CPA Collective

There are still so many unanswered questions regarding PPP Loan forgiveness. Our advice to PPP Loan recipients is to collect all of the documentation you would need if you had to apply for loan forgiveness, make sure you would qualify if you had to apply, but wait to apply in case legislation is passed that would change the loan forgiveness application requirement or the ability to deduct expenses paid for with PPP Loan funds. Clear as mud? Timeline example: ... Received PPP Loan funds on 05/07/2020, 24 week covered period ends 10/22/2020, payments set to begin 08/22/2021. See more

TAX DEADLINE: OCTOBER 15 Individual income tax returns on extension Calendar year C Corporation income tax returns on extension Foreign bank account reports on extension Final deadline to fund a SEP IRA contribution for 2019

With the election just a month away, we thought we’d share a breakdown of the tax policies of both presidential candidates. Because after this week's debate....somebody has to get the information out there! For a more comprehensive look at their plans, check out our downloadable PDF, here: https://bit.ly/3cTTgP7. Not sure if you're registered to vote? Please check online at https://voterstatus.sos.ca.gov/ and if you live in California, be sure to get registered before the October 19th deadline. Remember, your vote matters!

Attention, S-Corp shareholders! Did you know that you can claim health insurance premiums paid for yourself, your spouse, and your dependents as a deduction on your personal income tax returns? Be sure to meet these requirements to ensure that your premiums are tax deductible: You must own more than 2% of the S corporation The cost of your health insurance premiums must be included in your W-2 wages (not subject to social security, medicare, or unemployment tax) The S Corporation must make the premium payments on behalf of the 2% shareholder, or the shareholder must be reimbursed by the S Corporation for the premium payments he or she makes

Meet, GOAT Fuela lifestyle brand focused on health-forward products, created by NFL Hall of Famer, Jerry Rice and his family. The term G.O.A.T. (Greatest of all time), often used to describe founder Jerry Rice, is the inspiration behind the brand that aims to tap into the frequency that fuels our individual and collective greatness. Their signature #GOATFUEL energy drink contains Cordyceps Sinesis mushrooms, originally discovered in the Himalayan mountains where local herders observed that goats consuming them became very strong. Check them out at www.goatfuel.com and give them a follow to see more from this awesome L.A. based brand! We our clients.

If you are a Schedule C filer that applied for a PPP loan, listen up: A new interim rule issued by the treasury department clarifies that deductible home-office expenses are qualified expenses for PPP loan forgiveness, but only to the extent they were deducted on 2019 tax filings (or if a new business, the borrower’s expected 2020 tax filings). Navigating PPP loan forgiveness can be tricky! If you need help, give us a call!

TAX DEADLINE: September 15th - Partnership income tax returns on extension - LLC income tax returns on extension - S Corp income tax returns on extension - Q3 estimated payments

Is an S-Corp the right type of entity for you? Limited liability companies and C Corporations can elect to be treated as an S Corporation to receive special tax treatment. Advantages: - May reduce self-employment tax for LLC Members - Helps C Corporations avoid double taxation - Provides liability protection for business owners... - May reduce entity level California tax burden Disadvantages: - Additional tax reporting requirements - Payroll requirements for owners - Only one class of stock allowed - Limited to 100 shareholders The choice to be treated as an S Corporation for tax purposes is not the right choice for everyone. It’s important to talk to both your attorney and CPA before making the decision. See more

If you received a PPP Loan you should know that the proportion of PPP funding that must be used on payroll costs to qualify for full forgiveness has dropped to 60% from 75%. Acceptable uses of funds are for payroll costs, mortgage interest, rent payments and utilities, Supporting documentation includes payroll tax filings, verification of number of employees on payroll and pay rates, cancelled checks, payment receipts and account statements. Make sure to keep adequate records of how you use your PPP Loan funds after they are dispersed to you because you will be responsible for submitting an application for loan forgiveness to your lender.

With schools closed and many people working from home, household employees (think: nannies, housekeepers, tutors, etc.) are on the rise. Did you know that the IRS defines a household employer as someone who pays an individual $2,200 or more in a calendar year to work in their home? If you’re considered a household employer by the IRS, then you need to pay Social Security and Medicare taxes on your employee. Your share is 7.65 percent of their wages. Your employee’s share is a...lso 7.65 percent, which you can choose to pay yourself or withhold from their wages. You may also be required to pay federal unemployment tax (six percent of wages) on up to $7,000 in wages and state unemployment tax (about two to five percent in most states). Misclassifying household employees as independent contractors by providing them a Form 1099 for filing taxes (or worse yet, providing no form at all) can result in serious FINES and PENALTIES! Payroll?! Sounds scary, but it’s not. There are plenty of companies like Care.com that make properly paying your household employees a breeze. Have questions? Give us a call, we can help. See more

Meet our wonderful clients Julie Sawaya and Ryan Woodbury, the co-founders of Needed., a thoughtful nutrition company on a mission to empower women to be optimally nourished before, during, and after pregnancy. Needed’s first products include an Omega-3 nutrient testing kit and an Omega-3 liposomal powder that’s 5x better absorbed and tailored to the needs of mamas-to-be. Needed is launching a better Prenatal Multi this summer. Up to 95% of women have nutritional deficiencies... during pregnancy, despite taking a prenatal vitamin. Needed is committed to changing this by delivering better products and education to help women identify their nutrition needs. Be sure to give them a follow to learn more about this growing, LA-based brand and to check out the supportive community of like-minded women and trusted health practitioners they've created. We our clients! See more

Identity theft is on the rise! With the news of the recent SBA hack and everyone entering personal information online for relief program applications, it’s a good time to take steps to protect your identity. Here are some helpful ways to get started: make sure you know who you are sharing your personal information with; store and dispose of anything containing personal information securely, especially your Social Security number. Always ask questions before sharing your per...sonal information; maintain appropriate security on your computers and other electronic devices by using complex passwords and secure data storage options; update sharing and firewall settings when you're on a public wi-fi network. Use a virtual private network (VPN), if you use public wi-fi. And if you discover that you've been the victim of identity theft, here are some next steps to consider taking: - Change your passwords especially if a company that you do business with has a breach of its databases - Review your credit reports to make sure that they don't include accounts that you have not opened. You can order it for free from Annualcreditreport.com. - Freeze your credit to prevent someone from applying for and getting approval for a credit account or utility services in your name. - Report identity theft to the Federal Trade Commission (FTC) online at IdentityTheft.gov to receive a recovery plan and pre-filled form letters to send to creditors. See more

If you have a side hustle that you claim losses for, tread carefully! The IRS could consider your business a hobby and the losses non-deductible. Here are a few ways you can establish a profit motive and steer clear of the hobby loss rules: - Keep accurate books and records - Use a dedicated business bank accountseparate from your personal bank account - Devote sufficient time and effort to your business - If something isn't working, document what changes you are making to a...ssure profitability in the future - Consult with legal and accounting professionals or other experts in your field See more