Starting for 2020, expect to receive a Form 1099-NEC instead of a Form 1099-MISC to report income you received as a consultant or independent contractor during the year. The due date for businesses to issue 1099s to their contractors who earned more than $600 during 2020 is 1/31/21.
More info is available at: https://www.irs.gov/instructions/i1099msc
On December 27th, President Trump moved forward and signed the COVID-19 relief bill. This legislation had expeditiously passed both the House and Senate the prior Monday and was waiting for the President’s signature to make it official. This bill is the second major stimulus package passed in 2020. The final version of this bill provides needed financial help for both business and individuals. Highlights of the $900 billion Coronavirus relief package as it impacts individuals are noted below:
Additional Stimulus payments to taxpayers to begin being paid out – similar to the Economic Impact Payments (EIP) paid out earlier this year.
Expansion in the special charitable deduction allowed for Non-Itemizers.
Revocation on the Limitation on Charitable Contributions.
Expansion of expenses qualifying for the educator expense deduction.
Changes to employer flexible spending accounts (FSAs).
Additional unemployment benefits provided
Personal financial planning is an ongoing process. Financially speaking, 2020 wasn’t a bad year for more than half the country’s workers (including most healthcare professionals) that weren’t involved with the restaurant, travel or entertainment industries severely impacted by the Covid-19 pandemic . The stock markets ended the year at all time highs. Real estate prices around the country outside of the major cities continue to increase. And interest rates and inflation both remain near historic lows.
Hello 2021. Who knows how financially friendly this year will be – especially with the pandemic still raging out of control and a new presidential administration taking over later this month. For that reason, here are nine prudent steps you can take to keep your personal finances moving on the right track:
Hopefully 2021 will be a better year for everyone than crazy 2020.
Lenders are now accepting applications for the Second Draw PPP loans. Keep in mind that the recent enacted Stimulus Package included a provision that the PPP2 Loan can be both fully forgiven and also not taxable to the business owner.
To be eligible for PPP Round 2, your practice must show at least one quarter during 2020 where the revenue dipped by more than 25% from the same quarter of the previous year. Most healthcare practices that were forced to close last spring should qualify based on their Q2 numbers. We gave instructions at: https://schwartzaccountants.com/2021/01/ppp-update/ on how you can create a report in your QuickBooks Online to confirm that your quarterly revenue fell by at least 25%. You are required to include the quarterly revenue for 2019 and 2020 on the Second Draw Borrower application form.
What if your business wasn’t open for all four quarters of 2019? According to the instructions:
Other requirements include being open on 2/15/20 and not currently permanently closed, and the business must have spent the full amount of the First Draw PPP Loan. The rules also state that current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant, and the Applicant understand that SBA encourages the purchase, to the extent feasible, of American-made equipment and products.
How Much PPP2 Can You Get?
Business owners can base the PPP2 application on the 2.5 times the average monthly payroll for 2019 OR 2020. The payroll is capped at up to $100k per employee, plus the employer payments for group health, life, disability, vision and dental insurance, employer retirement plan contributions, and state and local taxes assessed on employee compensation. Group benefits and retirement plan contributions are excluded for sole proprietors and partners while S-Corps exclude just the group benefits.
Qualified Expenses:
Like Round 1, up to 40% of the PPP2 funds can be spent on non-payroll costs as part of the PPP Forgiveness calculation. The SBA explains that PPP2 does expand the allowable expenses as follows:
Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, covered utilities, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures, and not more than 40% of the forgiven amount may be for non-payroll costs. If required, the Applicant will provide to the Lender and/or SBA documentation verifying the number of full-time equivalent employees on the Applicant’s payroll as well as the dollar amounts of eligible expenses for the covered period following this loan.
More information and useful links are available at:
Second Draw PPP Loans:
Paycheck Protection Program Second Draw Application Form:
https://www.sba.gov/document/sba-form-2483-sd-ppp-second-draw-borrower-application-form
Paycheck Protection Program How To Calculate Maximum Loan Amounts For First Draw PPP Loans And What Documentation To Provide – By Business Type
https://www.sba.gov/document/support-how-calculate-ppp-loan-amounts
Please reach out to your PPP Lender to get the ball rolling. If you want us to prepare the PPP application for you, our fee is $750, discounted to $500 for clients who use our firm’s payroll service.
The deadline to apply for PPP Round 2 is 3/31/21.
2/15 Self-Reporting Deadline Extended to Unspecified Date
Did you receive more than $10k in Provider Relief Funds (PRF) from HHS? If so, please go online to the Provider Relief Fund Reporting Portal available at: https://prfreporting.hrsa.gov and register as a new user. Keep in mind that your Optum ID login credentials used to originally apply for the PRF won’t work for this Portal. Please let us register using our email address if you plan to have us submit this info to HRSA on your behalf for a fee of $500.
The purpose of this new Health Resources & Services Administration (HRSA) Portal is for PRF Recipients to submit the required post-payment reporting info to support that the Provider Relief Funds were used appropriately per the terms of the subsidy program available at: https://www.hhs.gov/sites/default/files/provider-post-payment-notice-of-reporting-requirements-january-2021.pdf.
The good news is that the previously announced 2/15/21 deadline for PRF recipients to submit the requested information appears to have been extended to some future unspecified date. According to the Provider Relief Fund (PRF) Reporting Portal FAQs, Last Updated 1/15/2021, available at: https://hrsac19.my.salesforce.com/sfc/p/#t00000004XgP/a/t0000001FId8/wN.4dTa.NRiNhwh_0CBblH6gvvedhqOt7_.5OS7rP6U
FAQ #1: Do I need to register for an account in the PRF Reporting Portal?
PRF recipients who received one or more payments exceeding $10,000 in the aggregate are required to report on several required data elements as part of the post-payment reporting process and therefore must register for an account.
FAQ #26. How can I report on the use of funds?
Providers will be notified when they should complete the second step of the process and report on the use of funds. This functionality is not currently available. You will be able to log into the PRF Reporting Portal at https://PRFReporting.hrsa.gov when the system is ready for providers to start reporting on the use of funds.
FAQ #27. When will I be able to begin reporting on the use of funds?
The operability of the PRF Reporting Portal for reporting on use of funds has been delayed. HRSA will announce the timeline for submission of these reports when it is available.
FAQ 28. How will HRSA communicate to providers when the PRF Reporting Portal is open for the submission of reports on the use of funds?
HRSA will communicate via broadcast email to the email address that was provided during registration. Providers can also check the Reporting Requirements and Auditing webpage for the latest updates about the PRF Reporting Portal.
Guest Writer Brenda Loan Baker, Executive Coach, Fortune Management Northeast
Here we are, the first week of January. The traditional time goals for the new year is upon us! What is the difference between the people who set their goals and reach or surpass them and those who fall short? What things can you do to make your goals more achievable or even likely? Read on to determine what determines your goals achievability.
It is easy to dream big and set lofty goals. I want to earn $X this year, I want to increase my collections to $X dollars, I want to have more confidence in myself and try new things. These are all great goals, attainable goals. These goals on their own are not just going to happen. The missing piece is how are you going to do that? If you want to make more money or increase your collections, start with where are you now? Come up with a list of 20 things you can do to get to you goal. There is science in the 20. Sometimes the last few things you come up with are the best because they are outside of the box thinking.
A secret weapon in goal achievement is looking deeper, and really clearly determining your why. Why do you want to lose those 30 pounds? What will that get you? You might determine that it isn’t just about the number on the scale. Perhaps it is something bigger, like increasing your health so that not only are you around to meet your grandchildren but healthy enough to run after them. Determining your why you will create a much stronger buy in for yourself. It isn’t just about a pound on the scale, it reminds you what you have to gain by meeting your own goals. This buy in helps you get up at 6am because it is the only time all day, or to leave that piece of cake on the table. It helps your goals become more achievable.
Next look at your list of 20. Pick 2 or 3 that you think might really work. Decide how you will try them, creating your action plan. Take massive consistent action. For example, to increase my patients I will ask one patient every day for a referral, I will send appointment reminders, and I personally call every patient after sedation treatment.
Once you have your clear action plan, decide how you will be accountable. Perhaps you will share with a friend and keep each other accountable (accountability partners). Maybe you will keep yourself from your celebratory Friday wine until you have all your boxes checked. Find some way to help you be accountable.
With these actions we need to measure and monitor. How do you measure confidence? How do you know if it has changed? With confidence, or any other thing, you want to set goals around, you can create a metric for it. How confident are you right now on a scale of one to 10, one being not at all and 10 being super confident?
The more consistent you are the better results you achieve. Do these things you have determined for a few weeks, a month (30 days) is a great sample time. When completed, look back. What worked? What did not work? Adjust your action steps and try again. You may need to go back to the drawing board here and revamp your action steps. Be open to trying something new or different.
Here are the steps:
Following these five steps will give you an exponentially better chance at reaching your goals this year.
I hope you make 2021 a great year. May you concentrate on something important to you, set your goals and reach them!! Connect with me to help you define and create this action plan and make 2021 the year you always dreamed of!
For more info, please email: brendaloan@fortunemgmt.com