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Are you all advising on the new loans?


NECPA in NEBRASKA

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I have been seeing so many posts online regarding consulting people with loans and making P&Ls for them. I quit preparing financials for clients when they decided that CPAs had to have an in house review for compilations, not just by mail. I don't honestly think that I know enough to advise people on what kind of loan they should be go after. I think that should be up to the bankers. I am going to check with my liabiltiy insurance, but I was just checking to see what everyone else thinks. I don't want to send my clients elsewhere, but none of this is covered in my engagement letters and I don't want to end up advising on things that I am not qualified to do. 

Thanks!

 

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I have a banker who's gotten up to speed on the new SBA loan programs that I've recommended. Some clients have their own friendly, local banker. Their payroll company should be able to help with some of the payroll "deferral" programs. I have lots of tax returns to file.

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This is a rural area with not a lot of financial support.  I don't intend to advise on what they should do,; I may in some cases direct them to websites that they can read to get up to speed themselves.  I would like to know at least enough to warn them of any  tax pitfalls since they do rely on me for that.  Since I do the payroll for some of my clients, I will probably wind up more involved than I want to be. 

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32 minutes ago, Gail in Virginia said:

This is a rural area with not a lot of financial support.  I don't intend to advise on what they should do,; I may in some cases direct them to websites that they can read to get up to speed themselves.  I would like to know at least enough to warn them of any  tax pitfalls since they do rely on me for that.  Since I do the payroll for some of my clients, I will probably wind up more involved than I want to be. 

I am researchingand taking classes about the loans and am happy to tell them what I think the tax ramifications will be. I also prepare payroll and am happy to help them out with payroll numbers. I unfortunately am afraid that some of my small clients won't survive even with the help and it truly sucks.

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Not considering straight loans, only looking at items with reimbursement/forgiveness.  Straight loans are fairly straight forward, with the understand forgiveness may not be part of the process.

It is complicated, especially since there could be several options for a particular business.  The "credit" items, such as via Form 7200, are likely the easiest.  The PPP SBA loan, and potential forgiveness, may be the more lucrative.  Taking the retention credit on the 7200 means you are not eligible for forgiveness on a PPP loan.  Forther complicating is 7200 is also used for partial compensation for fronting the emergency PTO.  (I did see something that excluded WC costs from this compensation, which makes the ePTO very expensive for high WC premium businesses, and the business owner may not realize the ramifications until their WC bill comes biting.)

The retention credit maxes at $5k per employee.

If the business can get through the crisis and can hire most, all, or more FTE equivalent employees by the end of June, PPP loans with possible forgiveness are likely the most lucrative.  Forgiveness covers 8 weeks of "payroll costs" and some other allowable expenses including group health care costs, up to the loan amount.

Personally, I am advising some friends, but have too many customers who advise individually.  Thus my post in the other forum offering to refer to those who are seeking possible referrals for such advice, which would work into tax gigs.  I am hoping most people can get advice from their tax preparer, as that is the person who likely already has the needed numbers, assuming the business owner does not want to handle on their own.

Of past note, Lay offs were a very viable option for certain businesses, as it limited exposure to ePTO costs (unreimbursed such as increased WC, and time spent processing), and provided something for their employees (UI, plus the extra 600 weekly UI add on, and the ability to apply for free medical).  If those who were forced to or choose to lay off can rehire in time, then the PPP loan remains viable.

The one caveat on the PPP loan is if there are employees earning over 100k, as the amount over 100k must be excluded.

I have seen at least one firm (online) which is offering to handle the PPP process front and back end, for a fee.  This may be a viable option for some to use.

The bank handling the PPP loan gets a percentage of the loan as a fee.  "Agents" who help with the loan process can also receive a fee.

I am not really digging any deeper, since I found the best course for my situation already...

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