t pay taxes.
Thecreditisonlyavailableforsolarsystemowners.It’snot available for people who lease solar systems. In a lease scenario, the tax credit would go to the lessor (the system owner).

Here’s how it works: If you buy a solar system for $100,000 you would receive a tax credit of $26,000. It is important to understand that this is a federal tax credit that will offset taxes you owe; it’s not a grant that will pay out $26,000.

In the example above, you could reduce your 2020 taxes by $26,000. If you can’t use the full $26,000 in 2020 (maybe you only owe $18,000 in taxes), you could use the remaining $8,000 to recoup future taxes. However, if you have enough tax liability, the law does require the credit to be used in full the year your system is installed. The $26,000 balance can’t be spread out in increments over several years.

The law does differ on how any remaining money can be used for a homeowner versus a business.

Businesses and farms can use that $8,000 to recoup taxes paid during the prior year and then carry forward any remaining balance for up to 20 years until its fully used.

Homeowners can use the remaining $8,000 from the example above over the next five tax years until the full amount is used up.

There is no cap to the amount of your tax credit. You will receive the full 26% credit regardless of your system’s cost.

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Additional Tax Benefits for Businesses and Farms

For businesses, the tax benefits extend beyond the 26% Federal Tax Credit. In the recent Tax Cut and Jobs Act, the law changed to allow 100% bonus depreciation for commercial solar systems. This allows the entire cost basis of a solar system to be depreciated in the year it was placed into service.

For example, if you invest $92,000 in a solar system, your business could receive $48,000 or more of that investment back in year one, depending on your tax bracket. Other equipment investments in this same scenario would cost you $192,000 to match the tax benefits that come with a solar investment. That means you will spend nearly 110% more on most comparable equipment investments in order to receive the same tax benefits.

Don’t Miss Out On These Great Benefits

Are you ready to save on your taxes and reduce your energy costs?
We’re here to help! Contact us to request your free quote. Don’t miss out on receiving the full 26% tax credit.

Andy Schell
877.851.9269
3105 Lincoln HWY E.

by Larson Accounting

7 de December de 2020

Almost overnight, after the beginning of the pandemic, many companies had to adapt themselves to remote work. For some, this task was very easy, and even with the end of the lockdown they kept the home office, but yet, for many others, this fitting was a little more complicated.

As time goes by we see that this practice of working remotely will be increasingly widespread and thinking about making this transition easier, the Larson Accounting Group has developed some tips to make “working from home” as productive as working from the office.

1 – Have an organized space to work.

Pick a room in your home and make it your office, try to put in this space everything that is necessary to perform your job and remove everything that can become a distraction. When choosing this room, give preference a quiet and airy one.

2 – Create a routine

Establish a working day and stick to it, also set your break times for lunch, rest and coffee.

3 – Take breaks and stretch out

It is natural that after long periods of sitting, our body feels fatigue and pain. In order to avoid this, is highly recommended breaks for stretching. This way the muscles are relaxed and the stress is also relieved. Besides stretching, taking care of the posture is very important to prevent muscle aches and pains.

4 – Keep yourself hydrated

A very simple tip, but what makes all the difference is to stay hydrated. When our body is dehydrated we tend to feel headaches. In addition, our memory and thinking capacity are also affected. Therefore, drink plenty of liquid during the day, give preference to water, coconut water and isotonics.

5 – Disconnect from work at the end of the day

Is the stipulated working day over? Turn off your computer, leave your office, even if it is inside your home, and do your personal things. Although the home office has many benefits, it is important to know how to separate things and not end up being held hostage from work.

So, did you like the tips prepared by our team? How about sharing with your colleagues to spread the culture of remote working in your company? Being prepared for the most diverse situations is always worthwhile and #Larson is with you.