PPP 2.0 - Smooth as Sandpaper

This article came out yesterday: https://www.journalofaccountancy.com/news/2021/feb/sba-ppp-application-review-process-changes.html

The article written by Jeff Drew for the Journal of Accountancy describes some of the program inefficiencies that loan applicants had a strong a hunch of already. Although the SBA had high hopes for making this round of applications being processed faster than ever, we are experiencing exactly the opposite. So, if you are waiting for your loan, be patient, call the lender you applied with and hopefully they call you back.

Happy Scaling!

Benefits of Being Single :)

Like corporations have shareholders, partnerships have partners, limited liability companies (LLCs) have members. They are just fancy words for “owners” of the entities. A single member LLC (SMLLC) is an LLC with only 1 owner, and there are multiple benefits to structuring your entity this way and a few downfalls.

With the SMLLC, you get the legal protection of an LLC and multiple tax options (if done correctly). You can leave the income & expenses in the schedule C of your personal tax return, or elect to form an S-Corp. The S-Corp benefits is it’s own topic, but having the option to elect how to be taxed is a benefit that is incredibly valuable as your business scales.

The Schedule C option leaves you paying 15.3% taxes on your net income. The S-Corp option avoids this tax, but you have to run payroll. This along with greater costs to prepare your taxes, and bookkeeping, it may make sense to just pay the 15.3% tax. At some point after your business booms and you are making tons of income, paying 15.3% tax will not make sense. It will make sense to pay the added costs of the S-Corp because it is more cost effective. One thing to remember, once you elect the S-Corp option, the IRS doesn’t like you going back, so make sure you consult with your CPA to plan properly.

Happy Scaling!

Stop Filing Your Sales Tax If You Have Nexus In California (sort of)!

Due to the covid-19 pandemic, Governor Newsome has granted everyone who needs to file sales tax an extension to file & pay their monthly, quarterly, yearly sales tax payments.

It may make sense to delay your payments & filing, it also may make sense, to take full advantage of the extension and maximize your cash flow to survive or thrive.

Talk to your CPA for more clarity.

Here is a link, so you can find your specific scenario: https://www.cdtfa.ca.gov/services/covid19.htm#:~:text=Returns%20due%20between%20December%2015,relief%20will%20be%20provided%20automatically.

Here is another one: https://www.cdtfa.ca.gov/services/extensions-to-file.htm