2020 Accounting Today’s Best Accounting Firms to Work for
Biden’s tax plan
Biden has been critical of the TCJA and his planned tax law changes call for higher taxes on both ordinary and capital gain income for high net worth individuals. His proposed changes include:
- Raise the top marginal individual income tax rate for incomes above $400,000 to the pre-TCJA rate of 39.6%.
- Tax long-term capital gains and dividends above $1 million at the ordinary income rate of 39.6%.
- Cap the value of itemized deduction to 28%, thereby reducing the benefit for taxpayers in rate brackets higher than 28%.
- Raise the corporate income tax rate from 21% to 28%.
- Institute a 15% alternative minimum tax on corporations with $100 million or more in profits.
- Raise the Global Intangible Low Tax Income (“GILTI”) (a tax on income from foreign affiliates, including foreign-held intangible property and its related income) rate from 10.5% to 21%.
- Institute a 12.4% Social Security payroll tax, to be split between employers and employees, on income earned in excess of $400,000.
- This proposal results in a “donut hole” where wages between the current cap of $137,000 and $400,000 are not taxed.
- Phase out the Section 199A deduction on taxable income in excess of $400,000.
- Expands the Earned Income Tax Credit (“EITC”).
- Expand the Affordable Care Act’s premium tax credit.
Trump’s tax plan
Although President Trump has not officially issued a tax policy proposal for his re-election campaign, the budget proposals submitted to Congress since the passage of the TCJA have assumed the individual income tax provisions set to expire at the end of 2025 will be made permanent. Trump is set to unveil this month a Tax Reform Plan for low-income and middle-income taxpayers – Tax Reform 2.0.
Benefits of Outsourcing
Business clients often ask us: Should we outsource our accounting needs? What exactly are the benefits we can expect?
In small businesses, we often see owners or employees who struggle to effectively balance several competing job responsibilities. Examples include an office manager who is forced to manage human resource and administrative functions while trying to do bookkeeping as well. Other situations include business owners who try to manage their company’s growth but don’t want to relinquish control over the finances.
The decision to outsource bookkeeping and accounting enables businesses to increase their bottom line and create more opportunities to focus on their core business. By outsourcing, businesses gain access to a team of devoted CPA experts who stay focused on the company’s financial well-being, which allows ownership to concentrate its time and expertise where it is needed.
Businesses can also save money on salary increases, employer payroll taxes, insurance and fringe benefits through outsourcing. Recently, Brinker Simpson was hired to replace the controller of a $3M business and saved the company over $50,000 in salary and fringe benefits.
When partnering with an outsourcing firm, business owners do not have to worry about the cost of employee turnover or spending time looking for new staff. According to the Society for Human Resource Management’s new Human Capital Benchmarking Report, the average cost to hire a new employee is $4,129 and the average time to fill a position is 42 days.
As small businesses grow and hire more staff, many CEOs do not have the time to focus on accounting. With the business growing at an accelerated pace, more advanced reporting is needed, and CEOs rely on a variety of financial information to make informed decisions. They need a consistent and trusted advisor. Outsourced Accounting firms can assist with a variety of functions including monthly and annual reporting, budgeting and forecasting, cash management, and bookkeeping. Business owners can take comfort when the work is backed by a team of CPAs who focus on instituting processes and controls to maintain the security of company assets.
Brinker Simpson offers a variety of flexible solutions to provide excellent service to fit your company needs. If you would like more details on how your business can gain access to our team of experts, including tax, audit, and advisory professionals, please contact Donna Stilwell , CPA, CFE at firstname.lastname@example.org for a discussion on how we can help your business with outsourced accounting needs.
Sadly, it did not take long for scammers to take advantage of the programs being offered to help individuals and businesses through this current situation. Don't let your guard down! Remember, the IRS and banks will not contact you for bank account information or to verify social security numbers or information on your tax return. Also, you should not pay anyone a fee to process your stimulus check. The Federal Communications Commission (FCC) is receiving reports of potential scams, warning on their website:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides for an emergency advance of $10,000 to small businesses and private non-profit organizations affected by COVID-19. In order to receive the advance, you must apply for the Economic Injury Disaster Loan (EIDL) and request the advance at the end of the application process. The loan advance funds will not have to be repaid even if the EIDL application is denied. The EIDLs are up to $2 Million with terms up to 30 years and interest rates of 3.75% for small businesses and 2.75% for non-profits. EIDLs requesting funds up to $200,000 can be approved without a personal guarantee and do not require real estate as collateral.
As mentioned in our previous email and blog post, on Friday President Trump signed a $2 trillion stimulus package. In a move designed to keep small businesses afloat, the CARES Act allocates $349 billion to loans the Paycheck Protection Program loans under the Small Business Administration. We provided details on the Program in a previous post.
Lenders are working out the final details with the Small Business Administration (SBA), but you can take steps now to prepare for the application process to avoid delays. Applications may be ready to be processed as early as next week. We suggest that you contact your bank and ask if they are qualified SBA 7(a) lenders and participating in the Payback Protection Program. Inform them of your interest in applying and ask how you can prepare. Please feel free to reach out to our team with questions.
President Trump has signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act just a few hours after the House of Representative passed the legislation. The historic $2 trillion economic recovery package includes direct payments to individuals, significantly expanded unemployment coverage, business relief through payroll credits and attractive SBA funding options, and significant resources for health care facilities in dire need of relief.
Federal Coronavirus Aid, Relief and Economic Security (CARES) Act
As of today, the Coronavirus Aid, Relief and Economic Security (CARES) Act has been passed by the Senate. As of this writing, the CARES Act still requires approval from the House and the President’s signature before becoming law. Included in this Act is the authorization of $349 billion of federally guaranteed loans to qualifying small and medium sized businesses through the expansion of the SBA 7(a) with the “Paycheck Protection Program.” The Senate debated the legislation before it was approved late last night and the House is expected to vote on it tomorrow.
Pennsylvania COVID-19 Working Capital Access Loan Information
Program guidelines for CWCA, a program supplying working capital to businesses negatively impacted by the COVID-19 pandemic, were approved by the PIDA (PA Industrial Development Authority) Board on March 23, 2020. Please contact your county’s Certified Economic Development Organization (CEDO) for where to submit the application. Some counties are setup to receive applications.
A list of county CEDO organizations can be found here: https://dced.pa.gov/cedo/
The White House and congressional leaders from both parties reached a $2 trillion stimulus deal early Wednesday that will include direct payments to most Americans and an unprecedented amount of money to small businesses that have been pushed to the brink.