Business 2020 Year End To Do List
What beautiful fall colors we are experiencing in our area. It certainly helps keep our anxiety levels down during this pandemic. Now that it is November, business owners have some normal and some new year-end tasks to complete.
First thing, you should work with your accountant and bank to fill out the proper Paycheck Protection Program (PPP) loan forgiveness form and submit it to your bank who will review it and if it is correct, then forward the form on to the Small Business Administration (SBA) for its approval.
While there is no automatic forgiveness of PPP loans, the SBA has just published a new version of Form 3508 and 3508EZ called Form 3508S for PPP loans under $50,000. It removes much of the work involved in determining employee pay, number of Full Time Equivalents (FTE), etc. It is much simpler to fill out than even the EZ form. All recipients of the PPP loan must keep the payroll and expense records backing up the forgiveness calculations for at least six years. The SBA may do some spot audits of PPP loan forgiveness calculations in the years ahead.
Next, get your bookkeeping current through October and contact your tax professional to go over the tax estimate calculations for the 2020 tax year. In most cases, business revenue and profits are down and you may be able to send less in estimated tax payments to the IRS and New York State for the fourth quarter due January 15. If your books are behind or need cleaning up, consult with your accounting firm to have them help you get them up-to-date.
As you are getting your books current, keep track of payments of $600 or more to non-corporate independent contractors during the year. Get your W-9 forms together for those payments to support filing Form 1099-MISC with the IRS in January for 2020. If you are lacking completed and signed W-9s, please send the form to those you did business with in 2020.
It is a best practice to have the W-9 filled out and signed by the independent contractor BEFORE you pay them. You do not want to be caught without proper name and tax ID numbers for these 1099 submissions, which can lead to IRS penalties.
While we have experienced severe business operational and financial stress since March of this year, the outlook that we had hoped would happen for this fall does not look good for containing this coronavirus pandemic. It appears the pandemic will continue to cause business disruptions well into 2021. It is important to adapt your business to serve your customers on a remote or distanced basis. It is also important to plan out financing needed with your accountant and financial advisors to continue as a going concern.
Enjoy our remaining fall colors and if you have not already done so, exercise your right to vote!
Peter VanderWoude, MS, CPA, CGMA
EQUUS ADVISORS - Accounting and Tax Professionals