hands discussing PPP business loan

Part of the Paycheck Protection Program? Know This

The Paycheck Protection Program (PPP) established by the U.S. Government as part of the CARES Act is designed to help businesses during the COVID-19 pandemic.

For businesses who are part of the Paycheck Protection Program, there are a few tips and guidelines to know and understand:

  • Your bank gives the final recommendation on how much of the loan is forgiven. Be sure you understand their reporting requirements for forgiveness of the loan.
  • The SBA forgiveness rules are not finalized as of this date. Further guidelines should be available in the next few days.
  • What we do know is that at least 75% of the loan must be used for payroll expenses. This is gross payroll (with exceptions for employees earning over $100K yearly), state unemployment tax, health insurance premiums and retirement plan payments.
  • There is a second requirement for payroll and that is with full-time equivalent employees. This means that certain levels of employment must be maintained to get full forgiveness.
  • If you received the Economic Injury Disaster Loan (EIDL) you cannot use these funds for the same expenses as the PPP.
  • The remaining 25% of the loan can be used for rent, mortgage interest, and utilities which includes telephone and internet service. The rental agreement must be in place on or before February 15, 2020.

For more information, contact the experts at David Mills, CPA, LLC.

tax relief employee retention credit words on notepad

Learn About the CARES Act Employee Retention Tax Credit

The recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 pandemic.

The employee retention credit is available to employers, including nonprofit organizations, with operations that have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings.

The credit is also provided to employers who have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis.

FAQs

How is the credit calculated?

The credit is 50% of qualifying wages paid up to $10,000 in total. So the maximum credit for an eligible employer for qualified wages paid to any employee is $5,000. Wages paid after March 12, 2020, and before Jan. 1, 2021, are eligible for the credit. Therefore, an employer may be able to claim it for qualified wages paid as early as March 13, 2020. Wages aren’t limited to cash payments, but also include part of the cost of employer-provided health care.

When is the operation of a business “partially suspended” for the purposes of the credit?

The operation of a business is partially suspended if a government authority imposes restrictions by limiting commerce, travel or group meetings due to COVID-19 so that the business still continues but operates below its normal capacity.
Example: A state governor issues an executive order closing all restaurants and similar establishments to reduce the spread of COVID-19. However, the order allows establishments to provide food or beverages through carry-out, drive-through or delivery.
This results in a partial suspension of businesses that provided sit-down service or other on-site eating facilities for customers prior to the executive order. 

Is an employer required to pay qualified wages to its employees?

No. The CARES Act doesn’t require employers to pay qualified wages.

Is a government employer or self-employed person eligible?

No. Government employers aren’t eligible for the employee retention credit. Self-employed individuals also aren’t eligible for the credit for self-employment services or earnings. 

Can an employer receive both the tax credits for the qualified leave wages under the Families First Coronavirus Response Act (FFCRA) and the employee retention credit under the CARES Act? 

Yes, but not for the same wages. The amount of qualified wages for which an employer can claim the employee retention credit doesn’t include the amount of qualified sick and family leave wages for which the employer received tax credits under the FFCRA. 

Can an eligible employer receive both the employee retention credit and a loan under the Paycheck Protection Program? 

No. An employer can’t receive the employee retention credit if it receives a Small Business Interruption Loan under the Paycheck Protection Program, which is authorized under the CARES Act. So an employer that receives a Paycheck Protection loan shouldn’t claim the employee retention credit.

paycheck and envelope

What Is The Payroll Protection Program?

For small businesses, the most attractive program built into the CARES Act (the federal coronavirus relief package) is the Paycheck Protection Program (PPP). 

PPP is funded to the tune of $349 billion through the Small Business Administration (SBA).

However, the program differs in significant ways from the currently available Economic Injury Disaster Program

First, businesses will apply through individual banks, not the SBA itself.

Second, while technically a loan program, a portion — and potentially all — of the loan can be forgiven, making it act more like a grant. 

About the PPP Program

Eligibility – For-profit businesses with fewer than 500 employees (including hotels and food service businesses that have fewer than 500 employees per location); 501(c)(3) nonprofit organizations; veterans organizations; eligible self-employed individuals; independent contractors; sole proprietorships

Loan amount – The maximum loan size is equivalent to 250% of the employer’s average monthly payroll costs, not to exceed $10 million. Payroll costs are defined broadly to include wages, salaries, retirement contributions, healthcare benefits, covered leave, and other expenses. Put another way, the size of the loan is equal to the cost of payroll for about 10 weeks.

Loan terms – Up to 10 years at 4% with the ability to defer principal and interest payment for between 6 and 12 months. There are no fees, no requirement to secure the debt with collateral, no requirement of a personal guarantee, and no penalty for early payoff.

Loan forgiveness – A portion of the loan (up to 100%) will be forgiven in an amount equal to how much the business actually paid for payroll costs, salaries, benefits, rent, utilities and mortgage interest during the eight weeks following the loan’s disbursement. If employees are laid off or their salaries are reduced there could be a reduction in the amount forgiven. Borrowers will need to apply through their lender for this forgiveness and provide documentation for all costs. Banks will have 60 days to make the determination.

This information provided by the Greater Peoria Economic Development Council.

It’s very important that you contact your banker directly to apply for this program.

stay home house graphic

How To Reach Us While Staying Home

With the events of the last few days (closing of schools and extending the stay-at-home order until April 30th) it’s clear the COVID-19 virus threat is greater than expected.

To protect you and our staff at David Mills CPA, LLC, effective April 2, 2020, we will no longer be meeting with clients until the stay-at-home order is lifted. Our doors will be locked, and reception areas will be closed to walk-ins.  

Our staff is still providing all the services we normally do. We continue to prepare tax returns, bookkeeping and payroll services.  

How does this affect you?

  • Your tax paperwork can be dropped off at our window slot in Morton or just outside the lobby door in East Peoria. We will monitor this to get the information as quickly as possible.
  • You can mail or use our portal service to upload documents.
  • Review copies can be sent by secure email, portal system or mailed.
  • Final copies can be sent by secure email, portal or mailed for a separate fee that covers only the postage.
  • No pickups are allowed during the stay at home order.
  • You can always call or email our office with questions, concerns, etc.

For payroll clients: We will contact you about payroll delivery. This is a good time to consider direct deposit for employees.   We’ll keep you updated on events as they happen.  

Thank you for your understanding and patience during these unprecedented times.

Calendar date circled in purple with the words pay day written

Why Should You Outsource Payroll?

On payday, your employees expect their paychecks to be correct. Errors or oversights on a paycheck can anger and unnecessarily stress an employee. Save the hassle and outsource your payroll.

Ensuring your employee payroll is accurate is vitally important, yet for many small business owners in the Peoria and Central Illinois area, the process is laborious, stressful and never-ending.

Calendar date circled in purple with the words pay day written

When you outsource payroll responsibilities to the experts at David Mills CPA LLC, you get more time to concentrate on your core business. You will have peace of mind knowing your payroll operations are being handled correctly and professionally.

Pay period follows pay period. Accurately completing your company’s payroll requires time and attention. 

Outsourcing Ensures Payroll Accuracy

By outsourcing payroll responsibilities, you can be assured that all special deductions, such as wage garnishments, savings, and health deductions are properly calculated.

Do you know the updated payroll regulations for 2020? With outsourced payroll services, the experts at David Mills CPA LLC ensure your firm is compliant with all current payroll laws.

At David Mills CPA LLC, payroll tax deposits are electronically filed and quarterly payroll tax forms are prepared and filed. They also complete year-end W-2 and 1099 forms as well as worker’s comp audits and any requests for payroll information.

Hiring experts to complete your company’s payroll helps avoid IRS mistakes and penalties. 

When you work with David Mills CPA LLC, you are able to establish a direct deposit option for your employees. Direct deposit saves employees a trip to the bank to cash their paycheck and has become a convenience employees expect.

Outsourcing Payroll Eliminates the Burden on Employees

Outsourcing your payroll eliminates the need to train or cross-train employees to handle payroll. When payroll is handled in-house, a burden is placed on the company every time the person responsible for payroll goes on vacation, takes a leave of absence or quits the company. 

When the payroll employee leaves or retires, they walk out with valuable knowledge that can be hard to regain.

Outsourcing your payroll responsibilities means a knowledgeable team is in place to seamlessly handle your company’s needs.

Contact the professionals at David Mills CPA LLC today to see how their payroll service can meet the needs of your business. David Mills CPA LLC has offices in both Morton and East Peoria.

QuickBooks: How Can David Mills CPA Help?

QuickBooks is a popular tool for businesses to use for payroll, receivables, payables, and inventory. It may be an “easy” tool, but that does not mean that learning that tool is easy. You want to get as much out of your service as possible, and that’s where we come in. We are a QuickBooks Pro Advisor, so we have the skills, knowledge, and experience to teach you how to successfully utilize QuickBooks for your business. We are available to install QuickBooks, train your team, and offer support when necessary.

Installing QuickBooks for your Business

We offer installation services for QuickBooks. It may sound silly for someone else to install your program, but trust us, there’s more to QuickBooks than meets the eye. For example, we can help you by:

quickbooks

  • Ensuring we understand your company and goals.
  • Ensuring your computer hardware can effectively run QuickBooks.
  • Installing the software, design, and set up the chart of accounts.
  • Setting up payroll, receivables, payables, inventory, and other needed features.
  • Determining a start date and loading beginning balances.
  • Entering your outstanding checks and deposits as well as other items affecting your bank statement so you’ll be able to complete bank reconciliations through the software.
  • Preparing a trial balance to ensure correct numbers as of the starting date.

Once QuickBooks is installed, we are also there to walk your team through training. We use your business’ actual data, not generic data, so your team will be familiar with your business’ values. We come to your location for training, so there’s no need to travel. You also don’t need to worry about your team reaching information overload. We train in short sessions; about 2-3 hours. We’re happy to provide any answers we can to your questions and give any information we can on how QuickBooks best suits you and your business. Best of all, we provide support by phone, as well as on-site. For training questions, we can remotely log in to your computer to show you step-by-step the answer to your problem. Contact us today for QuickBooks installation, training, and support.

 

David Mills CPA: East Peoria Location Now Open!

Exciting news! David Mills CPA has officially opened our East Peoria location. We can provide your business with accounting and financial services. Our office is open Monday-Friday from 8:00 AM until 5:00 PM.

David Mills Services Offered David Mills East Peoria location

In order to best serve our customers, we offer a wide variety of services. We can assist your business with the financial aspects so you can focus on what is most important to you. A list of our services include:

  • QuickBooks
  • Bookkeeping
  • Family Office Services
  • Trust & Estate Taxation
  • Income Tax Planning
  • Daily Money Manager
  • Financial
  • Tax Preparation
  • Controller/CFO Services
  • Payroll
  • Business Structure
  • Cash Flow & Budgeting

Now Booking Appointments

Our East Peoria location is now booking appointments. For all of your financial needs, contact David Mills CPA today. We look forward to working with you and serving our customers in East Peoria.

 

8 Reasons You Should Outsource Payroll

8 Reasons You Should Outsource Payroll

Are you a small business owner who is handling payroll processing yourself? Payroll may seem like something that you can operate on your own. However, there are many demands that come along with handling payroll. Some demands include keeping up to date with payroll laws, tax deposit rules, and filing state and federal mandated forms on time so you are not penalized for missing a deadline. Outsourcing payroll not only takes care of all of these functions but allows the business owner to focus on aspects of the business that directly affect its future. Outsourcing payroll provides several benefits.

Outsource payroll1. It saves you time.

Operating payroll services requires a lot of time that many small businesses do not have. From entering data to researching new laws or updates, the amount of time that payroll takes up is not desirable to many business owners. Outsourcing the service allows you and your employees to offer their full attention to the direct needs of the business.

2. It saves you money.

Outsourcing payroll prevents your business from having to hire someone that is specialized in this particular service. This reduces the cost of overhead. Second, a company can also save money by saving time. Employees need to be paid for their hours of work. By hiring an affordable full-service provider, this can be avoided.

3. No need to worry about payroll tax filing.

Payroll is a complex and risky business operation. It can be difficult if you do not have an expert in this field who is handling tasks. Federal, state, and local payroll tax laws are becoming more and more detailed. Without having the time to research, learn and apply these updates, you run the risk of calculating or filing your payroll taxes incorrectly or late. By outsourcing payroll, you never have to worry about these issues again.

Payroll security4. You eliminate security risks.

Security risks can be a problem. Companies can run the risk of an employee tampering company records, embezzlement of funds, or identity theft. Even with the most trusted employees, business owners should be cautious. In-house payroll software is also something you need to be careful with and do your research to see how secure your payroll data really is. Choosing to outsource payroll with a reputable company can make you feel assured that your confidential payroll data is secure at all times. This is a huge part of the service provided to clients.

5. Being able to simply understand reports.

Payroll operations can be a difficult subject to learn and understand. Receiving payroll reports tailored to your specific company is a huge benefit when considering outsourcing. An outsourced payroll company can help explain data in a way you will understand. Consider hiring a full-service company who prepares union reports and others as needed.

6. Online payroll processing is available.

It is important to make sure you are hiring a company who can also provide online payroll processing. Online payroll processing allows your employees will have 24/7 access to their information such as current payroll stubs or last year’s W-2 forms. Employees are able to request changes to their withholdings, etc., without having to take any time away from running your business.

7. Reporting issues are taken care of.

Outsourcing companies can take care of any reporting issues that come about. Some examples include child support audits, Worker’s Comp audits, 1099 processing, W-2, and Wp3 processing, preparation of federal and state registration forms, or any other issues that may arise, the full-service company will be able to take care of it for you. Also, this will save your business additional time and energy.

Payroll professionals8. The expertise of hiring the professionals.

Hiring professionals who have expertise in payroll will put your mind at ease. You can feel confident knowing that they will take care of every last detail with payroll processing. Operating payroll can create complexities that only take your time and money. This ultimately hinders the business itself. A professional company will take over payroll tasks.

If you are considering outsourcing payroll, consider all of the benefits that come along with it. Some benefits include saving time and money, securing your data, and allowing you to no longer worry about handling payroll functions and all of the complexities that come along with them. David Mills CPA, LLC provides expert accounting and financial services to both small and medium businesses, as well as to individuals. Our CPAs can assist you with a multitude of accounting services in Peoria, IL, Morton, IL, and the rest of Central Illinois. If you are interested in payroll services or any other financial services, you can contact us here.