Author: Janet Behm (155 articles found) - Clear Search


Provisions of the Second Coronavirus Relief Bill That Affect Small Businesses

0
Comments

 

"What would you attempt to do if you knew you could not fail?” -Robert Schuller

The passage of this relief bill brought some changes that we had been hoping to see for months (notably the deductibility of PPP-related expenses), but there is much more to this relief bill than merely that, and the $600 stimulus payments that get all of the press.

So I thought I'd delve a little deeper than I did last week on the high points of this CAA bill.

Eviction Relief
This new measure extends the moratorium on evictions under the CARES Act, designed to protect renters from eviction, until January 31, 2021. That means, if you are a renter, you have one more month to get right. For landlords, you need to know that you will have to wait one more month.

PPP-Related Provisions
As I mentioned, businesses are now allowed to deduct expenses associated with their forgiven PPP loans -- this is amazing news.

Further, the new law provides $284.45 billion to reopen and strengthen PPP for first and second time borrowers and reauthorizes the program through March 31, 2021. However, the requirement in order to receive a second PPP is that the small business has less than 300 employees and can demonstrate a revenue reduction of 25 percent.
Read More...





Last of the LAST Minute Tax Moves

0
Comments

 

“Every task, goal, race and year comes to an end…therefore, make it a habit to FINISH STRONG.” - Gary Ryan Blair

As I mentioned, time is short, and some moves do require more than this week to pull off -- so I'm restricting myself to those items which you can realistically do something with before the end of the year.

And, again--these are focused on what will apply to your business

Also, the fact that expenses paid via PPP loan proceeds are now deductible might affect these calculations for you.

1) Buy Supplies in Advance (to increase expenses and offset income)
How much disposable equipment do you expect to use in 2021? Order it now so the cost is deductible in 2020 if you need to offset income. Buy what you think you'll need for the coming year, as long as you have the space to store it. This is especially easy to do with software, information courses, or other subscriptions that you know you want to keep.

A word of caution: Under a 12-month rule, you cannot deduct prepaid expenses that run more than the end of the year following the current year. For example, if you prepay a three-year subscription to a trade journal, the cost is deductible over three years (not just one).
Read More...




Janet Behm's Annual Holiday Prayer 2020

0
Comments

 

"People travel to wonder at the height of the mountains, at the huge waves of the seas, at the long course of the rivers, at the vast compass of the ocean, at the circular motion of the stars, and yet they pass by themselves without wondering." -St. Augustine

"Help us remember that the jerk who cut us off in traffic last night is a single mother who worked nine hours that day and is rushing home to cook dinner, help with homework, do the laundry and spend a few precious moments with her children.

"Help us to remember that the pierced, tattooed, disinterested young man who can't make change correctly is a worried 19-year-old college student, balancing his apprehension over final exams with his fear of not getting his student loans for next semester.

"Remind us that the scary-looking bum, begging for money in the same spot every day (who really ought to get a job!) is a slave to addictions that we can only imagine in our worst nightmares ...

"Help us to remember that the old couple walking annoyingly slowly through the store aisles and blocking our shopping progress are savoring this moment, knowing that, based on the biopsy report she got back last week, this will be the last year that they go shopping together.
Read More...



Janet Behm's Annual Holiday Prayer

0
Comments

 

"People travel to wonder at the height of the mountains, at the huge waves of the seas, at the long course of the rivers, at the vast compass of the ocean, at the circular motion of the stars, and yet they pass by themselves without wondering." -St. Augustine

"Help us remember that the jerk who cut us off in traffic last night is a single mother who worked nine hours that day and is rushing home to cook dinner, help with homework, do the laundry and spend a few precious moments with her children.

"Help us to remember that the pierced, tattooed, disinterested young man who can't make change correctly is a worried 19-year-old college student, balancing his apprehension over final exams with his fear of not getting his student loans for next semester.

"Remind us that the scary-looking bum, begging for money in the same spot every day (who really ought to get a job!) is a slave to addictions that we can only imagine in our worst nightmares ...

"Help us to remember that the old couple walking annoyingly slowly through the store aisles and blocking our shopping progress are savoring this moment, knowing that, based on the biopsy report she got back last week, this will be the last year that they go shopping together.
Read More...



Behm's Guide To Getting Tasks Done

0
Comments

 

“Time is too slow for those who wait, too swift for those who fear, too long for those who grieve, too short for those who rejoice, but for those who love, time is eternity.” -Henry van Dyke

I've discovered a few tricks when it comes to getting tasks done through the day -- and managing others who do so. Here are some little tactics I've found to be helpful: 

Turn off cell phone alerts.
Resist the temptation to stop what you're doing every time your phone beeps with a new message. You'll be better able to focus on tasks when you're not constantly distracted and interrupted.

Fine-tune your to-do list.
When planning your day, add estimated times to each item on your to-do list. This will help you decide what to do first and what can be saved for later.

Run two-minute drills.
Every few hours, look at your list for tasks that can be done quickly--answering emails and phone calls, confirming appointments, and the like. Spend a few minutes clearing those away, and you'll have more blocks of uninterrupted time to take on bigger tasks.

Take regular breaks.
You'll burn out if you go full throttle for eight or 10 hours. Determine how long you can effectively concentrate on a single task (usually between 30 minutes and an hour, for most people). Take a break after that time--walk around, get out of the building, talk to coworkers--and you'll return feeling refreshed.
Read More...







12 Year-End Todos...

0
Comments

 

2021 is hurtling at us, isn't it? May it ever come sooner.

Well, except for this part:

I'm here to remind you to plan now for how to best position your income, assets, and other revenues for the most favorable tax positions possible.

Let's make some tax-smart moves before 2020 comes to a close.

Here's one not many people are talking about: tax-deductible, employer-paid student loan payments.

Hidden within the CARES Act was this gem: employers can pay up to $5,250 to employees as student loan repayment assistance and it will not be taxable income to the employee. Employers can ALSO deduct the amount and not pay federal payroll taxes on the payments.

So if you're an "employee" of your own a business, and you have outstanding student loans, here's what to do:

  1. Make a written plan (there are some provisos here -- more in a moment)
  2. Make a payment to your student loans up to $5,250
  3. If you’ve previously made a payment, cut a "reimbursement" check to yourself
  4. Deduct it as a benefit expense

Done.
Read More...



Good News Depends On Where The Fence Is

0
Comments

 

There's both good news (for some) and bad news (for many) as we round the corner into December.

And I'm not talking about our culture, or politics, or sports, or anything like that.

I'm talking about TAXES.

I'll start with the good news. This is applicable to some of my readers only, but it is nice news for business owners in certain high tax states.

One of the difficult aspects of the TCJA was the "SALT" (state and local tax) deduction limitations. Specifically, in high-tax states, this represented a difficult setback in what could be deducted.

Well, one semi-sneaky way around this limitation has just been tentatively approved by the IRS in Notice 2020-75: paying these taxes on behalf of the owner or partners through an S-corp or partnership (pass through entity), and enabling them to be counted as a business expense.

This workaround immediately came into effect in MD, LA, CT, NJ, OK, RI and WI. Four more states already have legislation on the dockets: AL, AR, MI and MN. And (perhaps not surprisingly), NY and CA -- the two biggest states in this category -- are expected to act quickly.
Read More...



Wholesaling for Beginners #5

0
Comments

 

While we’ve only covered the basics of wholesaling (and there are A LOT MORE ISSUES to understand), you’re well on your way to completing your first wholesale deal. The easiest way to wholesale is to just assign the contract. It’s clean and simple and doesn’t cost anything or require any other documents.

But, if you’re working with bank, like REO properties and short sales, they will not allow you to assign the REPC. Some sellers and agents also that won’t allow you to assign the contract because they may think it’s somehow fraudulent. Or, maybe you’re looking for more privacy in your transactions. Then you many want to consider using a disposable LLC or real estate trust.

When you assign a contract, the named buyer actually changes, so the bank and seller will see that at the closing table. But using a disposable LLC or trust as your initial buyer (on the initial REPC you sign with the seller) will allow you to pass on the right to buy the property WITHOUT changing the named buyer.

The process is similar. But first, you set up either an LLC that will be used just for this deal or a real estate trust. Next, you name that LLC or trust as the buyer on your REPC with the seller. Then, instead of assigning the contract from you to another buyer, you “sell” that LLC or trust to your final buyer. Once your buyer “owns” that LLC or trust, they have the right to buy the house because that LLC or trust IS the buyer on the REPC. Your assignment fee then become the “sales price” of that LLC or Trust and is listed on that form. The only thing that’s changed is who owns these entities, which is done behind the scenes.
Read More...



Wholesaling for Beginners #4

0
Comments

 

This is our fourth blog on beginning wholesaling. If you haven’t read the earlier ones, make sure you go back and do so.

Before you start out on your first wholesale deal, there are some things that you should take into consideration. First is privacy. We touched on this in our last blog: keeping your wholesaling fee and final buyer private. Many wholesalers will use trusts for privacy purposes. We’ll discuss this more in the next blog.

You should also be aware of seasoning issues. FHA loans and some other lenders will look at title transfers occurring within three months before a retail sale (your post-flip sale). This could affect things if you do a double close (more on that below). If they see a couple of title transfers close together, they could ask questions or delay loan approval until the property has been in one owner’s name a certain length of time.

Also understand that your wholesale fee is an “add on” fee that your buyer will pay at closing, like paying an invoice. It is NOT an increase in the purchase price because that will also affect the price the seller is getting. This is a common mistake on the assignment part of a wholesale deal. Yes, the fee increases the “cost” to your buyer, but it doesn’t change the purchase price of the house.
Read More...



8 Important Steps for HOA & Other Non-Profits Before Year-End

0
Comments

 

"Fear has a large shadow, but he himself is small.” -Ruth Gendler

When the dust settles on this year, chances are good that there will be a bunch of non-profits who have had to close their doors. Between lockdowns, massive unemployment, and general decreases in charitable deductions ... it's not easy out there.

Which is why it would be very wise for you to get "ahead of the game" if you are one of these organizations.

So, to do so, I suggest that you put these items on your "list" before Thanksgiving, so you're not caught in the flurry of holiday madness and year-end. Yes, we're already halfway through November...!

  1. Have your staff update tax withholdings.
    Nobody likes to get hit with a big tax bill in April, or be unnecessarily "loaning" money to the US Treasury. Encourage your team to check on their withholdings and adjust as needed.
  2. Get info for any individuals/contractors to whom you paid more than $600. 
    You'll need to file a 1099 for any individual or contractor that you paid more than $600. Remember, professional fees of $600 also require a 1099, even if they are a corporation.

If you don't have their W-9, ask for it now.
Read More...