Fall 2020 Headlights Newsletter
The latest issue of Headlights, a publication of the AutoCPAGroup, is now available.
Finding, Retaining, and Rewarding the Right Staff and Clients
This article discusses some of the best practices that you can incorporate into your startup or general business to keep adequate clients and customers surrounding your business. Whether it is superior customer service, being open and honest, and/or rewarding great work, these tips can set you apart from the competition. Be sure to check out this link for more details!
To view this article, click HERE to access the original content.
Deducting Losses – Current NOL Rules Related to the CARES Act
This article discusses how the coronavirus pandemic impacted many businesses in a negative way. Despite government funding programs such as the CARES Act and PPP Loan, many businesses are going to finish the year with a negative net operating loss. However, because of these losses, “It is critical for those businesses and especially their financial advisers to be updated on the current rules surrounding the NOL deduction.” Be sure to check out this link for more information!
To view this article, click HERE to access the original content.
Main Street Loans Opening Up for Smaller Businesses
This article discusses the most recent announcement from the Federal Reserve Board. This is significant for small businesses because the minimum loan amount went from $250,000 to $100,000 on three Main Street loan facilities. Additionally, they published a frequently asked clarification document that answers questions concerning the paycheck protection program. Be sure to check out this link for more information!
To view this article, click HERE to access the original content.
Why Hiring a Tax Accountant is Good for Small Business
This article discusses how, although hiring a CPA for your small business comes with a cost, the pros may outweigh the cons in this situation. For example, hiring a CPA will allow you to save precious time and can be used as a trusted source for support. Additionally, your accountant can help you with all finance-related work as well as offer advice on a daily basis. Be sure to check out this article for more details!
To view this article, click HERE to access the original content.
Unclaimed Property Distributions Allowed As Self-Certified Rollovers
The article discusses a recent publication from the IRS in response to multiple requests from stakeholders asking for guidance on self-certifications. Additionally, it outlines what is required within the report as well as the effective dates of this revision. Check out this article for more information!
To view this article, click HERE to access the original content.
Actually, a Recession is a Great Time to Launch That New Startup
It’s safe to say that there are a lot of people worried about an impending global recession thanks to the economic slowdown that the ongoing COVID-19 pandemic has brought with it – and your average entrepreneur and startup founder is chief among them. Obviously, it makes sense to assume that with so many people watching what they spend and with so much uncertainty in the air, it’s too risky to launch that business of your dreams anytime in the near future.
But at the same time, that idea and reality may not line up quite as nicely as you’d think. In fact, some argue that entrepreneurs actually should not worry about a potential recession for the simple reason that the state of the global economy doesn’t directly impact startups on a large scale.
There are definitely factors that will determine whether or not a startup will succeed, but they have less to do with the coronavirus, with an impending global recession, or with any other large-scale matters than you might think.
The Positives of Founding a Startup in a Recession: What You Need to Know
One of the major reasons why founding a startup in a recession isn’t necessarily the major issue you thought it was going to be has to do with the fact that products and services are generally cheaper during these periods of economic downturn. Smart entrepreneurs aren’t scared by this – they’re ready and waiting to take advantage of it.
While larger companies are looking for any opportunity to retract and shed costs, those struggling businesses will likely sell off a lot of their assets at bargain basement rates. Retailers and other organizations will usually drop their prices in an effort to move as much inventory as possible before it’s too late. Interest rates fall to their absolute lowest, meaning that opening new lines of credit (or borrowing money in general) has never been easier.
Sure, none of this is exactly positive for those larger organizations – but it’s good news for your new startup that couldn’t have come along at a better time. Provided that you already have a plan in place, you can save on costs and still bring your vision of the perfect company into reality at the exact same time.
Top Talent Will Always Be Looking for Opportunities
Along the same lines, your startup will obviously need high quality employees to work for, though depending on the financial side of your business, getting to that point may often feel easier said than done.
But in the event that a global recession does occur, this is another one of the major reasons why this could actually be good news for your efforts. As soon as a global recession sets in, those larger companies are going to begin shedding workers – and fast. As unemployment rates rise across the country, it means that there will be a far larger number of qualified, passionate, and talented people available to fill whatever positions you have available.
By putting in the effort today to put a strong hiring plan in place, you’ll know exactly what type of candidates to go after as soon as they become available. Not only that, but you’ll likely be able to secure these people at lower rates than you would have had the job market been stronger in your industry.
In fact, a lot of people agree that this is actually a great opportunity to bring in a co-founder to compliment your skill set. Never forget that a big part of your success will ultimately be determined less by what you do and more by who you’re able to surround yourself with. If you’re able to attract qualified individuals who A) believe in what you’re trying to accomplish, and who B) fill in a lot of the skills gaps that you yourself possess, you’ll be in a far better position than you otherwise would have been – and earlier on in your company’s lifecycle as well.
Entrepreneurs Solve Problems. That Will Always Be True (and Necessary)
In the end, the same factors that will impact whether a startup can succeed are as true today as they were before any of us had ever heard about the coronavirus. They are and will always involve your founding team and their ability to solve a problem for a paying customer. Starting your business with a qualified, well-balanced, and experienced team is something you simply cannot overstate the importance of.
People will always have problems and they will always look to new and innovative companies to help solve them. Yes, the problems may change given what is going on in the world – but the fact that people are looking for real, effective solutions will not.
In other words, it’s still all about the product-market fit, the same as any other time. If your startup was founded on a genuinely innovative idea that spoke directly to the heart of a universal problem that a lot of people are experiencing, it will find its success. It may take a bit longer in a global recession, sure – but the odds are very much in your favor.
Oftentimes, achieving this product-market fit has little to do with wider macroeconomic trends, which is exactly why a recession is probably a far better time to launch your startup than you thought it was going to be. Once you also remember the simple fact that all recessions eventually come to an end – and that those startups that were founded on a stable foundation are in the best position to rebound at that time – you’re looking at a very exciting position for any entrepreneur to be in.
Still Waiting for the IRS to Cash Your Check?
During the COVID-19 pandemic, the IRS has furloughed many of its employees or had them work from home to mitigate the spread of the virus. Many IRS offices remained shuttered for months, and a backlog of millions of pieces of unopened mail accumulated in trailers set up outside IRS facilities.
This includes unopened mail with payment checks, which creates a problem for many e-filed returns with tax due because the IRS computer shows a tax return filed but no payment made. Because the IRS utilizes a significant amount of automation, its computers began automatically spitting out tax-due notices, including to those who had mailed in payments. While most IRS facilities have reopened and IRS employees have returned to work, it will take them weeks, if not months, to get all of the backlogged mail opened and processed.
After receiving complaints from taxpayers and members of Congress, the IRS put information on its website about these outstanding payments: the payments will be posted as of the date when they were received by the IRS, not the date when the Service processes them. In most cases, this will eliminate or minimize penalties and interest for late payments. So, if you mailed a check to the IRS that has yet to clear your bank, with or without a return, the IRS says that you should not cancel or put a stop-payment on the check. However, you should be sure that you have adequate funds in the account from which the check was written, so that the check will clear when the IRS does process it.
Normally, the penalty for a dishonored payment (a bounced check) of over $1,250 is 2% of the amount of the check, money order, or electronic payment. If the amount is $1,250 or less, the penalty is the amount of the check, money order, or electronic payment, or $25, whichever is lower.
To provide fair and equitable treatment during the COVID-19 emergency, the IRS is providing relief from bad-check penalties. The dishonored payment penalty will be waived for dishonored checks that the Service received between March 1 and July 15 due to delays in IRS processing. However, interest and other penalties may still apply.
The IRS has also decided to suspend mailing certain tax-due notices to taxpayers temporarily until the unopened mail backlog is cleared up. If you have received a tax-due notice but know that you already paid the tax, the IRS asks that you wait to contact it about any unprocessed paper payments that are still pending.
So, for now, taxpayers who have uncashed payments need to be patient. There’s no reason to send additional correspondence to the IRS that would just be added to the mountains of unopened mail, and due to high call volumes, phoning the IRS will be of little use at this time.
If you have any further questions, please give our office a call.
