$150B of The PPP Loan money is still available. I don’t know how many telephone calls and emails that I have received in the past couple of weeks for businesses that have been unable to get a PPP Forgivable Loan, but the number is significant.
The majority of these businesses have not been able to get this done because, for one reason or another, they are simply non-compliant.
One of the most difficult things to understand about the accounting industry is that there are a significant number of entrepreneurs who just don’t want to do handle their finances correctly. Many are just incredibly late with their income taxes. In general, one-third of small businesses file within the deadline, another third file by the extension due date, and the rest are just late.
No matter what we do, no matter how many times we call or email these entrepreneurs for their records, we just can’t get them to file their returns timely.
Another problem is payroll taxes. Yes, they are incredibly expensive. But it is wrong to treat individuals who do not own an entity as an independent contractor. This is a violation at The Federal and The State Level. In many instances, this isn’t entirely fair. I’m certainly not going to get into the reasonableness of our taxation system. It is how it is, and the proper treatment of an employee will only cost you another ten or twelve percent in payroll taxes.
The proper handling of distributions in an S-Corp Environment, can also be problematic. Many entrepreneurs will take entirely too much in distributions or no payroll at all. The rule is that the owner of a profitable S-Corp is required to take a reasonable salary. If you do not and the entity is audited, the taxation body could say that your entire distribution was your salary. At that point, you would be required to pay the additional payroll taxes, along with interest and penalty on that year and probably another two years as well.
What’s my point? Compliance can keep you in business.
Those of you who are compliant have been able to access the PPP Loan money which is so necessary to keep your enterprises going. Those of you who are non-compliant have not. By definition, you cannot expect The Federal Government to benefit a business owner who does not follow its laws. You can’t have your cake and eat it too.
What’s the answer? Become compliant.
There is still a boatload of money sitting out there waiting for entrepreneurs with the correct paperwork to claim it. What’s holding you back? The business you save by doing it the right way, might be your own. Contact us today.
Let me leave you with this one thought…
Congress seems to be at a crossroads when it comes to what’s next. The $3 Trillion Corona Virus Relief Bill was dead on arrival after it was passed in The House last week. Most states have already re-opened, while Illinois is dragging it’s feet and Chicago is even further behind. I’m not going to get into the right or the wrong of any of this. I’m certainly not going to get into the politics.
My point is that what you see, is probably all that you are going to be able to get.
The Federal Government is probably not going to approve additional stimulus packages. How can they, when most of the other states are open? They can’t approve money just for holdouts like Illinois and New York. As Illinois begins it’s re-opening process, you need to think long term about what it will take to keep you going.
You cannot afford to continue business as usual.
If you are still partially shut down, then you may need to adjust your prices to handle your existing overhead. This isn’t a comfortable thing to talk about. No one likes increasing their prices, but this may become a necessity. Rents, mortgages, and property taxes haven’t gone on holiday.
Your team will probably look a lot different. You may have extreme difficulties getting your former employees to return, given what they are being paid on unemployment. This may cause very different problems in the quality and delivery of your product or service. You may need to reinvent your business even more than ever before.
If you are in the travel or hospitality business, you may need to shut down complete business units in order to survive. Airlines have received permission to shut down many of their routes in secondary markets. Hotels are shutting down entire floors and sections of rooms. If demand remains flat, even more drastic measures may become necessary.
We operate in a state which has put us at an extreme disadvantage. While others are getting their economies rolling again, we continue to see additional roadblocks. Given the fact that we will probably not see any more federal funding, this puts us into an even bigger trick bag.
Now is the time for extreme improvisation. You need to do whatever is necessary to stay in business. You can get through this. Be creative. Improvise, overcome, adapt and realize that we are here to help.
Accounting Solutions Ltd. stands ready to complete its mission to protect you, your family, and your business. If there is anything that you need, whether you are a current client or not, we stand ready to help. Please contact us today. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.AccountingSolutionsLtd.com
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