Tax & Accounting Update
PPP Loan Forgiveness Application Simplified
Treasury and the US Small Business Administration (SBA) have decided to simplify loan forgiveness application form for all Payroll Protection Program (PPP) loans that were issued in total amount of $50,000. Businesses that received PPP funds in the amount of $50,000 or less will need to have an officer initial, sign simplified forgiveness application (Form 3508S), and submit supporting documents. Although, extensive calculations are not necessary to be submitted with the Form 3508S supporting documents are still required. Every business must maintain documentation for six years after the loan is forgiven. The supporting documents need to be made available to SBA representative at any time upon request.
The businesses who have received PPP funds in excess of $50,000 will need to file Form 3508 or Form 3508EZ, and also submit necessary documentation per respective form instructions.
Tax Topics Simplified
Louisiana; high poverty level and high sales taxes
Did you know that Louisiana is the third state with the highest percentage of poverty in the country, and yet Louisiana is one of the top two states with the highest sales tax? While some states do not have income tax or sales tax, Louisiana has one of the highest combined sales tax between state and local tax in the whole country with 9.45%. Tennessee has the highest rates with 9.47%.
Want to start your own business but not sure where to begin?
I strongly encourage you to hire a professional to help you with the initial setup when starting your own business, however, if you would prefer to do it yourself here are the steps that I recommend to follow:
1) Decide on the business form. Before you start with the business registration application process, I recommend that you consult with your CPA concerning what business form would be the most beneficial to you for tax and accounting purposes.
2) Apply for an EIN (Employee Identification Number) through the IRS website. There are other ways to obtain an EIN, however, I strongly recommend that you use the IRS website.
3) Register the business with the Secretary of State.
4) Apply for Occupational Licenses with the city.
5) Register the business with LaTap (for Louisiana domiciled businesses) and the parish for sales tax purposes (if you are starting a business where you will be collecting the sales tax).
6) Open a business bank account.
7) Register the business with EFTPS, LaTap & Louisiana Workforce Commission (for Louisiana Domiciled Businesses) for payroll purposes, if you will be hiring employees.
My advice is to always keep personal and business names separate, always operate your business under a different name and tax ID number rather than your own social security number. If you have any questions or need help setting up a business, do not hesitate to give me a shout. Here are the links to all of the sites that you will need to visit to be able to set up the business, in case you decide to do it yourself:
www.irs.gov/businesses
www.geauxbiz.sos.la.gov
www.shreveportla.gov
www.latap.revenue.louisiana.gov
www.eftps.gov
www.laworks.net
Importance of keeping business and personal funds separate
It is very important to keep your business and personal funds separate. People often comingle funds and "pierce the corporate vail" which exposes them to be personally liable for actions that were done under their business name which was created possibly as a Limited Liability Company (LLC). Therefore, what is the purpose of having an LLC? You want to stay away from paying for personal expenses out of business bank accounts and vice versa. In addition, if you commingle funds it makes it harder for you and your tax preparer to prepare accurate books for the business and to distinguish what expenses are personal and what expenses are business. Imagine if all the transactions on your businesses bank statements were business related how much less time your bookkeeper or CPA would spend on your books or your business tax return preparation? From my experience a lot of time is spent exchanging e-mails and phone calls with the clients, only trying to confirm if Dillard or JC Penny charges were truly a business expense. We want to serve you better, and I am sure you do not want to pay a high tax return preparation fee, so help us so that we can help you.
Around the World
Bosnia & Herzegovina my Home Country
Did you know that WWI started in Bosnia and Herzegovina? WWI started with the assassination of Austrian archduke Franz Ferdinand in June 1914 in Sarajevo, now the capital of Bosnia. The picture of the bridge where assassination happened is above. Bosnia is a small country located in a South East part of Europe with total population of about 3.5 million people. Bosnia is a beautiful country full of friendly people, good moonshine, and tasty food. There is no place you go without being offered a meal and good homemade moonshine. Below is a link where you can watch a short video about the beautiful nature of Bosnia and also get introduced to a different culture. It does not matter where I go, I always carry my heritage with me; you will never be hungry or thirsty in my house.
P.S. If you are looking for a CPA who will save you more time and money than they cost you, here are two ways we can get started:
1.Join my newsletter: current news from world of accounting & tax will be shared that you and your business can benefit from.
2.Work with me privately: Feel free to reach out to me and we can schedule a meeting to see what value I can bring to the table for you. My e-mail is: dragana@dcmtax.com