Professional Accounting Blog

    Accounting For Your Prosperity

    Working Capital Adjustments – Why and How?

    Posted by John Nicklas on May 11, 2020 1:22:51 PM

    Topics: Accounting & Auditing, Accounting and Tax Resource

    In the accounting world, working capital is defined as current assets minus current liabilities. Businesses need a minimum amount of working capital to be able to pay employees, buy inventory and maintain their normal day-to-day operations.

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    The IRS Clarifies the Deductibility of PPP-Funded Expenses

    Posted by Jonathan Ciccotelli on May 8, 2020 8:46:06 PM

    Topics: Tax Planning & Strategies, Small Business, Accounting & Auditing, Accounting and Tax Resource, COVID-19

    The IRS has issued new guidance addressing a question that has lingered since the launch of the Paycheck Protection Program (PPP) — whether expenses paid for with forgiven, tax-free PPP loan proceeds are deductible business expenses under Section 162 of the Internal Revenue Code (IRC). The guidance in IRS Notice 2020-32 doesn’t provide the answer borrowers hoped for, but that may yet come.

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    SBA Extends the PPP Repayment Deadline for Self-Certification

    Posted by Jonathan Ciccotelli on May 6, 2020 9:59:54 PM

    Topics: Tax Planning & Strategies, Small Business, Accounting & Auditing, Accounting and Tax Resource, COVID-19

    The Small Business Administration (SBA) has extended the repayment deadline for Payroll Protection Program (PPP) borrowers that wish to take advantage of the “good faith” self-certification of eligibility option. The deadline is now automatically extended from May 7, 2020, to May 14, 2020.

    Companies that repay their loans by that date preempt the possibility of criminal liability if they’re subsequently found ineligible for PPP loans. The loans are intended to help small businesses with fewer than 500 employees weather the novel coronavirus (COVID-19) pandemic, but some large companies have applied for and received funds.

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    Ohio Local Wages During CoVid-19: Tracking Remote Work Wages

    Posted by Meaden & Moore on May 5, 2020 3:00:58 PM

    Topics: Tax Planning & Strategies, Small Business, Accounting & Auditing, Accounting and Tax Resource, COVID-19

    Ohio Governor Mike DeWine signed House Bill 197 on March 27, 2020 as the state’s response to the current COVID-19 pandemic.  The provisions of the bill include a number of tax-related measures, including suspending the 20-day rule during the COVID-19 pandemic. Under the normal rules, effective January 1, 2016, local taxes are withheld based on an employee’s “principal place of work” (as defined in Ohio Revised Code Ann. Sec. 718) for the first 20 days an employee works in another Ohio municipality (“non-principal place of work municipality”). Withholding is required for the “non-principal place of work municipality” beginning on the 21st day. Exceptions to the new 20-day rule exist for certain construction and other long-term worksite locations. 

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    PPP Loan Forgiveness - Updated Guidance for Rehires

    Posted by Carlin Culbertson on May 4, 2020 4:24:06 PM

    Topics: Tax Planning & Strategies, Small Business, Accounting & Auditing, Accounting and Tax Resource, COVID-19, Featured

    Treasury and the SBA updated their FAQ on May 3, 2020 with Q&A item 40.  This indicates that if you make an attempt to rehire an employee and they refuse to come back to work, you will not be penalized in your forgiveness calculation for them.  You do need to follow certain documentation guidelines as described below.  This thankfully offers some clarity on this situation as it has been a common occurrence with some employees for a variety of reason. 

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    SBA and Treasury Will Review/Audit PPP Loans

    Posted by Carlin Culbertson on May 1, 2020 3:45:08 PM

    Topics: Tax Planning & Strategies, Small Business, Accounting & Auditing, Accounting and Tax Resource, COVID-19

    The Treasury Secretary stated in an interview on Tuesday, April 28th, that Treasury would audit Paycheck Protection Program Loans over $2 million.  Then on Wednesday, April 29th, Treasury and the SBA updated their FAQ with Q&A number 39 stating that the SBA would review loans over $2 million (and any others they deem necessary, so being under $2 million isn’t a guarantee they won’t look at it) when the applications for forgiveness are submitted. 

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    IRS Rules on Tax Treatment of Expenses Resulting in PPP Loan Forgiveness

    Posted by Keith Hughes on May 1, 2020 1:19:29 PM

    Topics: Tax Planning & Strategies, Small Business, Accounting & Auditing, Accounting and Tax Resource, COVID-19

    The IRS has issued guidance regarding the tax treatment of expenses paid with funds received via the Paycheck Protection Program (PPP).  IRS Notice 2020-32 was issued on April 30, 2020 and specifically states that no tax deduction will be allowed for expenses that result in the forgiveness of a PPP loan. 

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    Congress Expands Small Business COVID-19 Relief

    Posted by Jonathan Ciccotelli on Apr 24, 2020 5:09:52 PM

    Topics: Tax Planning & Strategies, Small Business, Accounting & Auditing, Accounting and Tax Resource, COVID-19

    Congress and the Trump administration have struck a deal on another piece of legislation, the latest in a series of federal measures intended to provide relief in response to the novel coronavirus (COVID-19) pandemic. The $484 billion legislation, which is being referred to as the Interim Stimulus Plan, amends the Coronavirus Aid, Relief and Economic Security (CARES) Act enacted in late March. Among other things, it provides additional funding to two loan programs designed to help small businesses slammed by the economic shutdown.

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    The Corleones and Paycheck Protection Program

    Posted by Lloyd Bell on Apr 23, 2020 5:16:04 PM

    Topics: Small Business, Accounting & Auditing, Corporate Finance, COVID-19

    In The Godfather: Part III, Michael Corleone, the fictional head of the Corleone crime family, attempts to become a legitimate businessman and put all of his past misdeeds behind him. After being double-crossed, he famously said “Just when I thought I was out, they pull me back in!”

    Classic. And apropos to the government’s Paycheck Protection Program.

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    Accounting Considerations related to the Paycheck Protection Program

    Posted by Kelli Bernstein on Apr 22, 2020 11:23:55 AM

    Topics: Accounting & Auditing, COVID-19

    As you know, the CARES Act includes a Paycheck Protection Program (PPP). Proceeds from loans under the PPP are used for various expenses including eligible payroll costs,  interest costs, rent and utility costs incurred during the period between February 15, 2020 and June 30, 2020.

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