Let’s start today with a couple questions I’ve been getting here at Phillip & Associates, LLC from our NYC small business clients about the second round of the PPP, and some of the new provisions of the recent bill that affect businesses.
If I received the first PPP, should I include this number in calculating whether I “lost 25%+” to qualify for the second round?
As you might remember, the requirement in order to receive a second PPP is that the small business has less than 300 employees and can demonstrate a revenue reduction of 25 percent. But that revenue reduction figure should NOT include any funds from the first PPP.
Also, you can calculate this either by quarter, or by fiscal year — whichever is more advantageous. Many East New York area small businesses need help with these calculations … that’s what we’re here for.
If I received the “grant” portion of the EIDL, is this considered taxable income?
Now … I’m sure there might be more things you’re wondering. Send us an email, or use this: https://accounting-nyc.com/tax-services/
But I also have questions for YOU, reader, if you are a local small business owner …
I’ve put them together below. They are a continuation from last week.
My NYC Small Business Health Quiz (Part 2)
“Life is really simple, but we insist on making it complicated.” -Confucius
Regardless of national events, or where things are at with PPP and EIDL — as a East New York (or beyond) small business owner, it’s important that you take a REGULAR, clear-eyed look at the underlying legal and financial foundations of your business.
As we all pull our tax documentation together, I can’t think of a better time.
I started with these last week, and I’m wrapping them up today.
Take a look at each of these questions, and if you are troubled by any of your answers — send me back an email. If it’s not something we’re equipped to handle, we can equip you with a good advisor.
Regardless, we can talk about them when we do meet for your taxes.
Powell Phillip’s Small Business Health Quiz
From last week…
#1: Is the value of your business firmly established?
#2: Is there an emergency plan?
(Will & Asset Protection Strategy)
#3: What happens next?
(Business Succession Plan, and more)
Now to the next questions…
#4: What are your retirement plans?
Questions to consider:
- Do I know how much income I will actually need at retirement?
- How much control in the business must I maintain to secure my retirement income?
- Have I looked into financing options for key employees to buy me out?
- Do I want to be running my business, full-time, five years from now?
- Do I have contribution protection for my retirement if I were to become disabled?
Too many business owners view their business as their “retirement cash cow” … but have not made serious plans for how it can BE that cash cow.
#5: Are all of your eggs in one basket?
Questions to consider:
- Do I have reliable investments, other than my business?
- Will my business assets account for less than 25% of my retirement plans?
- In the past year, have I spent more than one hour planning my retirement?
If you haven’t diversified your retirement income outside of your business, you could be in trouble.
#6: Is there a REAL tax strategy?
Consider these questions …
- Am I proactively planning to deal with tax law changes?
- Have I determined my financial goals — and how taxes will affect them?
- Will I maximize my tax-free earnings in retirement (and before retirement)?
- Do I have an exit plan for my business — and is it written down?
Again, all of these issues always seem “procrastinate-able” on the front end … but if you don’t have a good answer to more than a couple of the above questions, you might be cruising for a financial bruising.
We will either help you fix these issues ourselves, or put you in touch with someone competent who can help fix them. Use this:
I’m grateful for our partnership, and for your referrals.
Claudine Powell Phillip
Phillip & Associates, LLC
Feel free to share this article with a NYC area (or beyond!) business associate or client you know who could benefit from our assistance. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.