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9 Years in Biz, 9 Team Members, 2021 Here We Go!

Welcome to 2021!

This is the start of our 10th year in business!! I started a version of this business with just me and my path was certainly not linear. I worked with different people, systems and processes before I found my love of operational accounting and knew that is what my company would focus on and handle for companies of all industries and sizes. Someone mentioned to me the other day they thought I was “essential,” and it truly made my day.

I have nine people on my team now! That doesn’t even seem real to type. I am hiring full-time employees and starting payroll. We are always looking for good bookkeepers, so contact me if you are interested. As a 100% virtual company, the pandemic did not change the way we work at all, which was a huge bonus for us last year. We love what we do and we thank you for being here!

Let’s dig into some financial matters affecting many of you right now. Contact me about any of these.

1. PPP Loans. Round 2 is now available, with added restrictions. There is money and it won’t be allocated to only big business. If you can show a decrease in one of your quarters of 2020, as compared to that same quarter in 2019 of over 25%, you are eligible to apply. The entire year-over-year comparison can also be used to show the 25% reduction of revenue 2020 versus 2019. Note that the PPP loan amount is not considered revenue. You can use whatever year (2019 monthly average or 2020 monthly average) had more money in payroll as your baseline calculation. I am doing presentations ongoing about this matter and we can chat anytime, as information changes often.

2. PPP Forgiveness. This does not affect your federal income tax whether you received Round 1 or will receive Round 2. There is a new, simpler form that was released for forgiveness of under 50K and 150K. If you received a grant from a state or county level, note that the grant is income for federal tax purposes. Be sure to check with your state for clarification.

3. Taxes. Estimated taxes were due January 15th, so if you haven’t paid, get that done. 1099s need to be sent out by February 1st to your independent contractors (there is a new form this year called 1099-NEC). W2s also need to be sent out by February 1st. For your 1099s, ensure you and your contractor know the amount on the form and they match. If you are self-employed, make sure you are setting aside a percentage (25% – 40%) for taxes and pay your estimated taxes throughout the year.

4. 2021 Stimulus Checks. These are not taxable by the IRS. The payments were made with the assumption that each individual’s 2020 tax return was equivalent to the 2019 return. Good news, if you made over the $75K cap in 2020, that was put in place to receive the first round, you will not have to pay anything back. On the flip side, if you ended up making less in 2020 than 2019, you may be eligible for the $600 and can get it as a credit. Check with your tax accountant and your state on specifics.

Even though I don’t fill out the forms, I am a CPA and know many of the tax laws related to business and I’m happy to help you so you are more prepared when you meet with your tax accountant.

It’s a new year and a new chance to keep those books in order. Happy planning!