Let's start with a few of queries I've been hearing from our Charlotte small business clients about the second round of the PPP, as well as some of the new sections of the recent bill that have an impact on businesses.
Should I include the first PPP in determining whether I "lost 25% +" to qualify for the second round if I earned the first PPP?
As you may recall, a small business must have less than 300 employees and show a 25% revenue drop to qualify for a second PPP. However, any monies from the initial PPP should not be included in that revenue decrease amount.
You can also calculate this by quarter or fiscal year, whichever is more convenient for you. Many small businesses in the Gastonia area require assistance with these calculations, and that is what we are here to provide.
Is the percentage of the EIDL that I received as a "grant" considered taxable income?
Now... I'm sure there are a few more things on your mind. Send us an email or use this link to schedule an appointment: https://calendly.com/saragonzalez
But, if you're a local small business owner, I have some questions for YOU, reader...
I've compiled a list of them below. They're a follow-up to last week's post.
My Small Business Health Quiz in Charlotte (Part 2)
“Life is really simple, but we insist on making it complicated.” –Confucius
Regardless of national events or where PPP and EIDL stand, as a Gastonia (or beyond) small business owner, it's critical that you take a REGULAR, objective look at your company's legal and financial basis.
I can't think of a better time than now to get our tax paperwork prepared.
I started working on these last week and finished them tonight.
Take a look at each of these questions, and if any of your responses make you uncomfortable, write me an email. If it's not something we can handle, we can connect you with a knowledgeable advisor.
In any case, we can discuss them when we meet for your taxes.
Last week's Gonzalez's Small Business Health Quiz...
#1: Do you know how much your company is worth?
(Agreements to Buy and Sell)
#2: Is there a contingency plan in place?
(Asset Protection Strategy & Will)
#3: So, what's next?
(Business Succession Plan, among other things)
Now for the following set of questions...
#4: What are your plans for retirement?
Consider these questions: Do I know how much money I'll need in retirement?
- How much influence over the firm do I need to keep to ensure a comfortable retirement?
- Have I researched finance possibilities for important employees who want to buy me out?
- Do I want to be running my company full-time in five years?
- Is there any way to protect my retirement contributions if I become disabled?
Too many business owners regard their company as a "retirement cash cow"... However, no concrete plans have been established for how it may become that cash cow.
#5: Do you have all of your eggs in the same basket?
Consider the following:
- Other than my business, do I have any solid investments?
- Will my business assets only account for about a quarter of my retirement savings?
- Have I spent more than an hour preparing my retirement in the last year?
You could be in trouble if you haven't diversified your retirement income outside of your firm.
#6: Is there a REAL tax strategy?
Consider the following questions...
- Do I have a strategy in place to deal with changes in the tax code?
- Have I figured out my financial objectives – and how taxes will impact them?
- Will I be able to make the most of my tax-free earnings in retirement (and prior to retirement)?
- Is there a formal plan in place for my business's exit?
On the surface, all of these concerns appear to be “procrastinate-able”... However, if you can't say yes to more than a handful of the above questions, you could be in for a financial setback.
We will either assist you in resolving these concerns ourselves or put you in touch with someone who can. Use this link to create a calendar: https://calendly.com/saragonzalez
I appreciate our collaboration as well as your referrals. Warmly,
Kohari & Gonzalez PLLC
Please feel free to forward this article to a business associate or client in the Charlotte area (or beyond!) who could benefit from our help. While most of these articles are about company strategy, as you may know, we specialise in tax preparation and planning for families and small businesses.