Category Archives: Education

Education, IRS, Tips

Paycheck Protection Program Loans: What We Know So Far

Leave a comment

IMPORTANT: This blog post is now out-of-date due to new guidance released on April 6th — see new post here.

The new CARES Act has introduced the “Paycheck Protection Program” (PPP) — $350 billion in loans to be administered by the SBA. The loans may be used to cover a borrower’s payroll and payroll taxes, mortgage interest, rent and utilities for eight weeks from the date of the loan.

But this is the key: if an eligible borrower uses the loan for qualifying expenses “while maintaining its workforce”… the loan may be forgiven. This makes the PPP way more valuable than most other federal, state and city aid (with the exception of flat-out grants, and possibly some credits).

The loans aren’t available yet — hopefully we’ll begin seeing these within the next two weeks. This legislation is hot off the press, and lenders do not yet have guidelines or checklists in place to know how to process applicants. I know this sounds awful to ask of you at a time like this, but: please be patient. Use the time to get your books and documentation in order, select and reach out to your favorite lender, and get everything ready to apply the moment they open the gates.

Qualification and Terms

To qualify for the loan program, a borrower:
(1) must have been in operation on February 15, 2020;
(2) have no more than 500 employees; and,
(3) must certify that the uncertainty of current economic conditions makes necessary the loan request to support its ongoing operations.

  • The amount of a loan cannot exceed 250% of the borrower’s average total monthly “payroll costs” during the one-year period leading up to loan origination. “Payroll costs” include salaries, wages, commissions, tips, paid time off, health insurance, retirement benefits, and state and local taxes not to exceed $100,000 per employee.
  • Loans are subject to a maximum of $10 million.
  • Amounts not forgiven (explained below) will have a maximum maturity date of 10 years from the date the borrower applied for loan forgiveness.
  • Interest on the loans shall not exceed 4% until June 30, 2020, but may be subject to change afterwards. All loan payments (principal, interest and fees) are deferred for at least six months, and up to one year.
  • Loans are “non-recourse” (which means company owners are not responsible for payments if the company defaults), except to the extent the loan proceeds are used for a purpose other than borrower’s payroll, mortgage interest, rent and/or utilities expenses.
  • Borrowers/owners will not need to provide any collateral or personal guarantee during the “covered period” (February 15-June 30, 2020). (It’s unclear whether lenders will require collateral and/or a personal guarantee to spring into effect upon the loan continuing to remain outstanding — or not completely forgiven — after June 30, 2020.)

Loan Forgiveness

The total of all payroll costs, mortgage interest payments, rent and utility payments incurred and made by a small business PPP borrower during the eight weeks following the loan — capped at the total loan principal amount — is potentially eligible for forgiveness. Unlike other forms of forgiveness of indebtedness, the amount of forgiveness received by a borrower will not be taxed as income. So this is kind of a big deal.

However, the maximum forgiveness amount will be reduced if the company reduces its number of Full-Time Equivalent Employees (FTEs) and/or reduces wage or salary compensation in excess of 25%. The reduction of forgiveness is reduced in proportion to the decrease in the number of FTEs during the eight-week period following the loan origination date, and the borrower’s monthly average FTEs from either (1) February 15, 2019 – June 30, 2019 or (2) January 1, 2020 – February 15, 2020.

In addition, the maximum forgiveness amount will be reduced dollar-for-dollar for any wage or salary reduction of an employee (who is paid less than $100,000 year) in excess of 25% (measured against the wage and salary for that employee during the most recent full quarter prior to the loan origination date).

If the small business previously reduced its workforce or the salary/wages it pays its employees, they can still qualify for loan forgiveness if FTEs are re-hired and/or wages are restored by June 30, 2020.

After an application is submitted for loan forgiveness, the lender will have 60 days to make a determination as to whether the loan will be forgiven. Lenders will then work with the SBA to be reimbursed for the forgiven amount; this won’t be something the small business owner has to do.

Information on Lenders

The Paycheck Protection Program will be administered by the existing network of approved SBA lenders, but the SBA and Treasury Department have said they are adding qualified lenders to disburse and service loans made with the guarantee of the SBA. Supposedly it’s not that hard to qualify as a lender, so if you have a good business relationship with a bank or other lending organization, encourage them to apply to become a qualified lender ASAP.

Lenders can make borrower eligibility determinations without SBA approval, using only the program eligibility rules. A borrower does not need to show it is unable to obtain credit elsewhere (a customary SBA loan requirement). This is also kind of a big deal.

Loans under the program are fully guaranteed by the federal government, which is an increase to the existing guarantee percentages under the current SBA loan program. (Ditto on the big deal.)

The SBA and the Department of Treasury are in the process of developing the guidelines lenders will use to administer the Payroll Protection Program loans. They must issue regulations within 15 days of enactment of the CARES Act, which means it’s possible that lenders could begin taking loan applications in two weeks. Just to be clear here: this is light-speed for a newly-enacted government program.

Recommendations for Potential Borrowers

I’m hearing from clients and colleagues that none of the lenders have received guidance yet for these PPP loans. However, if you have your books in order and gather all the appropriate documentation that you expect they’ll ask for, then you’ll be ready when the time comes.

In addition to getting the books in order for 2018, 2019 and up-to-date through 3/31/20 (if they’re not already), I’m recommending to clients who may be interested in the program, as potential borrowers, start working on documentation to verify the following:
1) the number of full-time equivalent employees on payroll and pay rates for the applicable periods: including payroll tax filings, state income, payroll, and unemployment insurance filings (basically, payroll from a comparable period one year ago); and,
2) payments on mortgage obligations, lease obligations and utilities: including payment receipts, transcripts of accounts, or other documents (to prove you had a lease or mortgage and utilities in service before February 15th of this year).
3) You’ll need some type of certification by an “authorized individual” (presumably an owner, partner or officer) as to the business having been negatively impacted by COVID-19;
4) And of course you’ll need some relationship with an SBA-approved Sec 7a lender, which means start calling around now.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Education, Illinois, Tips

Furlough vs. Layoff: What’s the Difference?

Leave a comment

UPDATE 6/11/20 — an excellent, straightforward article by Accounting Web was released entitled, “How to Help Clients Conduct Layoffs and Furloughs While Mitigating Their Risk“. It explores the differences between various strategies: furloughs, paycuts, and layoffs — and how to navigate which to choose and what pitfalls each entails.

Today’s topic: when times are tough, and you need to put the pause on employment… which is the correct choice, furlough (temporary planned absence) or layoff (more likely permanent dismissal)?

The key, in my opinion, is that a temporary furlough is more likely to allow employees to keep their health insurance benefits. In most states, both furloughs and layoffs qualify workers for unemployment benefits (for sure in Illinois during the current lockdown).

Lots of good info in here — take a read: Furlough vs. Layoff: What’s the Difference? | Gusto.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Education, Illinois, Tips

Questions About Illinois Unemployment (IDES)

Leave a comment

I’m getting a lot of client questions about unemployment these days — understandably… one person referred to it as the “IDES of March” — and thought a short Q & A + random notes and tips might be helpful. Some of these are notes from clients and friends based on their own experiences and research.

None of this should be taken as legal advice. Please see the State of Illinois’ unemployment website or give them a call (I’m hearing wait-time is about 45 minutes, so get a book or magazine out) with specific questions.
For Employers: (800) 247-4984
For Employees: (800) 244-5631
I’ve also heard that some of the branch offices have shorter wait times, such as Arlington Heights (847-981-7400) and Skokie (847-745-3242).

Block Club Chicago has done a lot of excellent reporting since its inception, and the journalists have earned my deep respect. And they are providing all COVID-19 coverage free to the public (consider subscribing to support their work if you are able). This particular article does a nice job outlining how to obtain unemployment benefits, rent relief, and more.
https://blockclubchicago.org/2020/03/18/out-of-work-due-to-coronavirus-heres-how-to-get-unemployment-benefits-rent-relief-and-more/

IMPORTANT NOTE:
For some reason, IDES benefits cannot be applied for with a smart phone — YOU MUST APPLY USING A COMPUTER. I know, this is ridiculous. Don’t shoot the messenger. Here’s the information you’ll need to apply.

Q: What if I’m temporarily laid off because the place where I work is temporarily closed because of the COVID-19 virus?
A: An individual temporarily laid off in this situation could qualify for benefits as long as he or she is able and available for and actively seeking work. Under emergency rules IDES recently adopted, the individual would not have to register with the employment service [office of IDES]. He or she would be considered to be actively seeking work as long as the individual was prepared to return to his or her job as soon the employer reopened.

Q: What if I quit my job because I am generally concerned over the COVID-19 virus?
An individual who leaves work voluntarily without a good reason attributable to the employer is generally disqualified from receiving UI. The eligibility of an individual in this situation will depend on whether the facts of his or her case demonstrate the individual had a good reason for quitting and that the reason was attributable to the employer. An individual generally has a duty to make a reasonable effort to work with his or her employer to resolve whatever issues have caused the individual to consider quitting.

Q: How are unemployment benefits calculated?
A: Here’s the place where IDES shows how they calculate the amount: 
https://www2.illinois.gov/ides/IDES%20Forms%20and%20Publications/CLI105L.pdf  — see page 16 starting with “how your benefits are determined”.
Basically, they take the prior three 3-month periods (quarters) and average your wages during that time. So contrary to popular belief, it’s not based on the most recent week or pay-period. (In fact, the most recent quarter is not even included in calculations.) Then they pay 47% of that amount.

And for more information on how unemployment benefits vary so widely from state-to-state, check out this great article. The number of complicating factors involved makes apples-to-apples comparisons almost impossible.

Q: I heard that the federal government is paying an additional $600 per week as well. Do you have to apply separately to get the federal government amount?
A: To the best of my knowledge at this time, there is no separate Federal application form. The state is supposed to be handling that aspect, and be reimbursed for the Federal amount, as well as their “extra” expense to process everyone. Heads-up that the one week “waiting period” will not apply for the $600 weekly amount — just for the state benefit amount. Once the Federal portion kicks in, the $600 will continue for up to four months, with the state paying for normally 29 weeks, plus another 13 weeks per Congress’ bill.

Q: I use Gusto as my payroll service. What are my options for making sure my employees are eligible for unemployment until I’m able to get everyone back to work again?
A: You have two main options:
1) Dismiss all your furloughed employees in Gusto so they can apply for unemployment — Gusto will save all their data, and they will still be in the system the moment you are able to rehire. To rehire: Go to People –> Show dismissed people (right column) –> Select employee –> on the right, under actions, click “rehire employee”.
– If you dismiss an employee in Gusto, then you will no longer be charged the monthly fee to keep them in the payroll system.
– Keep in mind that when you dismiss an employee, you must then report to your benefits coordinator or health insurance company that the employee has been dismissed. This makes them eligible for COBRA for 18 months. COBRA allows them to remain on the group plan and reimburse the company for the cost (plus an admin fee).
However, many employees cannot afford to do this, given that they’ve just lost their jobs. (Desperately trying to refrain from dwelling how immensely stupid this is, and wishing we had a single-payer tax-supported universal healthcare system.)
Luckily, all the arrangements for COBRA payments happen outside both the payroll and health insurance systems. You can negotiate any arrangement you want with employees, as long as they are all treated fairly. So if the company is able to and wants to foot the bill for health insurance while the employees are furloughed, they can. If they want the employee to continue to pay only their employee percentage, and not the whole cost, they can. Or if they want to offer to fully or partially foot the bill, but defer the employee’s payment until the company reopens and they can return to work, that is also a choice you can make. Just be sure to track the liability, and document the agreement in writing.
2) The other option is to keep them on payroll at a zero or very reduced pay rate. Some employers are keeping the pay just exactly high enough for the employee to be able to have their portion of health insurance benefits withheld from their paycheck. However, it is not as easy to apply for unemployment, and they may only qualify for partial benefits. But they should be able to show the reduced or zero wages, explain that they are furloughed due to business slowdown from COVID-19 sequestering orders, and be treated accordingly as unemployed or partially-unemployed per IDES regulations.
– One benefit of this approach is that they do not use up any of their 18 months of COBRA, and it allows you to easily have them pick up a shift or an odd job here or there.
– This allows the employee to potentially qualify for up to 2 weeks of paid sick leave (or partially-paid leave to take care of a sick family member or a child that must be home-schooled due to school closings), and another 10 weeks of partially-paid family medical leave — to be reimbursed to the employer by the federal government in the form of refundable payroll credits.
– Gusto is also providing options for deferring or waiving monthly payroll processing charges for those who need it.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Education, IRS, Tips

“Tips” For Small Businesses Creating A GoFundMe for Former Staff

Leave a comment

I’m getting a lot of questions on this one from clients and figured it would be good info for many out there.

If you own a small business and have had to lay off or furlough staff during this difficult time, you may wish to offer those who would like to assist an opportunity to contribute to a so-called “virtual tip jar”.

The issue is that tips are taxable income that should be run through payroll… whereas most of what we’re talking about right now are rightly termed as “gifts” — which are non-taxable to the recipient. Only if the gift exceeds $15k to any one recipient does the gifter (not recipient) have to file a gift tax return. The IRS requires that to qualify as a gift, the property (usually cash in this case) must be given without expecting to receive something of at least equal value in return.

It is reasonable to argue that these gifts are not lost wages or wage replacement — nor are they income to the company and then payroll to the staff. These are people who have simply lost their jobs through no fault of their own or the business owner’s, and we’ve become friends with these folks through the years and want to help. These are the people who’ve poured us that soothing cup of herbal tea during rough times, or a shot of tequila during rougher ones. They’ve taught us to mold clay, or taught our children music. We’ve gotten to know and love them and we want to help. That’s a gift. So here are a few “tips” for making sure your tips don’t inadvertently become taxable income to your business or your staff.

1) Make sure these are in fact gifts. No fair disguising actual sales of product or services, or trades. Don’t mess this up for everyone else.

2) Use GoFundMe, rather than an existing business method of collecting payments — not Paypal, Square, Stripe or anything else. The reason is that these businesses are required by law to send a 1099-K to you and the IRS, because the government is correct to assume that in general, those funds should be considered income. Whereas, the money in this case isn’t “income” to the business, so we need to make that clear by using GoFundMe, which is set up for arms-length gifting.

3) Secondly, use your personal name and your personal bank account for this — do not run it through the business and do not use the business EIN/ Tax ID. Again, we’re trying to make it clear that this money is just a gift to the employees out of the goodness of everyone’s heart, and not a replacement of wages that would be taxable via payroll.

4) Which brings me to another important point: do not run this through payroll. Think about it: all that is happening is that a disinterested but kind third party (a plain old nice human such as myself) decides to gift money to your staff because I feel bad that they are out of work. So I give you some money, since you’re a trustworthy person who has everyone’s contact info and can fairly distribute it. And you, personally, then take the funds and hand them out. No business account, no payroll, just an altruistic gift that you are passing along as the middle man.

There are certainly situations out there and arguments to be made that in some circumstances, these funds would qualify as income to the business, and then the payments would need to be made to employees via payroll. This is not a comprehensive post designed to address all of those alternative contexts — and should not be relied on as tax advice. Please consult with your CPA or attorney for specific questions about your own business.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Education, IRS, Tips

FREE Webinar: Advising Small Businesses In A COVID-19 Economy by Hector Garcia

Leave a comment

Regular readers of this blog know that I’m a huge fan of Hector Garcia and the various webinar series he’s presented through the years. He has done so much to help QuickBooks ProAdvisors and their clients, that we are all truly indebted to him.

He maintains this helpful approach by offering a free webinar about how to assist small business clients during this difficult time. Here’s the webinar — and I’ve summarized his notes and posted them below.

 

Summary of Hector Garcia’s COVID-19 for Small Businesses Webinar —

What small businesses need in today’s environment:
• Cash Flow
• Morale
• Purpose
• Retooling

Cash Flow
• Generate more sales – sell online, sell other things, web-based versions of your services
• New channels and forms of income – offer delivery, pre-sell future products/services, offer white-glove “touchless” alternative
• Reduction of expenses – downsize ASAP, cut unnecessary monthly services, ask vendors for “special programs” or reduce services to bare minimum, share expenses/ call friends and colleagues to share plans and services
• Delay payment of expenses – use credit card for purchases, switch to vendors that accept credit cards, ask for payment terms or extend current ones
• Cash Injection (capital or loan) – SBA loans, State-sponsored disaster/ economic relief loans
• Float Payments

Morale
• Mental health (someone to talk to – setup mastermind groups with colleagues)
• Staying in business, staying relevant, sell “something”
• Keeping talented employees (choosing which ones to let go)
• Employees not feeling like they can lose their jobs
• Ability to know that downsized employees are going to be “ok”
• Offer-up excess capacity (staff, tools, infrastructure, knowledge)

Purpose
• Businesses should have a vision/mission statement – is there a way they can still fulfill that even if the business model substantially changes?
• If they change target market, could they still fulfill their purpose?
• If they change business models and purpose, could the new purpose be as fulfilling?
• Do you have a purpose-driven brand?
• Do you have a loyal customer base that you can contact online?

Retool
• Does the business have a valuable online presence or community? If not, time to build it.
• Does the business have a contingency plan for working from home? If not, time to start preparing one.
• Is this business “social distancing” proof? If not, time to build a plan.
• Does the business have ability to sell online? If not, time to create it.

5 Key Advisory Questions
• What opportunities to fix things about your business can you take advantage of during the interruption?
• What have you learned about your business during the interruption that you didn’t know before?
• If you could have done something before the interruption what would it have been?
• As your business returns to normal what opportunities are there for you to better serve your customers?
• What is the question, that if you had the answer, would allow you to more easily recover from the interruption?

Thinking outside the box —
• Digital Tip Jars
• Gift cards, Pre-paid services, packaged discounted future services
• Reduction of services, but maintaining the customer relationship
• Delivery
• Serving the essential industries (food distribution, healthcare)
• Distilleries making sanitizer
• Restaurants (Curbside pickup, free TP/sanitizer, selling frozen food, selling “kits”)
• Farmers (drive trough fresh market)
• Babysitting for healthcare workers working overtime – https://www.mncovidsitters.org
• Drive-through confessions – https://www.deseret.com/platform/amp/faith/2020/3/23/21189502/confessions-drive-upcatholic-sacrament-faith-religion-parishioners-grace-mercy-forgiveness-covid
• Online Classes – “Zoom” version of their business – https://www.facebook.com/GuzmanDojo/?hc_location=ufi

Loans
• Check your state’s Dept of Revenue website
• County & City resources
• Check Gusto’s COVID-19 Resources spreadsheet:
https://docs.google.com/spreadsheets/d/1SRBZE2_6Nftwd02M6Oxj8MoeuZ7y93spXIgIPhkkp2w/edit#gid=0
• SBA Disaster Loan
• SBA Express Bridge Loans

Tips for Loan preparation:
• Owner’s credit will be pulled, so get a copy of the credit report (Experian, Equifax, and Transunion all offer FREE versions).
If score is under 700, have statement ready to explain areas of issues in the credit
• Use the credit report to build debt (liabilities) portion of Personal Financial statement
• Identify debt that is listed both on the individual’s (owner) personal credit and also on business balance sheet (have that narrative ready)

Beyond loan application and submitting tax returns, proactively prepare:
• Personal Financial Statements for all owners (SBA form 413)
• Business Debt Schedule SBA form 2202
• Monthly sales figures: 3 years historic, plus current year with estimate/forecast – SBA form 1368
• Have all 4506-T Forms readily signed for personal and business tax returns
• Have copies of extensions filed for 2019 returns (if extension was filed)
• Have books completed up to last month prior to loan application
• Draft a Loan narrative of what the loan proceeds will be used for, how you will be able to stay in business and keep employees on staff
• Draft Financial projections that show the post-interruption numbers supporting a profitable business that can REPAY the loan

Loan forgiveness “Paycheck protection loan” – may be passed by Congress today
Keep tight records of:
• Payroll costs (burdened)
• Rents and mortgage interest
• Utility payments
• Essential costs to maintain business operational
Comparing 8-week period from loan proceeds vs. previous year

How can accountants with multiple clients help?
• Make inventory of all your clients’ excess capacity (laid off workers, kept workers (and their skillsets), information about hours they work or are available, list of tools/infrastructure with excess capacity, unique knowledge/knowhow how team members)
• Make a database public within your client base (use Google Sheets or Airtable)
• Help them do business with each other or barter

Companies/Industries growing and hiring – if you need a job NOW…
• US Census
https://2020census.gov/en/jobs.html
• Monster.com’s top 100 Companies Hiring:
https://www.monster.com/career-advice/article/companies-hiring-now
• Amazon is hiring 100,000 new associates:
https://blog.aboutamazon.com/operations/amazon-opening-100000-new- roles
• Telecommunication software companies (Slack and Zoom)
https://jobs.lever.co/zoom
https://slack.com/careers#openings
• Grocery Stores, Pharmacies, Walmart, etc.
• Logistics and delivery companies
• Restaurants that do delivery
• 50,000+ Work from home Jobs:
https://www.indeed.com/jobs?q=work+from+home&l=Miami%2C+FL
&from=homepage_relatedQuery
• 200,000+ transportation Jobs:
https://www.indeed.com/q-Transportation-jobs.html

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Education, Illinois, Tips

City of Chicago March 2020 Business Education Workshops

Leave a comment

Each month the City of Chicago offers twice-weekly (Wed & Fri) FREE business education workshops presented by experts in private practice as well as representatives from various city departments. There are quite a few good ones this month — see the list below — and they’re all offered at City Hall (right downtown and near public transit). To register for any of them, email BACPoutreach@cityofchicago.org or call 312.744.2086.

City Inspections – Ask Questions, Get Answers
Wed, March 4, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805

Presented by the City of Chicago

To operate a successful business in Chicago you need to know what it takes to maintain compliance. Officials from several City departments will provide insight on how to operate safely, stay compliant, help prepare for inspections and highlight the do’s and don’ts of operating a business.

Empieza Un Pequeno Negocio
Fri, March 6, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103

(WorkshopPresented in Spanish)
Presentado por el Northwest Side CDC(Northwest Side Community Development Corporation)

Venga aprender como abrir un negocio, los pasos quedebe de tener y no tomar. Habláramos sobre creando un plan de negocio, entiendosu mercado, y creando un plan de acción. También se hablara los pasos parasacar su licencia de negociante. 

Small Business Center on the Road Expo
Sat, March 7, 10:00 AM – 2:00 PM
Kennedy King College – Building U, 740 W. 63rd Street
The Small Business Center on the Road Expo brings business resources to the community for new and existing entrepreneurs looking to start or grow their business in the City of Chicago. This expo is free and open to the public. You can find more information or register expo at www.chismallbizexpo.com 

Employee (HR) Handbooks & Workplace Policies
Wed, March 11, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805

Presented by Charles Krugel, a Management-Side Labor, Employment and Human Resource Attorney
Open discussion concerning whether a business needs a handbook, written policies & procedures, and how to implement them.

Buying and Selling a Business: Find, Evaluate and Negotiate
Fri, March 13, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103

Presented by LemaKhorshid, Fuksa Khorshid, LLC            

Do you want to buy a business and don’t know where to start? In this step-by-step seminar learn how buying a business can be an alternative to starting up a new business. Also, learn how to effectively analyze new business opportunities and understand a business purchase contract so that you can quickly close the deal.

How to Open a Concession at O’Hare and Midway International Airports
Wed, March 18, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805

Presented by City of ChicagoDepartment of Aviation – Concessions Department

Are you interested in operating a restaurant or shop at O’Hare or Midway International Airport, but don’t know where to begin? Come and learn about the Request for Proposals (RFP) process and how to operate a business at the airport. This workshop will also provide an overview of the Airport Concessions Disadvantaged Business Enterprise (ACDBE) program.

How to Obtain a Mobile Business License
Fri, March 20, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103

Presented by City of Chicago Department of BusinessAffairs & Consumer Protection (BACP)

From Food Trucks to Peddlers to Mobile Merchants, not all businesses need a store front from which to operate and Chicago is proud to support many types of mobile businesses. Attend this workshop to learn how to obtain a Mobile Food or Retail License from the BACP, including operational conditions, required inspections and application processes. Licenses covered by this workshop will include Mobile Food Dispenser and Preparer (Food Trucks), Mobile Merchant, Mobile Prepared Food Vendor, Mobile Frozen Desserts Vendor, Produce Merchant, and Peddler.

What Kind of Funding is Right For You/Your Business
Wed, March 25, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805

Presented by the U.S. Small Business Administration

If you need access to capital to achieve your business goals, the SBA offers a variety of funding programs for all kinds of small business ventures. Learn what kind of funding is right for you!

What You Need to Know About Your Business & Taxes
Fri, March 27, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805


Presented by the Internal Revenue Service (IRS) and Ladder Up


This workshop will answer important tax questions for your business including: Are you required to file a tax return? Is your worker an independent contractor or an employee? What will the IRS request during an audit? Are you required to make estimated tax payments? What resources does the IRS have for small business owners?

To register for a workshop, email BACPoutreach@cityofchicago.org or call 312.744.2086.

Also, in case you weren’t aware, BACP offers a Business Start-Up Certificate Program, designed to give business owners the essential elements in starting and growing a business. Attend nine workshops at BACP and learn the essentials of business planning, financing, marketing, legal issues, technology and more. Complete the program workshops within six months and earn your certificate, as well as get free advice on your business plan. You can register for the Business Start-Up Certificate Program at any BACP workshop. Learn about the full set of BACP offerings here.

And visit their Business Video Library here.

Source: City of Chicago :: Business Education Workshop Calendar

Education, IRS, Tips

SECURE Act Summary & Planning Tips

Leave a comment

Just before 2019 ended, Congress passed the SECURE Act (“Setting Every Community Up for Retirement Enhancement”). It had been languishing for months and was suddenly wrapped up in the budget legislation and passed accordingly — a surprise to most of us. It’s designed to make retirement plans more available to American workers, but there are also quite a few revenue-raisers in the bill as well that will throw a wrench into existing estate planning.

As a result: for employers, it’s a good time to revisit the retirement options you’re offering your staff; and for taxpayers, it’s a good time to revisit your retirement and estate planning.

Forbes provided a good summary as to the highlights of the Act.

Several rules related to tax-advantaged retirement accounts were altered. Here’s what will change:

  • The age at which retirement plan participants need to take required minimum distributions (RMDs) has changed to age 72 (changed from 70 ½). This only applies to those who hadn’t reached 70 ½ by the end of 2019.
  • Limited to $10,000 annually, the IRS has approved the use of 529 accounts for qualified student loan repayments.
  • For child adoption and family planning, individuals can withdraw up to $5,000 from 401(k) accounts penalty-free to assist in the cost.
  • Employers with an automatic enrollment into a 401(k) or SIMPLE IRA plan will receive a maximum tax credit of $500 per year.
  • Part-time employees who work at least 1,000 hours throughout a year or have 500 hours of service within three consecutive years can enroll in the employer-sponsored retirement plan.
  • An option for plan sponsors to use annuities in workplace plans to reduce liability if the insurer cannot meet its financial obligations.

If you’re an employer, definitely take a look at the credit available toward starting up a company retirement plan, and if you’re an employee, let your boss know about this credit, and that many part-time employees are now eligible to participate, but without tipping the scales away from full-time, highly-compensated employees. It’s a win-win.

As an employee, remember that there is still a credit for lower-income taxpayers for saving toward retirement, called the Retirement Savers Credit. In my work as a tax preparer I see this as an underused but very valuable perk toward getting folks started on saving for the future. Nerd Wallet wrote up a nice summary of the credit.

The SECURE Act also impacts so-called “Stretch” and Roth IRAs. It caps the distribution period for Stretch IRAs (a type of inherited Traditional IRA plan) to ten years, inflating the taxable income for recipients who otherwise would have taken smaller distributions over a longer period of time. This makes Roth IRAs more attractive — because when a Roth is inherited, it doesn’t have the same effect of bumping beneficiaries into a higher tax bracket (since with a Roth, the tax was paid before the IRA was funded).

Henry Montag of Bloomberg Tax offers a clear explanation of this situation, as well as some great planning tips, here — INSIGHT: Planning Considerations Regarding the SECURE Act.

Some options for estate planning now that “Stretch” IRAs aren’t as attractive include:

  1. Taxable investment accounts
  2. Life insurance
  3. Leave the IRA to a charity
  4. Roth conversions

Regardless of your tax bracket or plans for retirement, the SECURE Act will likely affect you in some way, shape, or form… so be proactive and work with your CPA or lawyer to make sure you’re making the most of it.

Cooperatives, Education

Cooperation Without Incorporation Webinar Feb 20th

Leave a comment

My colleague Dave Swanson will be giving an upcoming webinar for the National Society of Accountants for Cooperatives on the topic of “Cooperation Without Incorporation”.

Topics covered will include:

• What are unincorporated cooperative associations?
• Why form under these state statutes?
• What are the tax considerations of these entities?

The one-hour webinar will be held on Thursday, February 20, 2020 at 2 pm Eastern time.

Source: NSAC Cooperative Learning Network – Cooperation Without Incorporation

Education, Illinois, IRS, Tips

Chicago Feb 2020 Business Education Workshops

Leave a comment

Each month the City of Chicago offers twice-weekly (Wed & Fri) FREE business education workshops presented by experts in private practice as well as representatives from various city departments. There are quite a few good ones this month — see the list below — and they’re all offered at City Hall (right downtown and near public transit). To register for any of them, email BACPoutreach@cityofchicago.org or call 312.744.2086.

City Inspections – Ask Questions, Get Answers
Wed, February 5, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805
Presented by the City of Chicago
To operate a successful business in Chicago you need to know what it takes to maintain compliance. Officials from several City departments will provide insight on how to operate safely, stay compliant, help prepare for inspections and highlight the do’s and don’ts of operating a business.

Construction Project Management
Fri, February 7, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle Street – 11th Floor, Room 1103
Presented by City of Chicago Department of Business Affairs & Consumer Protection (BACP) and Department of Planning & Development (DPD)
Working with design and construction professionals to make your business dream a reality takes smart planning and organization. Learn the best practices for establishing your schedule and budget, hiring the right professionals and dealing with unforeseen challenges to ensure your project is completed on-time and on-budget.    

NO WORKSHOP DUE TO HOLIDAY
2020-02-12

Speak Up and Speak Out: Public Speaking Training for Small Business Owners
Fri, February 14, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle Street – 11th Floor, Room 1103
Presented by Michele Williams MSW, MA, Public Speaking Consultant and Columbia College Speech Instructor
You have started or plan to start your own business. You know you have something special to offer but does the rest of the world? Whether it’s giving an elevator pitch, hiring staff, giving a community lecture, talking to a loan officer, or speaking at a National Conference knowing the basics of public speaking will enhance your ability to confidently speak up and speak out. Your speaker Michele Williams has been adjunct faculty at Columbia College for over 32 years and is a public speaking consultant. She has helped over 1,000 people become more confident public speakers. Topics include: choosing topics, types of speeches, organizing the speech, dealing with fear, relaxation, non verbal communication, relating to the audience, use of language and creating new opportunities. 

How to Obtain a Sidewalk Café Permit
Wed, February 19, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805
Presented by the City of Chicago Department of Business Affairs & Consumer Protection (BACP), Public Way Use (PWU) Unit, Anthony Bertuca
Come learn about the Sidewalk Café Permit Application process by attending this informative workshop.  We will explain the application process, inform you of all the requirements, and help you get prepared to submit an application.  The entire application process may take up to 30 days and the 2020 Sidewalk Cafés Season begins on March 1st.

Choosing the Right Legal Entity: A Small Business Entity Workshop
Fri, February 21, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle Street – 11th Floor, Room 1103
Presented by Chicago Lawyers’ Committee for Civil Rights (CLC)
As an entrepreneur starting a new business, you will be faced with many important decisions; one of the first and most important decisions will be selecting the right legal structure for your business. The legal entity you choose will impact many critical aspects of your business, such as your ability to raise capital, how your company will be managed, its tax treatment, liability protection for managers and more. At “Choosing the Right Legal Entity: A Small Business Entity Workshop”, CLC equitable development and small business attorney, Akele Parnell, will discuss the advantages and disadvantages of various business structures including the Sole Proprietorship, C-Corp, S-Corp, LLC, Benefit Corporation, Cooperative Association and more.  

What You Need to Know About Your Business & Taxes
Wed, February 26, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805
Presented by the Internal Revenue Service (IRS) and Ladder Up
This workshop will answer important tax questions for your business including: Are you required to file a tax return? Is your worker an independent contractor or an employee? What will the IRS request during an audit? Are you required to make estimated tax payments? What resources does the IRS have for small business owners?

Digital Mindset for Growth 101
Fri, February 28, 9:30 AM – 11:30 AM
City Hall, 121 N. LaSalle Street – 11th Floor, Room 1103
Presented by Grow With Google #GoogleDigitalCoaches with JinJa Birkenbeuel 
Learn how to change your mindset from analog to digital by translating your entrepreneurial dreams into online action for your brand and your business. We will give guidance on how to create goal-based strategies for your business that will help it become more “discoverable’ and recognized online so you can connect with customers. We will touch on creative branding, social media, YouTube and content strategies. Come ready with your mobile phone to work and learn!

To register for a workshop, email BACPoutreach@cityofchicago.org or call 312.744.2086.

Also, in case you weren’t aware, BACP offers a Business Start-Up Certificate Program, designed to give business owners the essential elements in starting and growing a business. Attend nine workshops at BACP and learn the essentials of business planning, financing, marketing, legal issues, technology and more. Complete the program workshops within six months and earn your certificate, as well as get free advice on your business plan. You can register for the Business Start-Up Certificate Program at any BACP workshop. Learn about the full set of BACP offerings here.

And visit their Business Video Library here.

Source: City of Chicago :: Business Education Workshop Calendar

Cooperatives, Education, Tips

NSAC Webinar on Internal Controls – Jan 30

Leave a comment

Wanted to give you a heads-up on a January 30th webinar offered through National Society of Accountants for Cooperatives‘ Cooperative Learning Network. (You do not have to be a member to attend.)

I took a webinar a couple of months ago through NSAC by this same presenter, Steve Dawson of Dawson Forensics. I found his style to be approachable and friendly, and the information useful and applicable to all small businesses, not just cooperatives. He even kindly took the time to speak with me afterwards when I emailed to ask for some follow-up information, and offered his time gratis to a client with a time-sensitive question. Clearly he is passionate about helping others in the field.

This upcoming 1-hour webinar (which I will also be attending) seems like something that would be useful for any small business that has grown enough that it has a need for internal controls, but does not know which ones or how to implement them — as well as for accounting and bookkeeping professionals who would like to assist their small business clients in this area. I am eager to hear actual case examples as illustrations of what went wrong and what could have been done to prevent the issues in the first place.

This session focuses on the most common types of internal fraud occurring in Cooperatives. Actual case occurrences serve as the backdrop for presenting what went wrong, the lack of or failure of internal controls, and what can be implemented now to alleviate these types of occurrences in the future.

Source: NSAC Cooperative Learning Network – Internal Controls- Closing the Barn Door before the Cows get out!