Major Plan Comparisons

My Communications Staff asked me to put together the following to help them answer questions. We are probably the only Accounting Firm in Chicago that has an actual Communications Staff. I’ve always understood that communication in our business is as, or at times, more important than doing the very best accounting and tax work. Most clients don’t begin to know what they are looking at in the first place. What good is it to do the best possible work, if no one knows how good it really is?
Like most of my readers, my Communications Staff didn’t go to accounting school and aren’t exceptional at remembering all of the gory minuscule details. So I put together the following, and provide it to you thinking that it might help you in your decision making. This is by no means a comprehensive comparison. In the past couple of weeks, I have written thousands of words on these individual subjects. It is intended to be more of a thumbnail type of tool, in helping you to make easier, better informed decisions.
Payroll Protection Plan Loan
– A loan administered through the SBA’s approved 7(a) Lenders
– Covers 8 weeks of payroll and health benefits.
– An additional 25% can be added for operating expenses
– Can be forgiven after the eight weeks if it is spent on payroll & operating expenses
– Program is open now until June 30, 2020
– Interest rate is 0.50%
– Payments do not begin for 6 months
– By then it would probably be forgiven if spent on the correct items
– The Application process is difficult and there are no guarantees on approval
– You do not need to prove a particular amount that the business has gone down. You do need a written statement showing how your business has been negatively affected by the Covid-19 Outbreak.
Employee Retention Credit
– A refundable tax credit equal to 50% of the first $10,000 in qualified wages per employee
– Applies to payroll from March 12, 2020 – January 1, 2021
– Eligible employers are either fully or partially shut down, or they see a greater than 50% reduction in sales from one 2020 quarter back to the same quarter in 2019
– A Refundable Credit is taken through the normal process of completing Form 941
– Qualified wages include health plan benefits applied to the wages of the employee
Unemployment Benefits
– Weekly benefits are based upon your two highest paying quarters multiplied by 47%, then divided by 26
– Maximum weekly benefit is $471
– Additional benefits are available if you have a spouse or children
– The CARES Act provides an additional $600 in weekly benefits as well as an additional 13 weeks of benefits in some cases.
– This additional benefit is expected to begin, if all goes well, next week
– You can claim benefits on your own company, but your aren’t supposed to, as long as your company is still open. This does not mean that you will be denied benefits.
I hope that this is helpful.
One final thought…
Many of you are teetering on the brink of insanity and disaster. The fact that the PPP Loans are still being processed, doesn’t help. The fact that many of you are either staying home, or sitting in empty businesses right now, isn’t a great feeling. The fact that many of you are terribly worried about an uncertain future, doesn’t put a lot of pep in your step.
But you need to get hold of yourself and realize that this too shall pass.
The fact that the Jasmine in my greenhouse and the Daffodils in my backyard are in full bloom tells me that summer is coming. We even had a 70 degree day yesterday.
The winter of our discontent will blossom into a glorious and fruitful summer.
You’re going to get through this. You need to screw on a happy face, and do the job of an Entrepreneur. You need to be that positive and hopeful person, now more than ever. Use the weekend for your benefit. Relax, rest, and recharge your batteries. You’re going to need it.
Only whatever God you pray to, has any idea what we are going to need to handle next week.
I’m not going to be able to write tomorrow, because I need to get out all of your extensions. It was a lot easier when we were a small, neighborhood practice. Now that we are a mid-sized practice, handling the Accounting, Tax Work, Tax Planning, and Tax Representation needs of 240 Businesses, Partnerships, Estates, and Trusts, this job has become a bit more complex.
But know that we are here to help.
Accounting Solutions Ltd. stands ready to complete its mission and purpose of protecting you, your family, and your business. If there is anything at all that you need, or if you just need someone to talk, we are here. I’m with you, and remain,
Sincerely yours,
Chris Amundson
Accounting Solutions Ltd.
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