PPP Definition of Payroll Costs

With the recent roll-out of the Payroll Protection Program (PPP), many small business owners (as well as accountants and bankers), are confused as to what qualifies as “Payroll costs” used in the calculation to determine the amount to be funded to the small business. Here is what the CARES Act defines as Payroll Costs: The sum of payments of any compensation with respect to employees that is a: Salary, wage, commission, or similar compensationPayment of cash tip or equivalentPayment for vacation, parental, family, medical, or sick leaveAllowance for dismissal or separationPayment required for the provisions of group health care benefits, including insurance premiumsPayment of any retirement benefitsPayment of State or local tax assessed on the compensation of employees AND The sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in one year, as prorated for the covered period.  The CARES Act specifically EXCLUDES the following as Payroll Costs: The Compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the covered periodTaxes imposed or withheld under chapters 21, 22, or 24 of the Internal Revenue Code of 1986 during the covered periodAny compensation of an employee whose principal place of residence is outside of the United StatesQualified sick leave wages for which a credit is allowed under Section 7001 of the Families First Coronavirus Response Act (Public Law 116-127) OR Qualified family leave wages for which a credit is allowed under Section 7003 of the Families First Coronavirus Response Act (Public Law 116-127) As you can see, [...]

By | 2020-04-06T13:31:03-05:00 April 6th, 2020|Uncategorized|Comments Off on PPP Definition of Payroll Costs

Illinois Extends Tax Filing Deadline, Announces Small Business Assistance

The COVID-19 pandemic has created a number of challenges for individuals and businesses across the country, including here in Illinois. Due to the sudden increase in layoffs as well as unexpected unpaid sick leave, many individuals and small businesses are being negatively affected. To help combat the economic consequences facing millions of people in Illinois, the state is offering help in multiple ways. Illinois State Tax Deadline Extension Illinois has extended the due date for filing 2019 taxes by 90 days. The deadline is now July 15, 2020. This applies to both individuals and businesses who still need to file. The federal tax filing deadline has also been extended until July 15, 2020. Individuals and businesses have until then to file their taxes, without penalty. Individual city tax deadlines may differ. State Help for Small Businesses in Illinois The state has prepared a Small Business Emergency Loan Fund, which was created to help small businesses with fewer than 50 employees and total revenues for 2019 under $3 million. The fund has made $60 million available to those small businesses that qualify. Each small business can apply for up to $50,000 and can expect a low interest rate. Small businesses can apply for a loan on the Department of Commerce and Economic Opportunity’s website. The state of Illinois has also announced a variety of other aid for residents, including an expansion for unemployment insurance, the delaying of evictions, a suspension of utility shutoffs and penalties, and more. At Evolve, we are here for your business through all financial challenges – including economic uncertainty. We offer consultation services and are here to assist you in applying for funds and grants issued by Illinois. Contact us by phone [...]

By | 2020-04-01T08:36:45-05:00 April 1st, 2020|Uncategorized|Comments Off on Illinois Extends Tax Filing Deadline, Announces Small Business Assistance

“Paycheck Protection Loans”: Important News for Small Businesses During COVID-19

The COVID-19 pandemic has created much uncertainty and many consequences for small businesses. From having to close storefront locations to potential layoffs and more, small businesses are facing significant changes and hardships. Because of this, the government has crafted and passed a plan to provide some much-needed assistance in the form of a $2 trillion relief package. A large percentage of this package will go toward supporting small businesses with 500 employees or fewer. The relief package is composed of a number of different programs to help keep the economy stimulated, and small businesses running. For small businesses currently experiencing negative effects of the pandemic, the biggest factor in the plan is the “Paycheck Protection Loans” initiative. This $350 billion loan program is an effort to help small businesses retain their employees, while still being able to afford daily obligations. The main goal of providing these loans to small businesses is to ensure employees are continuing to receive a regular paycheck. If an employer is able to keep their employees on their payroll through June 2020, the amount loaned to them for costs that meet the set eligibility requirements would be forgiven. However, if there are layoffs or reductions in pay during this period, the total of the forgiven portion of the loan would be reduced. A small business can apply for up to $10 million of relief through this loan, and the money can be used to cover up to two-and-a-half months of payroll, as well as other expenses that include rent, utilities, and existing debt. “Paycheck Protection Loans” will have a low interest rate of no more than 4%. At Evolve, we are here for your business through all financial challenges. Our proven [...]

By | 2020-04-01T08:36:15-05:00 April 1st, 2020|Uncategorized|Comments Off on “Paycheck Protection Loans”: Important News for Small Businesses During COVID-19

Individual Stimulus Checks: What to Expect

The COVID-19 pandemic has caused more than just health-related side effects. From a market crash to individuals losing work, this outbreak will have financial consequences for many people. Because of this, a federal package worth $2 trillion has been crafted in an effort to help individuals, while encouraging a stimulated economy. What is a stimulus check? A stimulus check is money sent to a taxpayer by the government with the hope of revitalizing the economy. The money is seen as spending cash for individuals, which when consumers use, boosts the overall market. How much money will my stimulus check be? As a part of the plan, most individuals in the United States of America will be given a one-time stimulus check for up to $1,200. Married couples can receive up to $2,400 plus an additional $500 for each child under age 17. The exact amount you will receive is determined by your income and the size of your family. Individuals earning up to $75,000 or couples earning up to $150,000 annually can plan to receive up to the full amounts listed. The amount of the stimulus checks decreases for those making more, up to the cutoff thresholds. Individuals making above $99,000 annually would not qualify for a payment, nor would couples making double that. Stimulus check amounts will be decided based on either a person’s 2018 tax return records or 2019 tax return records, if they have already been filed. The due date for 2019 federal tax filing – as well as many state tax filings – has been extended to July 15, 2020. Other notable parts of the plan include the waiving of the 10% early withdrawal penalty for retirement fund distributions up to [...]

By | 2020-04-01T08:35:42-05:00 April 1st, 2020|Uncategorized|Comments Off on Individual Stimulus Checks: What to Expect

2019 Tax Filing Deadline Extended to July 15, 2020

Due to the COVID-19 pandemic and surrounding current events, the IRS has extended the deadline for filing 2019 taxes by an extra 90 days. Tax filings for 2019 will now be due on July 15, 2020. This change is effective only for individuals’ personal 2019 federal income tax returns.  The due dates for personal state and local income tax returns vary by state and locality – Illinois has currently extended their due date to be in-line with the new federal due date of July 15, 2020. There will be no penalties or interest charged individuals who file after April 15, 2020, but before the new deadline of July 15, 2020. This extension grants individuals a grace period for filing during the ongoing COVID-19 outbreak. The 90-day extension was put into place in an effort to help citizens being affected by the virus and the closures, social distancing, and quarantining that is now widespread across the country.  Individuals must comply with the new tax filing deadline of July 15, 2020, or else be subject to applicable penalties and interest. If you are unable to file by this new date, you must take the appropriate steps to contact the IRS and show reasonable cause for the inability to file by the new deadline. While this time extension only to individual tax returns, if you have not yet filed your 2019 federal and state corporate or partnership income tax returns, Evolve Financial can work with you to get those tax returns filed, and we will work directly with the IRS and state agencies on your behalf to see if any assessed penalties and/or interest can be abated. If you have not already filed your 2019 personal and/or business [...]

By | 2020-03-27T10:30:46-05:00 March 23rd, 2020|Uncategorized|Comments Off on 2019 Tax Filing Deadline Extended to July 15, 2020

IRA Rules and Regulations Overview for 2016

When it comes to saving for retirement, an Individual Retirement Account (IRA) is one of the best ways to ensure you have money set aside for later in life. An IRA is a common type of investment vehicle that is designed to help you prepare for retirement, while offering varying tax advantages. […]

By | 2017-05-18T13:34:40-05:00 February 7th, 2017|Uncategorized|Comments Off on IRA Rules and Regulations Overview for 2016

IRS De Minimis Safe Harbor

The New Year means more than just resolutions and celebrations – it also means the beginning of tax season. With tax season looming, it is important to familiarize yourself with any changes the IRS has made to the filing regulations that may affect your business. One of the major changes implemented by the IRS for the 2016 tax year includes the increasing of the de minimis safe harbor threshold from $500 to $2500. […]

By | 2017-01-23T10:58:00-05:00 January 17th, 2017|Taxes|Comments Off on IRS De Minimis Safe Harbor

Net Operating Loss: Carryback and Carryforward Provisions

Taxes are a tricky subject. Love them or hate them, taxes help to provide for our country’s services and wellbeing. While some may not agree with the implementation of certain taxes, and politicians may vow to change them, the reality is that they are here to stay, so it is best to be educated on how certain policies affect you and your business. A big part of understanding best tax practices is knowing how to pay them, and how to use them to your advantage. With current headlines claiming that certain tax policies like the Net Operating Loss Carryback and Carryforward Provisions are either a genius move or a cowardly loophole, the fact of the matter is that the Net Operating Loss Provision is a legal tax practice that is used by many businesses each year. […]

By | 2017-05-18T13:34:40-05:00 November 8th, 2016|Taxes|Comments Off on Net Operating Loss: Carryback and Carryforward Provisions

IRS Tax Guidance: Foreign Student Nanny

For many college students all over the world, studying abroad is an exciting part of an educational career. Not only do they get to live in a foreign country, but they also get to experience that country’s culture up close and personal through experiences like classes and work. In fact, many students like this, or “au pairs”, who board temporarily in someone else’s foreign home for a period of time work as a nanny for the family they are living with. […]

By | 2017-05-18T13:34:40-05:00 September 21st, 2016|Taxes|Comments Off on IRS Tax Guidance: Foreign Student Nanny

First Time Penalty Abatement

When it comes to your taxes, the last thing you want to do is make a mistake. Throughout the year you should be constantly checking in on your finances, making sure you are on track to complete the necessary legalities. The IRS (Internal Revenue Service) expects all persons to be proactive when it comes to filing taxes, and holds everyone accountable for his or her own timeliness of the matter. […]

By | 2017-05-18T13:34:40-05:00 August 29th, 2016|Taxes|Comments Off on First Time Penalty Abatement