Jones & Roth CPAs & Business Advisors

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  • PPP Exclusive 14-Day Small Business Window in Process Now

    PPP Exclusive 14-Day Small Business Window in Process Now

    The White House announced Monday that beginning February 24 and ending March 9, an exclusive 14-day window would open up for small businesses with fewer than 20 employees to apply for PPP loans. This window applies to nonprofit organizations as well, and to businesses pursuing a first or second PPP loan. 

    In addition to the 14-day small business window, a modified loan formula will be employed for sole proprietors, independent contractors and self-employed business owners, allowing them to receive more funding than in the past by using their gross income in the application. Clarification and further details are expected shortly on this updated formula. 

    Another update is expanded eligibility to allow PPP funds to reach more businesses. Small business owners with past non-fraud felony convictions are now eligible to apply, and also those who have defaulted or been delinquent on student loan debt. In addition, lawful non-citizen U.S. resident business owners can apply using their Individual Taxpayer Identification Number (ITIN).  

    What does this mean for businesses with more than 20 employees? Many banks are still accepting applications, but will hold off on submitting them to the SBA until the end of the 14-day window. We urge all interested borrowers to check with their banker and work with their CPA to get applications ready, and to not delay as the PPP program closes March 31, 2021.  

     

  • Don’t Miss Out on Next Wave of PPP Funding

    Don’t Miss Out on Next Wave of PPP Funding

    The enactment of the Consolidated Appropriations Act of 2021 (CAA) has provided much needed relief to struggling business owners in providing a new wave of Payroll Protection Program funding (PPP). The CAA includes another $284 billion in funding for forgiveable loans through the PPP.

    Below you will find a summary of the latest information, which may be helpful to business owners:

    First Draw PPP Loans

    The SBA is reopening the PPP for First Draw Loans that either missed out on the first round of funding by not submitting an application, or other First Draw borrowers that previously returned some or all of their First Draw PPP loan funds. The rules are the same for the reopened First Draw Loans as the original program.

    Borrowers seeking a First Draw PPP Loan must apply no later than March 31, 2021 through any existing SBA7(a) lender or through any federally insured depository institution participating in PPP.

    Second Draw PPP Loans

    Borrowers that have previously received a First Draw PPP Loan as per above, can now apply for a Second Draw PPP Loan with the same general loan terms as the First Draw PPP Loan only if they meet the following eligibility criteria:

    • Previously received a First Draw PPP Loan and will or have used the full amount only for authorized uses,
    • Have no more than 300 employees, and
    • Can demonstrate that it has at least a 25% reduction in gross receipts for any one quarter of 2020 compared to 2019.

    The CARES Act, which created the PPP, limited allowable uses of forgiveable loan funds to payroll, mortgage, rent, and utility payments. The CAA expands the allowable uses to include the following additional expenses:

    • Covered operating expenses, including software or cloud computing services that facilitate business operations, product and service delivery, payroll processing, human resources, sales and billing, accounting or tracking supplies, inventory, records, and expenses,
    • Uninsured costs related to property damage, vandalism or looting during 2020 public disturbances,
    • Supplier costs according to a contract, purchase order or order for goods, in effect before taking out the loan, that are essential to the borrower’s operations, and
    • Worker protection expenses incurred to comply with federal or state health and safety guidelines related to COVID-19 (for example, personal protective equipment, ventilation systems, plastic partitions, and drive through windows).

    As with First Draw PPP Loans, in order to receive full forgiveness, a business must spend at least 60% of the funds on payroll over the covered period, which may range from 8 to 24 weeks.

    The maximum loan amount for Second Draw PPP Loans is 2.5X average monthly 2019 or 2020 payroll costs up to $2 million. Any businesses in the Accommodation and Food Services sector, the maximum loan amount is 3.5X average monthly 2019 or 2020 payroll costs up to $2 million.

    Borrowers seeking a Second Draw PPP Loan must apply no later than March 31, 2021 through any existing SBA 7(a) lender or through any federally insured depository institution participating in PPP.

     

    The Jones & Roth PPP Loan Forgiveness Task Force is here to support you. For more information or to speak with a member of the Jones & Roth PPP Loan Forgiveness Task Force, please contact us.

  • 2021 Reimbursement: What Your Practice Needs to Know

    2021 Reimbursement: What Your Practice Needs to Know

    2020 was clearly one for the history books, but 2021 will usher in another set of challenges — and opportunities – for your medical practice. This fast-paced, content-rich webinar will give you the knowledge you need as you begin the new year. From the fundamental changes to evaluation and management (E/M) coding — to 2021 Medicare reimbursement, this session will make sure you are prepared for 2021.

    Learn from nationally recognized practice management expert Elizabeth Woodcock, MBA, FACMPE, CPC.

    • Identify telemedicine regulations and virtual care reimbursement — and when they may end
    • Overview the E/M documentation overhaul — and other coding changes
    • Recognize the RVU update for 2021 — and how it will impact your practice

    Watch the Webinar

    PDF Resources:
    Webinar Slides
    Webinar Handouts

    Photo of Elizabeth Woodcock

    Elizabeth Woodcock is a speaker, author and consultant who specializes in helping physician practices achieve and sustain patient satisfaction, practice efficiency, and profitability. She is nationally recognized for her outstanding presentations and writings aimed at improving the business of medicine. Her education and expertise, combined with her humor and an engaging delivery, make her popular with physicians and administrators alike.

  • Key 2021 Dates for the Oregon Corporate Activity Tax

    Key 2021 Dates for the Oregon Corporate Activity Tax

    Heads up! The February 1st deadline to make the 4th quarter payment for the Oregon Corporate Activity Tax (CAT) is coming up on us quickly. To review, for the 2020 tax year, if you expect a Corporate Activity Tax liability of $10,000 or more, then you are required to make estimated quarterly payments.

    For quick reference, here is a link to the Oregon Department of Revenue’s How to Calculate the CAT Worksheet and our post about which businesses are subject to the tax, “6 Must-Know Facts about the Oregon Corporate Activity Tax (CAT).”

     

    Key Dates for 2021:

    • February 1 — Fourth quarter 2020 CAT estimated payments due.
    • April 15 — Last day to file CAT return without an extension or apply for an extension for filing a CAT return.
    • April 30 — First quarter 2021 CAT estimated payments due.
    • August 2 — Second quarter 2021 CAT estimated payments due.
    • October 15 — Last day to file 2020 CAT return with an extension.
    • November 1 — Third quarter 2021 CAT estimated payments due.
    • February 1, 2022 — Fourth quarter 2021 CAT estimated payments due.

     

    CAT forms can be found on the Department of Revenue website Forms Page by scrolling down to Corporate Activity Tax or entering Corporate Activity Tax in the search block.

    Relief options available to taxpayers negatively affected by the COVID-19 pandemic or wildfires can be found on the agency’s Tax Relief Options page.

    For assistance in estimating quarterly tax payments or preparation of the annual CAT tax return due April 15, 2021, be sure to contact your tax advisory team.

     

  • Webinar: What Every Nonprofit Needs to Know about Form 990

    Webinar: What Every Nonprofit Needs to Know about Form 990

    In this webinar, we share best practices and policies for ensuring compliance with reporting requirements. You’ll gain valuable information that could affect the way you raise funds, market, and run your organization.

    “What Every Nonprofit Needs to Know about Form 990”
    Presenters: Fritz Duncan, CPA, Laura McKay, CPA, Aaron Sachs, CPA

    View Webinar Recording

    Learning Objectives

    • Identify changes on the 2019 Forms 990 and 990-T
    • Clarify IRS requirements, key schedules, and special considerations
    • Utilize the Form 990 as a Marketing Tool
    • Identify Form 990-T requirements regarding Unrelated Business Income

    Who should attend?

    • Executive Directors
    • Chief Financial Officers
    • Controllers
    • Financial Directors/Managers
    • Board Members

  • Understanding Qualified Disaster Relief Payments

    Understanding Qualified Disaster Relief Payments

    Business owners and employees alike have endured possibly the most stressful year of their careers thus far. With the end of 2020 fast approaching, we are focused on identifying tax strategies for our business owners to take advantage of. A tax strategy that likely has not been considered for several years has come to life again in 2020 and provides a unique opportunity.

    Internal Revenue Code (IRC) Section 139 outlines the payment of qualified relief payments to employees during a federally declared disaster. The tax provision received attention for being an important tool for businesses during the Hurricane Katrina disaster.

    On March 13, 2020, President Trump declared COVID-19 a Federal disaster in all 50 states. As a result, the door has been opened to utilize the opportunity that §139 provides.

     

    What is IRC Section 139? 

    IRC Section 139 allows an employer to make qualified disaster relief payments to employees for costs they incurred as a result of the declared disaster. The payments made to employees are not reported on their W-2 and are not subject to income tax withholding, FICA or FUTA payroll taxes. Additionally, the employer is allowed to fully deduct the relief payments and is also not subject to tax on these payments.

     

    What payments qualify for IRC Section 139?

    During the COVID-19 pandemic many employees have transitioned to work from home or to modified work schedules, which has had a ripple effect on their usual routine. Employers can make a qualified relief payment to assist their employees’ transition to their new work expectations and other accommodations. To qualify, the expense simply must be incurred as a result of the COVID-19 pandemic. Some common permissible expenses include: equipment necessary to work from home, increased cost of internet, increase in day care expenses, funeral expenses, and personal protective equipment.

     

    What else should you know?

    Employers who make disaster related payments can provide a lump sum payment that reasonably estimates the amount of expenses the employee has incurred. The employer is not required to maintain itemized receipt documentation for how the employee utilizes the relief payment.

    If your business and employees were impacted by the COVID-19 pandemic you should consider utilizing a IRC Section 139 qualified disaster relief payment for your employees. Contact your tax professional to talk about this opportunity in more detail.

  • NEW Stimulus Bill Signed Into Law!

    NEW Stimulus Bill Signed Into Law!

    On December 20th, Congress finally came to an agreement on a new stimulus bill for individuals and small businesses. 

    Here is a summary of the significant updates contained in the bill voted on by Congress:

    • A second round of stimulus checks for individuals
    • An extension on the Federal unemployment benefits at $300 a week for 11 more weeks
    • An additional $284 billion in Paycheck Protection Program “Round 2”
    • Business taxpayers will be eligible for a second PPP loan if they have 300 or fewer employees and had revenue loss of 30 percent in any quarter in 2020
    • Local chambers of commerce will be eligible for PPP loans
    • The new changes will attempt to ensure that the smallest businesses and underserved communities have the opportunity to receive the new PPP loans
    • The types of expenses that PPP loans can be used for and be forgiven will be expanded to include other items
    • There will be a simplified loan forgiveness process for businesses that receive loans of $150,000 or less
    • Most importantly, the expenses paid with PPP loan proceeds will be tax deductible and the PPP loan will continue to be tax-free

    There are still some steps needed before the bill is written into law and if you have any questions you should consult with your Jones & Roth tax advisor.

  • Considerations for Construction Companies Regarding Revenue Recognition Standard Topic 606

    Considerations for Construction Companies Regarding Revenue Recognition Standard Topic 606

    Owning and operating a business is tough. It comes with a sometimes overwhelming amount of stress and responsibilities; maintaining client relationships, meeting deadlines, retaining and recruiting invaluable employees, adapting to new technology, keeping up with the latest laws and regulations, and the list goes on.

    Those are clearly difficult tasks, and that’s without consideration of the new revenue recognition standard that was scheduled for implementation for nonpublic and not-for-profit companies with annual reporting periods beginning after December 15, 2018. On June 3, 2020, the Financial Accounting Standards Board (FASB) made the decision to delay the implementation of the revenue recognition standard for one year, making it effective for all nonpublic and not-for-profit entities with annual reporting periods beginning after December 15, 2019.

    The new standard, Topic 606 Revenue From Contracts with Customers, sets guidelines for how entities will be required to start recognizing revenue in accordance with U.S. Generally Accepted Accounting Principles (GAAP) by allocating contract prices to specific identifiable performance obligations.

    This standard specifically affects the construction industry as it relates to the complexity of traditional contract agreements, performance obligations, variable consideration, and pre-contract costs. Revenue recognition may be affected by factors such as the likelihood of performance penalties or the potential success of a pending claim. 

    Implementing and maintaining a detailed job costing schedule will play a key role in accurately capturing how costs are allocated to each individual job, and in turn how revenue is recognized on that job according to U.S. GAAP. 

    Even though the required implementation of this standard has been delayed for those who have not already implemented, it is important to communicate with your CPA in order to strategize specific ways to ease the transition to this new standard of recognizing revenues, as many bonding agencies and banks will not allow financial statements to be presented with a departure from U.S. GAAP basis.

    Now is a great time to review the job costing structure within your company and assess the viability of maintaining U.S. GAAP financial statements, as well as analyzing contracts for elements of variable consideration. Contact a CPA on the Construction Team at Jones & Roth for more information on these standards. 

  • Family First Coronavirus Response Act (FFCRA): Small Business Exemption

    Family First Coronavirus Response Act (FFCRA): Small Business Exemption

    The Families First Coronavirus Response Act (FFCRA) requires that employers provide paid sick leave or expanded family and medical leave for certain COVID-19 related situations through December 31, 2020. 

    Generally, the act provides that employees of covered employers are eligible for:

    • Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
    • Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine, or to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
    • Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

    Small businesses with 50 or fewer employees (including both full-time and part-time) may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.

    For an employer to qualify for the exemption, an authorized officer must determine that one of the three following conditions are satisfied:

    1. The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;  
    2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or  
    3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

    If the employer qualifies based on the employee count and satisfies one of the above conditions, the small business exemption can be elected. This election is made by the employer documenting how your business meets the criteria explained above.

    Further information can be obtained from the Department of Labor website.  If you have additional questions or concerns, you should consult with your Jones & Roth tax advisor. 

  • The “Perfect Storm” for Estate Planning and Lifetime Gifts

    The “Perfect Storm” for Estate Planning and Lifetime Gifts

    The pandemic has brought unprecedented challenges to the way we do and think about things. People are worried about their financial future, and what may be coming around the corner in the form of policy and consumer behavior. There is talk about looming recession and an economic down turn. The clouds gathering around us are dark and gloomy.

    In addition to learning how to live our lives during a pandemic, the US is going through an election year. If there is a power swing at the federal government level this November, we could be looking at losing record-high Gifting and Estate Transfer Tax Exemptions. This article hopes to pierce the veil of darkness with some rays of light in the form of planning opportunities around your estate.

    A person’s estate is simply the things they own minus the liabilities they have—some would call this your net-worth. Through the history of our tax system, there have been many taxes assessed on one’s estate. Most recently, our federal tax system moved from taxing estates over $5 million to only taxing estates well over $11 million. If you are wondering how this applies to you, Oregon taxes estates at just $1 million, so with a house and a retirement account it can be easy to get to these limits.

    Estate planning aims to do its best to mitigate an individual or a couple’s desires (where and what they would like their estate to do when they pass away) with taxes (how much their estate’s beneficiaries will have left over). Potential estate plans and strategies are outside the scope of this article, but here are a couple very specific opportunities and possibilities.

    Lifetime Gifting

    The first opportunity has to do with lifetime gifting and the impending economic downturn. Gifts are always based on the fair-market-value (FMV) of an asset when it’s gifted, not the original cost. Gifting in a hot, growing economy generally means you will be limited to gifting less because the underlying value of the assets you are gifting will be higher. You can gift $15,000 of value to an individual annually, without being required to file a federal gift tax return. With the lifetime gift exclusion at well over $11 million, you can gift a whole lot of value without having to pay a gift tax (you utilize your lifetime exemption instead).

    Ray of light take away: “You can gift more when values are down.”


    Changes to Lifetime Exemption Amount

    The next point focuses on the possibility of a new direction in the federal government, and the potential of the lifetime exemption being lowered from over $11 million to much lower. Some are speculating $3.5 million and the gift/estate tax rate being raised from an effective rate of 40% to something closer to 60-80%. Our $11 million exemption is unprecedented and came in the wake of the Tax and Job Cut Act that was passed near the end of 2017. Exemptions have been as low as $0, $1 million, and $2 million in very recent years. Oregon has not felt a need to increase or decrease their exemption and it has remained a constant $1 million, with no sign that it will change in the near future. Since Oregon does not tax gifts, there should be no hesitation from a state estate tax implication to gift by using up your record-high federal exemptions.

    Ray of light take away: “There is still time to do unprecedented levels of lifetime gifting.”


    Summary

    In summary, because we are looking at a potential pause in FMV growth and/or a decrease in FMV for normally appreciating assets, and we have unprecedented lifetime gift exclusions, now could be a great time to take another look at your estate plan.

    If you have questions about your estate, discuss these opportunities/possibilities with your advisors. There is an election in November, and there are unknown lasting effects of the pandemic that will come into play with asset valuation in the coming months and years that make this a “Perfect Storm” for life-succession and estate planning. Please reach out to us if you would like further information regarding your estate planning or any other issue.