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Business Preparation for Stimulus #2 What you should do IMMEDIATELY to be prepared

January 4, 2021 @ 9:55 am

Business Preparation for Stimulus #2 What you should do IMMEDIATELY to be prepared The new COVID Relief bill was signed by the President on December 28th. We covered the highlights of the law in an article you can find HERE.  This Relief Act includes two significant programs that are available to closely-held businesses that are in need of financial assistance. The two primary programs available to small business are: Payroll Protection Program – Second Round (PPP-2). We expect applications for this second round to open up within the first couple weeks in January. This second round has been allocated $284 billion, which is less than the initial PPP funding level and may get claimed quickly. As a result, we recommend those in need determine their eligibility now so that prompt application can be made once available. Employee Retention Tax Credit (ERTC). These credits were originally only available for businesses that did NOT also claim the PPP loan. But, the new Relief Act changed that. You can now qualify for the ERTC and the PPP loan. To qualify for the PPP-2 loan, your business must show a 25% reduction in revenue in ANY QUARTER of 2020 – compared to the same quarter …

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Trump Signed the Relief Act: Key Provisions for BiggsKofford Clients

December 28, 2020 @ 5:51 pm

Trump Signed the Relief Act: Key Provisions for BiggsKofford Clients President Trump has finally signed the coronavirus relief package that was passed by Congress last week. Here are the important things our clients are likely interested in hearing: 1. Second Stimulus Payment A second stimulus payment will be available, the details of which are as follows: $600 for each individual filer $1,200 for married or joint filers $600 for any dependents age 16 and under In order to qualify for the full second stimulus payment, you will need to have earned less than $75,000 (for individuals) or $150,000 (for married/joint filers) in 2019. If your adjusted gross income is higher than those thresholds, then the stimulus payment is reduced by $5 for every $100 of adjusted gross income over those thresholds. As a result, a single tax filer would see no stimulus payment if their adjusted gross income is $87,000 or higher. A married couple would phase out completely with adjusted gross income of $174,000. Given both the delay in the bill being signed as well as the holiday break, it will likely be several weeks. The first people to get payments will be those that have their direct deposit …

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PPP2 – Another COVID-19 Relief Bill on Its Way!

December 23, 2020 @ 8:21 am

The House of Representatives and the U.S. Senate passed a $900 billion COVID-19 relief bill on Monday night which is expected to be signed in to law by President Trump at some point very soon. We discussed our early impressions of this news in a previous newsletter, HERE. There have been some important updates since then. This new relief bill includes different elements that are impactful to our clients: Tax law changes as well as a new PPP Loan (PPP2). Once this bill is signed and becomes law, BiggsKofford will be sending separate detailed articles to describe the PPP2 Loan details and highlighting Tax Law changes. Bill Summary: The bill has several important provisions initiated in an attempt to stimulate the economy. As summarized in an article by Jeff Drew in the Journal of Accountancy HERE, some of the key points to be aware of: $325 billion designated for struggling small businesses to include: $284 billion to fund another round of PPP loans; $20 billion to provide EIDL Grants to businesses in low income communities; $15 billion to live venues, independent movie theatres, and cultural centers. $166 billion in economic stimulus payments to individuals. $600 to each qualifying adult and dependent child of …

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PPP TAX DEDUCTIBILITY UPDATE!

December 21, 2020 @ 5:07 pm

Congress announced yesterday that a new, $900 billion, COVID relief package is coming. This will include another round of Paycheck Protection Program (PPP) loans as well as a defined answer to a burning question for many, expenses paid for with forgiven PPP funds WILL be deductible! As we discussed in an earlier article, found HERE, the PPP funds were not intended to be included in taxable income. However, the IRS stepped in and found a work around by not allowing ordinary tax deductions for expenses paid with tax free funds. This essentially resulted in the PPP loans being taxable which would have left many small businesses with a large tax bill for 2020. To the relief of many, Congress clarified that the deductions will still be recognized regardless of forgiveness, stating that was the original intent of the CARES Act. In addition to the deductibility of expenses paid for with forgiven funds, the proposed bill also states that “no deduction shall be denied or reduced, no tax attribute shall be reduced, and no basis increase shall be denied”. In short, the provision indicates that any income tax basis increase that occurs as a result of receiving the loan will not be lost upon forgiveness of that loan. Another Round of …

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ARE YOU READY TO SCALE UP YOUR BUSINESS? January Seminar Invite!

December 18, 2020 @ 11:34 am

BiggsKofford is again sponsoring a fantastic and powerful planning workshop: Are You Ready to Scale Up Your Business? The program is Wednesday, January 13, 2021 Online/Virtual: Participate from your Computer. Many BiggsKofford clients have benefited from this program that provides an opportunity to “work on your business”. Our colleague, Chuck Kocher, local business coach and owner of The Transformation Company is hosting this workshop. Scaling Up Workshop Overview  – (Click here for a link to a PDF with more information) You will learn the essentials that make the Scaling Up system work quickly. Learn best practices through lectures, hands-on exercises, group discussions, and coaching demonstrations. The workshop will also focus on: The 4 Key Decisions that all growth companies must make in the areas of: People/Strategy/Execution/Cash Helping you gain an understanding and then to begin completing a draft of the One Page Strategic Plan. Sharing best practices/tools/models used by the best Scale Up companies in Colorado and all around the world. Getting you and your team aligned on the main priorities to achieve success in 2021 and beyond. You will benefit massively from this workshop if you are: Either a For-Profit Business or a Non-Profit Organization Committed to scalable and sustainable growth An investor in learning and building your leadership team and culture Looking to disrupt …

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IRS Introduces the New Form 1099-NEC

December 8, 2020 @ 6:52 pm

The IRS has introduced a new Form 1099-NEC, Nonemployee Compensation. It’s a sibling to Form 1099-MISC and replaces it for certain purposes. You must file it for each person in the course of your business to whom you have paid at least $600 during the year for the following: Services performed by someone who is not your employee (including parts and materials) (box 1). Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish (box 1). Payments to an attorney (box 1). The IRS has provided additional guidance about what exactly is nonemployee compensation. If the situation meets all four of the following cases, it’s an NEC situation: You made the payment to someone who is not your employee. You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations). You made the payment to an individual, partnership, estate or, in some cases, a corporation. You made payments to the payee of at least $600 during the year. A partial list of payments that belong on a Form 1099-NEC includes the following: Professional service fees, such as fees to attorneys …

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Important PPP Forgiveness Update

November 19, 2020 @ 4:15 pm

PPP Forgiveness Update On November 5th, BiggsKofford wrote an article providing an update on the PPP Loan Forgiveness rules. That article can be found HERE. In that article we recommended deferring your forgiveness application until 2021, thereby possibly allowing the deduction of qualified expenses or at least buying time for Congress or the IRS to clarify the issue. Well… The IRS has weighed-in on that concept. The IRS just released Revenue Ruling 2020-27 which essentially eliminates the possibility of deducting those expenses. Instead, this Ruling indicates taxpayers must reduce their deductions in 2020 even if they are still planning to obtain forgiveness in 2021. Anyone that claims those deductions and later obtains forgiveness would need to amend their 2020 tax return to remove those deductions. Absent any intervention by Congress or the Tax Court, taxpayers will now be required to file their returns following this Ruling, as taking a contrary position would not be compliant. That said, this subject is being argued by many taxpayer advocacy organizations who will continue to lobby Congress and/or take this issue through the Courts to test the IRS’ legal grounds.  We will keep a close eye on those efforts and inform you of any …

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Scaling Up Workshop Invite

@ 9:13 am

Scaling Up Workshop Invite We are happy to announce that BiggsKofford is sponsoring a fantastic and powerful planning workshop: Are You Ready to Scale Up Your Business? The program is Wednesday, December 2, 2020 Online/Virtual: Participate from your Computer. Many BiggsKofford clients have benefited from this program that provides an opportunity to “work on your business”. Our colleague, Chuck Kocher, local business coach and owner of The Transformation Company is hosting this workshop. Scaling Up Workshop Overview  – (Click here for a link to a PDF with more information) You will learn the essentials that make the Scaling Up system work quickly. Learn best practices through lectures, hands-on exercises, group discussions, and coaching demonstrations. The workshop will also focus on: The 4 Key Decisions that all growth companies must make in the areas of: People/Strategy/Execution/Cash Helping you gain an understanding and then to begin completing a draft of the One Page Strategic Plan. Sharing best practices/tools/models used by the best Scale Up companies in Colorado and all around the world. Getting you and your team aligned on the main priorities to achieve success in 2021 and beyond. You will benefit massively from this workshop if you are: Either a For-Profit Business or a Non-Profit Organization Committed to scalable and sustainable growth An investor in learning and building …

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PPP Loan Forgiveness Checklist

November 13, 2020 @ 8:20 am

PPP Loan Forgiveness Checklist BiggsKofford has created a PPP Loan Forgiveness Checklist that can be downloaded from our website HERE. PPP Borrowers may find this Checklist helpful to determine which Forgiveness Application form they should be completing, and what documentation they will need to gather. In a recent article that you can download HERE, we described the PPP Loan Forgiveness process, deadlines, tax consequences and more. In that article, we recommended that borrowers gather all the documentation and have the application forms completed in the next couple months. Then we suggest that you wait until next year to submit with your Lender, once we have clarity on taxation and application issues. As we also noted in the last article, BiggsKofford’s PPP Loan Specialists are now preparing Forgiveness Applications for clients. If you would like BiggsKofford to assist with your Forgiveness Application process, please call our PPP Loan Specialists and we are happy to assist.

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Deadline Approaching: Update Sick and Leave Time Policy

November 6, 2020 @ 4:19 pm

Deadline to Update Sick and Leave Time Policy is Approaching As we reported in an earlier eNews release, which can be found HERE, the Governor signed the Healthy Families and Workplaces Act on July 14, 2020. The Act goes into effect on January 1, 2021. Starting January 1, 2021, this new sick leave law applies to all employers in Colorado, except the Federal Government. The accrual of paid sick leave portion of the law goes into effect for employers with 16 or more employees on January 1, 2021. All employers are impacted starting on January 1, 2022 regardless of employee count. The law states that an employer can satisfy the requirements of this law if the employer already has a policy that meets or exceeds the requirements of this law. Since there is no state law requiring paid vacation, if a company has any existing PTO policy (including vacation) that exceeds the new minimum requirements, then they are in compliance with these new rules and do not need a separate sick policy.  However if you maintain separate sick and vacation banks for employees, the sick bank policy must comply with the 48 hour sick leave rule. Our interpretation of the policy …

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PPP Loan Forgiveness – What You Need to Know

November 5, 2020 @ 5:50 am

Forgiveness – The final chapter in the PPP Loan process. While most borrowers have completed their “Covered Period” to spend the money, and might be ready to apply, many lenders are still not accepting applications. This is causing a lot of confusion about the application deadline, when to apply, tax consequences, required documentation, etc. Below, we’ve tried to answer many of these questions – to the extent we have answers. Forgiveness Application Deadline – When Must You File? Originally, the SBA indicated there would be an October 31, 2020 deadline. Of course, that date came and went without an ability to even submit forgiveness applications with many lenders. The current deadline for forgiveness is now 10-months after the end of your “Covered Period”. Remember, your Covered Period was originally the 8-week window after you received your loan. But, this was extended to allow an optional 24-week period. Quick math: Most borrowers (including most of our clients) received their loans during the month of April 2020, with the earliest possible loans in the first week of April. Therefore, the earliest possible deadline for forgiveness application would be near the end of April 2021, assuming an 8-week Covered Period. Or, more likely borrowers …

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BiggsKofford Expands with a Denver Office!!!

November 4, 2020 @ 5:14 pm

BiggsKofford Expands with a Denver Office BiggsKofford has expanded to now include an office in the Denver Metro area. Our new offices are located in the Denver Tech Center: 8400 E Crescent Pkwy, 6th Floor Greenwood Village, CO 80111 (720) 797-9090 BiggsKofford is one of Colorado Springs’ premier CPA firms after being in business for over 35 years. During that time we have increasingly added clients and employees in the Denver market, making a Denver office expansion a logical step in our firm’s growth.  Many of the larger firms in Denver have recently merged with national groups, leaving a void for clients seeking a locally-owned CPA firm.  As a result, BiggsKofford is now one of the largest locally-owned CPA firms serving the Denver market. Our Colorado Springs office has also continued to grow and we will be announcing the addition of eight new employees who have recently accepted positions with our firm. The Colorado Springs office will remain our primary location and we continue to be committed to serving the Colorado Springs community as much as ever!

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SBA Streamlines PPP Forgiveness for Loans of Less Than $50,000!

October 9, 2020 @ 3:46 pm

SBA Streamlines PPP Forgiveness for Loans of Less Than $50,000! A new interim final rule (IFR) provides new guidance concerning forgiveness and loan review processes for PPP loans of $50,000 or less. On Thursday, the SBA released a streamlined application, Form 3508S, designed specifically for those who borrowed less than $50,000. The forgiveness is not automatic, but it does remove some of the more complicated and time consuming aspects of the application. A borrower of a PPP loan of less than $50,000 is no longer required to reduce the amount eligible for forgiveness if the borrower: Reduces the salary or hourly wage of an employee (who earned less than $100,000 in 2019) during the “covered period” following the borrowing relative to the first quarter of 2020, or Reduces full-time equivalent employees (FTEs) during the covered period relative to a base period. The two-page forgiveness application, Form 3508S, includes certifications from the borrower but does not require calculations to be submitted with the application. Applicants must submit documentation verifying forgivable payroll and non-payroll expenses. Borrowers are required to retain the documentation supporting their certifications for six years, but do not need to submit it. Once the application is received, the lender …

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New funding available: Provider Relief Fund Phase 3 General Distribution

October 6, 2020 @ 3:33 pm

New funding available: Provider Relief Fund Phase 3 General Distribution   Additional Funding Released Starting Oct. 5, you can apply to receive funds based on assessed revenue losses and expenses due to COVID-19. The opportunity to receive up to 2% of annual revenue from patient care remains active. As released from HHS: Healthcare providers, including your organization, may now apply for the recently announced Phase 3 General Distribution of the Provider Relief Fund (PRF). The U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), will be distributing up to $20 billion in Phase 3, as part of ongoing efforts to offer financial support to healthcare providers for expenses and lost revenues attributable to the coronavirus disease 2019 (COVID-19). You may be eligible for additional funding from the Phase 3 General Distribution. Applications for Phase 3 opened on Oct. 5, 2020 and will close on Nov. 6, 2020 at 11:59 p.m. ET. Who is eligible? You may be eligible regardless of whether you previously were eligible for, applied for, received, accepted, or rejected payment from prior PRF general distributions. You should apply for funding if you experienced expenses and/or lost revenues attributable to COVID-19 …

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HHS Provider Relief Fund Reporting Guidance

September 22, 2020 @ 11:25 am

HHS Provider Relief Fund Reporting Guidance On September 19, 2020 the US Department of Health and Human Services (HHS) issued Post Payment Notice Reporting Requirements.  All recipients of Provider Relief Fund (PRF) payments are required to comply with the reporting requirements described in the Terms and Conditions and specified in future directions issued by the Secretary.  Below is a link to a six-page directive on reporting requirements. Final Reporting Data Elements – PDF: This document provides the complete, detailed information on provider reporting guidelines, including intent, use of funds, and data elements requested. The purpose of this notice is to inform Provider Relief Fund (PRF) recipients that received one or more payments exceeding $10,000 in the aggregate of the data elements that they will be required to report as part of the post-payment reporting process. This is a supporting document to the July 20, 2020 Post-Payment Notice of Reporting Requirements (General and Targeted Distribution Post-Payment Notice of Reporting Requirement – PDF). The reporting system will now be available in early 2021. BiggsKofford Executive Summary: Reporting is available starting early 2021, but we recommend tracking qualified expenses, lost revenue and maintaining documentation before year end. Relief funds can be applied toward lost revenue up to …

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COVID-19 RESOURCES