COVID-19 And Your Small Business

Business Survival Amid Covid-19

By Cynthia Alloway, Partner/Managing Member – Accountability Team 

The past month has brought about a roller coaster of emotions as the Coronavirus pandemic threaten the health of those we care about and love. The emotions range from worry about health, concerns about job security, financial fallout, supply chain for much needed goods and services, and total interruption of our normal routines. Amid this crisis there are also heartwarming stories of family, friends, and neighbors reconnecting in ways that had nearly disappeared from our modern lives. Many parents are recognizing the powerful impact that educators and child care workers have in their children's lives. Many families are coming up with new and creative ways to interact and working hard not to drive each other crazy.

As a service provider to the small business community I have been encouraged as my clients have reached out to me to learn how they can help their employees while maintaining solvency so that the employees actually have a place of business to return to once the crisis comes to an end.

For those of you located in the State of Florida there is a small business loan program called the Florida Bridge Loan which is briefly covered below with links to the website for this assistance.

As many of you know, the government passed a huge stimulus bills late last evening. Details are still coming out and this is a very fast moving and changing situation. This is an evolving situation called the Paycheck Protection Program. Brief details (as known at the time of this writing) are covered below with links to the website for this assistance.

I want to be clear that I am not advocating that my clients apply for loans. As always, I encourage my clients to establish and utilize emergency funds as much as possible to avoid taking on debt. However, with this extreme situation I am receiving dozens of calls, texts, and emails requesting information about these relief programs. If you are seeking relief through one of these programs, please use the links provided in the articles below. Be careful for any "offers" that don't go through the established processes for filing for these loans to avoid being the victim of a scam or fraud.

I also want to encourage business owners to "think outside the box" as we work our way through this crisis. There are many creative ideas that are being freely shared between businesses. Look for forums where you can tap into some of those ideas and maybe share some of your own. Also, if your business is currently shut down, take this opportunity to work "on" instead of "in" the business. Come up with a long term plan for rebuilding or boosting sales in the 2nd, 3rd, and 4th quarters; write some blogs or newsletters that can be sent out over the next several months. Volunteer some time to help out those in crisis in your community. You have built a business on specific skills – how can you use that right now to show good will to your friends, neighbors, and customers?

It is my hope and expectation that business owners who have run successful businesses for years will continue to enjoy success as you employ wisdom, caring, and support to your colleagues and staff during this challenge.

FLORIDA BRIDGE LOAN

  • Must be a For-Profit Business established prior to March 9,2020 with 2-100 employees (does not include subcontractors)
  • Applicant must demonstrate that the business has suffered a significant economic injury and is unable to meet its obligations to pay ordinary and necessary operating expenses
  • Loan proceeds must be used only for the purpose of maintaining or restarting business operations; borrower must certify and may be required to prove same.
  • Loan must be approved: Approval and loan amount is not automatic. Loan is underwritten through Florida First Capital Finance Corporation.
  • The borrower must personally guarantee the loan. I.e. if your business does not pay back the loan, you are personally responsible for paying it back.
  • Loan is interest free for one year. After that period, any remaining balance must be paid back at 12% interest.
  • Website for more information is: https://floridadisaster.biz

PAYCHECK PROTECTION PROGRAM

  • Federal Program intended to help small businesses (fewer than 500 employees) to cover payroll costs between February 15-June 30.
  • Self Employed and Sole Proprietors may qualify under certain circumstances.
  • Loans may be forgiven if the businesses uses the loan for payroll, interest payments on mortgages, rent, and utilities.
  • Loan forgiveness will be reduced proportionately by any reduction in employees retained compared to the prior year and a 25% or greater reduction in employee compensation.
  • Money cannot be used for stock buybacks or executive bonuses.
  • Repayments can be deferred for 6 months to 1 year.
  • Every loan document will be public. Your customers and peers will be able to see what you borrowed and how you utilized that loan.
  • Loans will carry an interest rate of 4%. If a loan is eligible to be forgiven, the principle of the loan will be forgiven but the borrower will be required to pay back the interest on the loan.
  • Visit SBA.gov/disaster for more information.

Consequences of Failing to File or Pay Your Taxes

The IRS wields great power and the general public finds its rules convoluted, confusing and, sometimes, just plain weird. U.S. citizens and corporations are required to follow these rules. The knowledge, expertise and experience of a CPA are of great value and comfort when dealing with the IRS.

Individuals must file their taxes each year by the 15th of April* and Corporate taxes must be filed by March 15th* if the corporation is using the calendar year. Those using a fiscal year will need to adjust that, and can check with the CPA to be sure they have the correct filing date.

If a person or corporation anticipates needing to pay, but doesn't have the funds to do so, there might be a temptation to put the whole thing off and just do nothing. This is not in your best interest. Let your CPA help you. At the very least, go ahead and file your taxes. You can work out a payment schedule with the IRS to minimize the impact of any fines and interest. Your CPA can interact directly with the IRS on your behalf, where not all accountants have the ability or authority to do so.

What happens if you can't pay?
So, just what happens if you can't pay your taxes? To start, there are both penalties and interest. This is being written in 2018. Tax laws, including penalty amounts, can change. The  failure to pay penalty is 0.5% of your balance each month, up to a quarter of the original amount due. It is in your best interest to file on time and pay as much as you can. Trust your CPA to help you determine the best course of action, and to set up an installment plan if needed. It bears repeating, don't skip filing. The fees are multiplied if you fail to file. Lean on the expertise of your CPA when you have conflict with the IRS. They are here to help.

No matter how simple an IRS communication seems, always let your CPA address it for you. Be sure to have them handle it promptly so that no deadlines are missed that might add to the penalty amount.

Once the IRS becomes aware of your late taxes, their system, called the Automated Collection System or ACS, will begin sending you notices. These, like other IRS communications, should be given to your CPA so they can respond appropriately. If they send additional letters, the language will be more forceful each time. Just let your CPA handle these. Yes, you have a responsibility, but your CPA can ease the process and remove the panic from the situation.

If you have not worked something out with the IRS, additional consequences may occur, but with the help of your CPA, these are much less likely. Some of those consequences would be liens, levies and wage garnishment, frozen bank accounts and asset seizure.

Tax evasion and fraud, or a complete refusal to pay, will result in criminal prosecution. The IRS prefers to work with delinquent taxpayers, rather than have them put in jail. Intent to defraud can be difficult to prove, so the IRS will look for patterns of abuse before beginning a criminal investigation.

As was written elsewhere on this site, if you follow these rules, you have little to fear from the IRS:

  1. Be Honest
  2. Keep Good Records
  3. Let your CPA handle it!

Tanya Higginbotham, with over thirty years of accounting experience and 15 years as a Certified Public Accountant, is ready to help you through whatever situation you find yourself in with the IRS. 

*special rules for weekends and holidays

Business Startup Checklist

If you are planning on starting a business in Hillsborough County Florida, there are some things you will want to consider and prepare for early in the process. With some guidance from the official Hillsborough County government website, here are some of those things.
  1. You may choose to attend one of the county's workshops offered at various facilities in the county during the year, including at the ECC in Ybor. The workshops are designed to provide information and resources to ease the business startup process.
  2. Prepare a summary of your new business plan.
    Let this be a general overview of the idea or ideas you have for your business. This should include where your business will be located, how many employees you expect to have, and who is your target market. This is a good time to consider your total startup costs, monthly bills and projected cash flow
  3. Determine the business structure you'll use.
    Hiring a professional at this point may be beneficial. A qualified CPA will help you evaluate your situation and determine the structure that suits your situation best. Being a sole proprietor is simple, but does nothing to protect the owner. An LLC has advantages and can be taxed as a pass-through, or as an S Corp. A Corporation requires a bit more planning and reporting, but for some business, the administrative load is balanced by the benefits of the structure. Your CPA will advise you on the various state agencies with whom you must register for the structure you choose.
  4. DBA / Fictitious Name
    If you intend to do business by any name other than your legal name (ie: John Doe) or the name of your LLC or corporation, you'll need to register a "DBA" or "Fictitious Name". Again, your CPA will advise you on this and direct you to the Florida Division of Corporations as needed.
  5. Contractor and Professional Licenses
    Many types of business require licenses by the county and or the state. Those include beauty (hair and nail) salons, Accountants / CPAs, Construction, Food Service, Hotels and more. Some businesses will also need to register with the Florida Department of Agriculture and Consumer Services.
  6. Permitting & Zoning
    Whether you're planning on opening a store front, or working from home, you'll need to research the state, county and city regulations to ensure you are in compliance, obtaining any necessary permits and resolving any zoning conflicts that might arise.
  7. Business Tax Receipt
    Any business operating in Hillsborough County is required to obtain a business tax receipt. If your business is inside any of: Tampa, Plant City or Temple Terrace, you may need a city business tax receipt. Contact your city government for more details.
  8. Federal, State and County Taxes
    If you're going step by step through this guide, your CPA has probably already advised you on some of the tax implications of some of the choices you have to make when starting your business. There's a good chance your company will need, or at least choose, to have a Federal Employment ID, (FEIN) Getting one is simple at the IRS website.
  9. If you sell anything physical or a service in this list:
    1. Nonresidential Cleaning Services
    2. Commercial Pest Control Services
    3. Commercial/Residential Burglary and Security Services
    4. Detective Services
    You'll need to collect Florida State sales tax. Let's add to that list "A service that includes any physical product". A search for the "drop of oil" rule will enlighten you on this topic.
  10. These businesses will have to collect the Florida Communication Services Tax
    1. Telephone Services
    2. Paging Services
    3. Faxing/Facsimile Services
    4. Video Conferencing Services
    5. Cable Services
    6. Direct-to-home Satellite Services 
    Your CPA can help you confirm if your business fits into any of these categories.
There are many factors to consider when starting a business and as you establish and grow within the community. Trust a CPA who knows the area and knows what's best for your business. Trust Accountability Team LLC.

Tampa Tax Prep – CPA

Tampa Tax Preparation by a CPA

Are you looking for information in Tampa on tax preparation by a CPA? There's information businesses should understand when seeking tax preparation services in Tampa.

Types of Tax Preparers In Tampa

There are different types of tax preparers to suit a myriad of individual and business tax needs. We want to equip you with the knowledge of the different types of tax preparers. This will help you choose the proper Tampa tax preparation by a CPA or otherwise. 

CPA Certified Public Accountant:

A CPA has invested the most time and money into their expert position. Certified public accountants are state licensed. They cover a broad range of account practices and services that have nothing to do with taxes. This could include full service monthly account management. They can represent you in issues like auditing and consult on tax laws that affect your business. Next to a business banker or lawyer relationship, a CPA is a great asset to your business network. CPA's are the smart choice for companies. They're qualified to prepare audited statements.

IRS Enrolled Agent:

An IRS enrolled agent, also called an EA, focuses on tax preparation. EA's are licensed by the federal government. The IRS offers the title of Enrolled Agent either to former employees or those that have passed an IRS exam that covers tax preparation. There is no educational component to this title beyond passing the exam.

Unlicensed Accountant:

Unlicensed accountants aren't required to have a degree in accounting to provide service. They may be individuals who excel at monthly bookkeeping but aren't required to be as "in the know" about current tax laws. While they may hold a certificate in accounting, it is not mandated. They're capable of tax preparation services yet, they're unable to represent you to the IRS. They prepare the tax forms and you file them yourself in most cases.

Advantages of Tampa Tax Preparation By a CPA

Tampa tax preparation by a CPA includes more than preparing tax forms. A CPA in Tampa can tell you how life changing events affect your taxes. Examples might be a birth, death, or a divorce. These things affect your tax status and a CPA can tell you what effect each change has.

Auditing happens everyday. A business can add "peace of mind" by having a CPA in place before these events ever happen. An experienced CPA is prepared to help you through it.

Tampa tax preparation by a CPA can give you added tax savings. Local and state taxes change and can affect your business and investments. A CPA helps you capitalize on these changes for added tax savings.

Certified public accountants are an important piece to running a great business. CPA's can offer advice on a variety of services outside of taxes. Because of this, they are a versatile asset to any business. Many business startups consult with CPA's prior to setting up their business structure. This helps them determine the best financial practices to use within their business.

Tampa Tax Planning

Tampa Tax Planning

There are many reasons to live or do business in the Tampa Bay area. The weather is amazing, there are great sports teams and there is no state income tax. Florida is known for its beaches and tourism. The Tampa region is a diverse and active community.

Business Owners and Individuals in the Tampa area looking to maximize their tax savings and minimize their tax liability will want to start their tax planning early in the year. Careful consideration of all available deductions, credits and tax incentives will be crucial to succeeding in this effort.

Tax Planner Tampa

Because the IRS and tax laws and regulations constantly evolve, and never seem to simplify, a qualified, experienced CPA will be an invaluable asset in this process. Tanya Higginbotham, of Accountability Team LLC, has been a CPA for nearly 20 years and has helped individuals as well as small to medium businesses not just survive tax season, but to thrive and profit.

Accountability Team LLC, located in one of Tampa's suburbs, Valrico, is ready to help you:

Consult with you during the planning phase of your business
Prepare your business and personal taxes.
Compile your monthly reoprts
Help you implement Quickbooks Account Software
Train you and your employees on the proper use of Quickbooks
Remediation of past Quickbooks issues or errors in use or implementation.

Tanya's experience with a wide range of business types and their unique individual situations has prepared her to help your business before, during and after tax season.

Affordable Care Act – Obama Care

Obama Care

The Affordable Care Act, known as ACA or "Obama Care" has left some people confused. Each year since it passed, we have clients who are "surprised" when they receive their tax returns and find that they have incurred a penalty for not having insurance or not having insurance that complies with the ACA. Also, folks who are on a subsidized Obama Care health plan sometimes have to pay back some or all of their premiums because their family income increased from bonuses, raises, new jobs or other increases. When this happens, the person may have to repay some or all of the subsidy they received for their ACA Coverage.

ACA Quick Tips for individuals:

Don't miss open enrollment.
Unless some changes are implemented, open enrollment will begin on 1 November and end 31 January each year. Native Americans and Alaska Natives can enroll anytime.  Applicants who are eligible for Medicaid can also enroll throughout the year. There are "Qualifying Events" that may allow you to enroll under a "Special enrollment period". These include birth and adoption events, a permanent move (in some cases), loss of other coverage, and marriage. Proof will be required when claiming a Qualifying Event.

Get Coverage From Your Employer
If your employer offers health insurance, you'll most likely want to take it. The marketplace is only for those whose employers don't offer it, or don't offer enough coverage.

Keep good records
When tax time comes, you'll need to prove you and all your dependents were covered, and what months were included in that coverage. You may otherwise be fined for each person for each month without proven coverage. At the end of the year, you should received a Form 1095A, 1095B, or 1095C depending upon what type of coverage you had for the previous year (Ermployer, Individual, or MarketPlace). Review carefully and keep that form for your records; you may also be requested to supply your CPA with a copy of that form when filing your tax return.

Check for possible refunds
ACA subsidies are called the Advance Premium Tax Credit. If Advance Premium Tax Credits are lower than the amount of premium tax credit calculated on your tax return, they will reduce your tax bill or increase your refund. This is likely to happen if your household income goes down during the year and you do not notify the Marketplace to adjust your subsidy.

ACA Quick Tips for small businesses

The ACA Employer Mandate May Not Apply to Small Businesses
If your company has less than 50 full time employees, you will not be required to provide health coverage. If your number of full time employees fluctuates, and that number stays normally around 45-50, you'll need to keep extra careful records and keep track. Also be aware of what the ACA calls "full time equivalents" which uses a formula to count hours worked by non full time employees as if the were additional employees. You can read more at healthcare.gov, but your the best advice is to let a professional CPA help you with this.

Small Business Health Care Tax Credit
Businesses with fewer than 25 full time employees may qualify for the Small Business Health Care Tax Credit if their employees earn less than $50,000 per year and the business covers at least 50% of their insurance premium purchased through the SHOP Marketplace.
 

The future of the ACA
The future of the ACA is in question, so close attention to changing legislation is imperative. You're busy running your own business or taking care of your own family. Let Tanya Higginbotham, a Certified Public Accountant who's well equipped to follow and understand these changes, help you keep track of it all.

Choosing a Business Structure

BRANDON FLORIDA CPA

When starting a business, one of the early and important decision you have to make is the type of entity your business will be. This decision will effect how your business and your salary are taxed, the amount of paperwork you'll have to keep up with and your personal exposure to liability.

In the eyes of the IRS, there are two types of businesses, those that are taxed directly, and those whose tax liability passes through to the owner(s).

Those taxed directly are C-Corps.

Those that are considered "pass through" or "flow through" entities include Sole Proprietorships, various Partnerships, LLCs & S-Corps.

Deciding on an entity type often begins with these tax considerations. The next consideration is often the limitation of liability. If your business becomes liable for a debt or judgement, are your personal assets at risk?

Let's take a look at each of the entity types mentioned above:

The simplest form of business is a sole proprietorship. Any income generated by a sole proprietorship is directly taxable to the owner. Any debt or liability incurred is incurred by the owner him or herself. A sole proprietor generally must make quarterly estimated tax payments to keep up with self-employment tax.

A step up from a sole proprietorship is a partnership. When two or more people contribute labor, skill, property or finances and expect to share in the profits and losses of the business, this is a partnership. Partnerships come in two varieties, general and limited. A limited partnership will limit the liability for only some partners. Both are pass-through entities. The self employment tax on these partnerships varies. Your CPA can help you with the details.

BUSINESS ACCOUNTANT IN VALRICO, FL

Next is the LLC or Limited Liability Company which is a state by state structure, so check the details in your state. An owner of an LLC is called a member. Members can be people, corporations or other LLCs. An alternative to a sole proprietorship is known as a Single Member LLC.

An LLC has a choice of being disregarded by the IRS, and therefore treated like a partnership or sole proprietorship, or to be treated as an S-Corp.

An S-Corp is structured like a C-Corp whose owner(s) have chosen to allow the corporate income and losses to pass through to the shareholders. The corporation itself need not file it's own taxes, as it's shareholders are responsible for that. There may be some exception to these rules, so check with your CPA and your state's regulations.

The more formal business type is a C-Corp. When forming a C-Corp, shareholders purchase stock in the corporation with money, property or both. The corporation earns income and pays it's own taxes and distributes profits to it's shareholders. The corporation is a separate taxable entity. Because the corporation is taxed on the income and shareholders are taxed on distributions, there is a double tax. The shareholders of a corporation are generally not liable for the debts or liabilities of the corporation, with possible exceptions under some state laws.

It's impossible to say that one of these entity types is better than the others. Different situations will favor one entity over another. Talk to your CPA about your short and long term goals and let her guide you into the best fit for your business.

TANYA HIGGINBOTHAM CERTIFIED PUBLIC ACCOUNTANT

Don’t Wait until Tax Season

An individual may choose a tax preparation firm with little notice or diligence, and may wait until near the filing deadline to choose an accounting or tax professional. If that person has a relatively simple situation, this may work out.

Small Business Taxes

If that individual is a small business owner, or if the entity involved is a corporation, then this is a sub-optimal strategy.

An accountant does more than prepare and file taxes. A well trained, licensed, CPA has the skills and knowledge to provide insight and understanding of complex financial situations and to help you make the best decisions from the beginning of the year and throughout. He or she is available for each opportunity you have, a professional with an outside perspective to ensure each financial decision is made with due diligence and consideration of all the complexities surrounding it.

Consulting a CPA during the initialization phase of your business can help you ensure you've chosen the best business structure for you, any partners you might have, and the long term profitability of you company.

A CPA can help you compile your monthly reports so you can get a better understanding of your cash-flow, what's coming in, and where it's going.

Quickbook Accounting Software

Accountability Team LLC can help you implement Quickbooks, train you and your employees in the proper use of Quickbooks, and remediate any issues that might be present in an existing Quickbooks setup.

Accountability Team LLC focuses on building a relationship with their clients, both as individual and business owners, helping them learn about and understand their tax burden and the overall health and direction of their finances.

Contact Accountability Team LLC now to get started.

Tampa Corporate Tax

Tampa consistently ranks well as one of the most cost effective cities to operate a business. Tampa and the surrounding area have a strong population of skilled workers and a competitive labor cost. Add to this the relatively moderate cost of office and industrial leasing and purchase and reasonable sales tax rates and Tampa is one of the least costly places to run a business in the United States.

Tampa's excellent international airport, sea port, rail road connections and the interstate highways (I-4, I-75/275) make transportation and shipping very convenient.

Tampa is also a strong candidate for startup or relocation because of the warm climate and access to cultural and entertainment resources such as the beach, professional sports teams and local and not too distant amusement parks.

If you're already doing business in Tampa, you already know all this. If you're considering it, a quick visit just might win you over.

Tampa area businesses looking for a CPA or corporate tax professional can count on Tanya Higginbotham of Accountability Team LLC whose experience in and around Tampa is sure to be a great benefit to your company.

Monthly Write-Ups

Small business owners may only think about accounting when time and circumstances force them into it, like tax season or when certain bills come due.

Effective accounting practices require constant, year-round attention. A good accounting system can spot problems early on, or even prevent them from happening in the first place.

One aspect of accounting best practice is known as a monthly write up. These write ups include account reconciliation, ensuring each transaction is recorded accurately. They also include your Profit and Loss statement (P&L or Income statement), as well as your balance sheet so you know your current position, and lastly, a review of the general ledger, checking for proper balance.

With this foundation in place, the information can be used to plan for your future. These reports are key when reaching out to a bank for financing a new growth project. The banks will use this data along with other factors to determine your ability to repay.

Hire a trusted CPA to prepare your monthly and quarterly reports. The CPA's extensive training and experience will help ensure the reports are prepared with precision and professionalism. Engaging with the CPA month after month also allows them to grow familiar with your business and gives them insight into trends that might influence their advice for tax season and growth planning. The experienced professionals at Accountability Team would be happy to discuss your monthly write up needs with you.