Category: News

Information about the Senate CARES Bill

Bipartisan legislation has been recently unveiled to provide emergency relief to many people. At KMA, we’re closely monitoring the terms of this legislation as it relates to our clients. We’re also able to help your business complete all the necessary paperwork to apply for this assistance. Read the full article here.

Key takeaways

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is expected to be passed and signed into law today, Friday March 27th. The small-business section of the CARES Act will:

  • Create the Paycheck Protection Program, a nearly $350 billion program to provide eight weeks of cash-flow assistance to small businesses through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would largely be forgiven, which would help workers to remain employed and affected small businesses and our economy to quickly snap-back after the crisis.
  • Allow the Paycheck Protection Program to cover payroll costs, paid sick leave, supply chain disruptions, employee salaries, health insurance premiums, mortgage payments, and other debt obligations to provide immediate access to capital for small businesses who have been impacted by COVID-19.
  • Provide $265 million for grants to offer counseling, training, and related assistance to small businesses affected by COVID-19 to SBA resource partners, including Small Business Development Centers and Women’s Business Centers and $10 million for the Minority Business Development Agency’s Minority Business Centers and Minority Chambers of Commerce.
  • Allow for expedited access to capital by establishing a $10 billion program for small businesses who have applied for an EIDL loan to request an advance of up to $10,000 on the loan to provide paid sick leave to employees, maintaining payroll, and other debt obligations.
  • Require SBA to pay all principal, interest and fees on all new and existing SBA loan products including 7(a), Community Advantage, 504, and Microloan programs for 6 months, and provides $17 billion for this purpose.

We are available to answer any questions during this unprecedented time and to assist with loan applications for the Paycheck Protection Program. Please email your client relationship manager today so that we can send you an engagement letter and start the process.

Contact us today to learn more.

KMA Monitoring Covid-19 and its Impact

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KMA  is closely monitoring the COVID-19 pandemic and its impact on our clients’ businesses. During this time, we will continue to provide resources and information to help you and your workforce navigate these unprecedented times.

To start, here are a few helpful resources:

Need other resources? Visit https://www.payrollpluswi.com. We will do our best to keep you up-to-date as the COVID-19 situation continues to unfold.

Stay healthy and let us know if there’s any way we can support you!

Learn about the Small Business Administration Economic Injury Disaster Loan

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The Small Business Administration (SBA) has added the State of Wisconsin as an Eligible Disaster Area.  This provides the opportunity for small businesses to apply for an SBA Disaster Loan during this time of economic injury. Find more information about whether you qualify for the loan and what types of terms are available as well as how KMA can assist you in securing these funds.

SBA’s Economic Injury Disaster Loan

  • These loans are available for small businesses, small agricultural cooperatives, small aquaculture businesses and most private non-profit organizations
    • Some businesses that are NOT eligible are: agricultural enterprises, religious organizations, charitable organizations, casinos, racetracks, and real estate developers
  • The businesses can qualify for loans up to $2 million with interest rates at 3.75% (2.75% for nonprofit organizations) with terms up to 30 years.
    • The funds are to be used for working capital and not to refinance existing debt
    • The SBA loan officer will determine the approved amount and loan terms upon approval of the application
  • Any loans over $25,000 will require collateral
    • SBA takes real estate as collateral when available
    • They will not decline a loan for a lack of collateral but will require borrowers to pledge what is available
  • There is no cost to apply, no obligation to take the loan if approved, and no prepayment penalty
  • There is personal guarantee regardless of the amount of the loan
  • The borrower has the opportunity to defer payments for up to 12 months
    • Interest will accrue at the beginning of the loan
  • Processing time typically takes 3-4 weeks from accepted application to money in the bank
    • The typical decision time is 21 days
    • When the decision is made on the amount and terms, paperwork is sent to you for signature
    • When the signed paperwork is received the funds are directly deposited into your checking account typically within 2-3 business days
  • If you are interested in applying, we recommend to complete the applications as soon as possible. The 3-4 week turn around will likely extend in response to the size of the pipeline.  You can determine at the time of approval if you’d like to accept the loan.

The cost for KMA to aid with the application process will be at a discounted rate of $175/hour. Please reach out to Charissa Schulte, KMA Accounting Manager, directly to get the process started at charissa.schulte@cpakma.com.

 

What to Know About the Families First Coronavirus Response Act

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The US Treasury Department, Internal Revenue Service (IRS), and the US Department of Labor have announced the availability of two new refundable payroll tax credits for small to midsize employers.  These payroll tax credits are designed to reimburse employers 100% of paid leave to their employees pursuant to the Families First Coronavirus Response Act signed by President Trump on March 18, 2020. This takes effect on April 2, 2020. We have summarized some of the information on the act from the IRS website, more information can also be found on the IRS website through the direct link:

Families First Coronavirus Response Act – Payroll Tax Credits

Key Takeaways

Paid Sick Leave for Workers

For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid childcare leave when employees’ children’s schools are closed or child care providers are unavailable.

Complete Coverage

Employers receive 100% reimbursement for paid leave pursuant to the Act.

  • Health insurance costs are also included in the credit.
  • Employers face no payroll tax liability.
  • Self-employed individuals receive an equivalent credit.

Fast Funds

Reimbursement will be quick and easy to obtain.

  • An immediate dollar-for-dollar tax offset against payroll taxes will be provided
  • Where a refund is owed, the IRS will send the refund as quickly as possible.

Small Business Protection

Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or childcare is unavailable in cases where the viability of the business is threatened.

Easing Compliance

Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.

Background

The Act provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the refundable paid sick leave credit and the paid childcare leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.

Paid Leave

Employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis.

An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay.

An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee’s pay.

Paid Sick Leave Credit

For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.

For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Child Care Leave Credit

In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or childcare facility is closed or whose childcare provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the childcare leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Prompt Payment for the Cost of Providing Leave

When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.

Under guidance that will be released next week, eligible employers who pay qualifying sick or childcare leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and childcare leave that they paid, rather than deposit them with the IRS.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and childcare leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.

Examples

If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.

If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

Equivalent childcare leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.

Small Business Exemption

Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or childcare unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.

Non-Enforcement Period

Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.

For More Information

For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov. Information regarding the process to receive an advance payment of the credit will be posted next week.

Bookkeeper or Accountant: Which Do You Need?

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The general misconception about working with business financials is that bookkeeping and accounting are two titles for the same job. While they might look the same, a closer look reveals some very important differences. Here are the major distinctions between these two necessary aspects of business.

In the Details

Bookkeepers are professionals that focus on the day-to-day operations of a business or institution. They organize data, allowing it to be easily tracked and referenced while also preparing tax documents and other financial statements. Their job is to know the intricacies of cash flow within your organization.

An accountant may have all of the responsibilities of a bookkeeper, but additionally has the training and expertise to analyze that data, making predictions and recommendations by identifying trends. He or she also establishes the methods used by a particular business to track financials, essentially laying out the rules that bookkeepers within the organization have to follow.

The Right Tools

If accountants do all of the jobs that bookkeepers can, why not only employ accountants? Bookkeeping has its place within a business, and having an employee dedicated to the meticulous tracking of financial data is essential. They will be the person you go to for checking facts and figures, making sure the business runs smoothly every day.

While accountants reference this data, their skills are mainly employed to advise board members, CEOs and CFOs on major and minor fiscal conclusions. By analyzing a bookkeeper’s data they can run reports and create forecasts allowing those running the business to make informed decisions

Utilizing the skills of bookkeepers and accountants in your organization will make sure you’re prepared for any present or future financial situations that might arise. For more information on the differences between bookkeepers and accountants, contact KMA today. Our expert team is ready to provide consultation services and help you manage your fiscal data. Get your financials on the right track with KMA!

Four Reasons Why You Need a Bookkeeper

accounting bookkeeping madison wi

Everyone knows all businesses need to keep track of their financials. If you’re operating a small business that already employs an accountant or have been taking care of bookkeeping alone, you’re putting yourself at a disadvantage. Here are a few reasons why hiring a dedicated bookkeeper helps keep your company on top of its financials.

1. A Focused Professional

Knowing how business finance works is essential for helping it run efficiently. By employing a dedicated bookkeeper, you’ll have a member of your staff that is dedicated to understanding how the fiscal side of your organization is run. From cash flow to marketing, you’ll have someone who understands how all of the pieces fit together.

2. Healthy Reporting

An accountant is only as good as the data available. With a bookkeeper on hand, financial information is prepared on a day-to-day basis, allowing you access to regular reports on business health. This information can then be relayed to your accountant for analysis, allowing you to make the most informed decisions possible.

3. The Tax Man Cometh

Only two things may be certain, and a good bookkeeper will make sure you’re prepared for at least one of them. Getting ready for tax time can be a harrowing experience, but bookkeepers take some of the pressure off by having all of the data on hand and ready at their fingertips.

4. Audit Auditions

If your business finds itself on the wrong end of an audit, excellent bookkeeping is a lifesaver. Someone intimately knowledgeable of your organization’s financial workings becomes invaluable in providing auditors exactly what they need, making things run that much more smoothly.

Employing a bookkeeper does a lot to both keep you informed of your organizational health and ensure the financial data available is prepared for whatever might happen in the future. To learn more about how essential excellent bookkeeping is to any business, contact KMA today.

Examples of Tax Planning That Are Simple and Often Used in Tax Filing

Nobody likes paying taxes. One way to pay less tax is to earn less money, though that isn’t fun either. Fortunately, a better strategy is to engage in tax planning in Madison, WI, which will both reduce and delay your taxes. Check out these examples of tax planning that you should study.

Working From Home Isn’t Just Fun – It Can Save You Money

It seems as if most people would rather work from home than be required to commute to their employer’s formal place of work. Whether you can work from home just some or even all of the time, you can report home office expenses that can be deducted from your taxable income. If you have a choice between the two, work from home more often so you can deduct things like home maintenance, utility bills, rent, mortgage, and property taxes on your personal tax return.

Own Many Investments? Don’t Actively Trade Them

Many people own investments. If you hold them for at least a year before selling them, they’re taxed at 0%, 15% or 20%, which are lower brackets than regular income. Short-term holdings get taxed at regular, higher tax rates. A good strategy often exercised by professionals in tax planning in Madison, WI, is to never sell investments that have earned money and been held for less than one year.

Retirement Accounts Work Wonders

Individual retirement accounts (IRA) often don’t earn as much interest as well-placed investments not placed in IRAs. However, IRAs aren’t taxed until money is removed from them. If you put this off until retirement – you’ll be penalized if you don’t do this – you will get taxed at a lower marginal rate, considering that most retired folks earn a lot less than when they were working full-time. We’re full of great strategies for tax planning in Madison, WI, here at KMA . “Don’t sweat the stressors of tax season” – that’s our motto here at KMA , where we work tirelessly for you.

What Is a Certified Public Accountant?

certified public accountant madison wi

Perhaps you already know what accounting entails. Generally speaking, it involves maintaining the general ledger of a business or organization, preparing financial statements, and performing tax work for individuals and/or businesses. Anyone who provides such services, whether as the employee of a company or as an independent contractor, can be considered an accountant.

However, an accountant can only use the designation of a certified public accountant after he or she has earned the credential from the American Institute of Certified Public Accountants. When you work with a CPA, you know that the person you’re working with has met or exceeded certain professional standards of experience, education, and ethics.

What Is Involved in Becoming a CPA?

Before a person can become a CPA, there are three different accomplishments he or she has to attain:

  • Education: Earning a bachelor’s degree or better in accounting, business administration, or finance
  • Experience: Working as a public accountant for two years or more
  • Exam: Passing score on the Uniform CPA Examination

The Uniform CPA Examination is intentionally challenging to ensure that only the most qualified candidates pass.

Upon becoming a CPA, continuing education is necessary to maintain the credential. A certified public accountant has to take continuing education classes on an annual basis and earn a certain number of credits every year.

As CPAs, we are expected to adhere to a code of ethics that governs our professional behavior. The code is issued by the AICPA and undergoes constant revision, but it basically identifies acts that are discreditable to our profession, as well as outlining responsibilities to clients and establishing standards for objectivity and integrity.

What Does a CPA Do?

CPAs can serve a wide range of clients, including businesses, non-profit organizations, governments, or individuals. However, at KMA Bodilly, most of our focus is on business accounting, which means that our services fall into four main categories:

  • Accounting
  • Attestation
  • Consulting
  • Tax Services

At KMA, we often function for our clients in much the same way that an in-house Chief Financial Officer would, handling day-to-day operational tasks like filing payroll taxes, monitoring cash flow, providing monthly reports, and preparing financial statements. We provide dependable attestation services to give accurate reports of financial data to state and federal entities, as well as key stakeholders. As consultants, we guide our clients in regard to strategic planning, business valuation, and business succession planning, and we can help to plan and prepare your taxes so that you pay as little as possible while adhering to applicable tax laws. This is just a brief overview of the services we provide at KMA. Contact us today, and we can explain the options available to you in more detail.

Convincing Reasons to Hire a CPA to Better Manage Your Company’s Finances

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When you are busy running your company each day, you sometimes do not have a lot of time to take care of your books. The everyday tasks that go on in your business demand your attention and at the end of the day, you may be in no mood to balance your books.

Neglecting them leaves you in the proverbial dark about how much money you have coming in and going out of your business. By hiring an accountant who specializes in audit services in Madison, WI, you can have your books organized and updated without having to devote time to this job yourself.

Figuring Out Where Money Goes

If it seems that you are always short on cash at the end of the week or month, you have to figure out where it is going. When you hire professionals who provide audit services in Madison, WI, you can have an objective third-party accountant come in and discover what you are spending your money on the most.

The accountant can also uncover incidences of fraud that could potentially rob your business of thousands of dollars each month. With this third party vendor help, you can better control your expenditures, figure out if your spending is out of budget, and cut back on expenses that are robbing you of your cash flow.

Tax Prep Services

The federal government requires you to pay your taxes on a quarterly basis. Your accountant can fill out and submit the proper returns for you. He or she will tell you what your tax bill is so that you can write a check and mail it to the IRS.

A professional accountant who specializes in audit services in Madison, WI, can help you manage your business’s finances. You can outsource tasks like your bookkeeping, manage your expenses, and filing your taxes each quarter.