Small Business Archives - CironeFriedberg, LLP

EIDL Borrowers Receive Additional Six-Month Deferment

March 17, 2022 by David Moseman CPA

On March 15, 2022, Administrator Isabella Casillas Guzman, head of the U.S. Small Business Administration directed the U.S. Small Business Administration (SBA) to provide additional deferment of principal and interest payments for existing COVID Economic Injury Disaster Loan (EIDL) program borrowers. This will provide a total of 30 months deferment from inception on all approved COVID EIDL loans.

This is the third time in the past 12 months that the SBA has extended the deferment period for the COVID EIDL loans.

The SBA intends this deferment period to provide additional flexibility to small business owners impacted by the pandemic, especially those in hard-hit sectors managing disruption with recent variants, as well as recent supply chain and inflation challenges amid a growing economic recovery.

Read the SBA press release for more information.

Cyberattacks Accelerate and Target Excel Users

February 24, 2022 by Teri Pough

According to Check Point, in the last quarter of 2021 there were over 900 weekly cyber-attacks per organization recorded. In 2021, there was a 50% increase in overall attacks per week on corporate networks compared to the previous year.

The Journal of Accountancy recently published an article on the alarming rise in cyberattacks occurring in the last three months of 2021 related to Microsoft Excel. The article cited the Q4 2021 Threat Insights Report from HP Wolf Security, which detected a 588% rise in campaigns using malicious Microsoft Excel add-in (XLL) files intended to infect computer systems. This is particularly alarming, as this number reflects an increase compared only to the previous three months.

Cyberattacks using malicious add-in files were deployed through emails with .XLL attachments or links. When the recipient opened the attachment or link, they were prompted to install the Excel add-in. Just one click activated the malicious malware.

The Threat Insights Report recommends three steps each organization can take to protect themselves for these Excel attacks:

Configure email gateway to block inbound emails containing XLL attachments
Configure Microsoft Excel to permit add-ins only by trusted publishers
Configure Microsoft Excel to disable add-ins

Cyberattacks can disrupt operations and put the finances and data of businesses at risk. For more information on this topic, see the reference links below.

If you need assistance or have any questions on the information in this article, please call your CironeFriedberg professional. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford) or email us at info@cironefriedberg.com.

S Corporations Required to Report Health Insurance Premiums

December 5, 2021 by Adam O'Feeney CPA

In many cases, employees are able to exclude the value of fringe benefits provided by employers, and the employer is able to deduct the cost of providing these benefits. However, when the employer is an S Corporation some special rules apply.

Health and accident insurance premiums paid on behalf of a greater than 2% S Corporation shareholder employee are deductible by the S corporation and reportable as wages on the shareholder-employee’s Form W-2, subject to income tax withholding. (A 2% shareholder is someone who owns more than 2% of the outstanding stock of the corporation or 2% or more of the voting power of all stock of the corporation.)

However, these additional wages are not subject to Social Security or Medicare (FICA), or Unemployment (FUTA) taxes if the payments of the premiums are made to or on behalf of an employee under a plan or system that makes provision for all or a class of employees (or employees and their dependents.) Therefore, the additional compensation is included in the shareholder-employee’s Box 1 (Wages) of Form W-2, Wage and Tax Statement, but is not included in Boxes 3 and 5 of Form W-2.

A 2% shareholder-employee is eligible for an above-the-line deduction in arriving at Adjusted Gross Income (AGI) for amounts paid during the year for medical care premiums if the medical care coverage was established by the S Corporation and the shareholder met the other self-employed medical insurance deduction requirements. If, however, the shareholder could be covered under a subsidized health care plan of the shareholder or shareholder’s spouse, then the shareholder is not entitled to the above-the-line deduction.

SBA Clarifies COVID-19 EIDL Application Deadlines

November 28, 2021 by David Moseman CPA

On Friday, November 19, 2021, the U.S. Small Business Administration (SBA) released updated guidance regarding applications for loans, advances, and appeal requests with the COVID-19 Economic Injury Disaster Loans (EIDL) program.

While the December 31 deadline remains in place, the SBA strongly recommends that businesses seeking a Supplemental Targeted Advance submit their application no later than December 10, 2021. The agency cannot continue to process Supplemental Targeted Advance applications after December 31, which means that applications received close to that date might not complete the review process in time.

In contrast, EIDL and Targeted EIDL Advance applications received by December 31 will continue to be processed after that date until all funds are exhausted. The SBA will accept and review reconsideration and appeal requests received on or before December 31, provided that the reconsideration or appeal is received within six months from the date of decline for reconsiderations and 30 days from the date of reconsideration decline for appeals — provided funding is still available. The COVID-19 EIDL programs are designed to provide funding access to small businesses hurt economically during the COVID-19 pandemic:

COVID-19 EIDL loans have a 30-year term with fixed interest rates of 3.75% for small businesses, including sole proprietors and independent contractors, and 2.75% for not-for-profits. Loan payments are deferred for the first two years, though interest will accrue. Payments on interest and principal will then take place over the final 28 years of the loan. Loan proceeds can be used for any normal operating expenses and working capital, including payroll, purchasing equipment, and paying debt.
A Targeted EIDL Advance of up to $10,000 is available to businesses that are located in low-income communities, have 300 or fewer employees, and suffered a revenue loss of more than 30% due to COVID-19.
A Supplemental Targeted Advance is available to Targeted EIDL Advance recipients that have 10 or fewer employees and saw revenues drop at least 50% due to COVID-19. The cap on the advance is $5,000, meaning that businesses face a total cap of $15,000 if they receive both types of advance grants. Neither of the advance grants needs to be repaid.

The guidance issued by the SBA comes shortly after the agency announced major modifications to the EIDL program designed to make the money more accessible to more businesses. The most significant change was raising the cap on EIDL loans from $500,000 to $2 million.

Refund Opportunity for Businesses that Accepted Visa and MasterCard Payments

August 15, 2021 by Teri Pough

In the largest class-action settlement in U.S. history, MasterCard and Visa have agreed to refund between $5.54 and $6.24 billion to businesses that accepted their cards between January 1, 2004 and January 25, 2019.

The lawsuit claims that Visa, MasterCard and their member banks violated antitrust laws by imposing and enforcing rules limiting competition or incentives that might have reduced interchange fees. As a result, businesses accepting these credit and debit cards for payment were forced to pay excessive fees.

Refunds are not automatic. To be eligible you must submit a claim for the full amount you collected during that period, and for which you have credit or debit card receipts. If you are not sure whether you are part of this settlement, you can contact the Class Administrator at 1-800-625-6440. For complete details about the settlement and submit a claim, visit the official court-authorized settlement website at paymentcardsettlement.com.

If you have any questions on the information in this article, please call your CironeFriedberg professional. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford/Darien), or email us at info@cironefriedberg.com.

Why You Need Accurate Monthly Financials

July 18, 2021 by Teri Pough

Monthly financial reporting helps owners, managers and potential lenders get a better understanding of a company’s current and future financial status. You can see financial trends when you examine daily, weekly and monthly financial reports. You’ll be able to manage long-term profitability by improving internal business performance while staying updated on significant progress or changes in your financial status and cash flow.

These reports help you determine:

Whether you can effectively generate cash flow and where that cash can be used.
Specific details of a business transaction.
Potential issues that may be hurting or helping your profitability.
Whether you can pay off debts.
Financial ratios that show your financial position.

Financial reports are easier to make sense of when you get them in a visual way that is more digestible. Interactive dashboards help you:

Make predictions based on accurate data.
Effectively plan out your budget.
Track your revenue, expenses and profitability.
Improve the performance of your processes.
Create clear, accurate reports.

Many business owners want to be updated not monthly but weekly or even daily to ensure an accurate representation of the business’s finances. Accounting software can help you create dynamic reports to assist you in updating cash flow statements.

What other financial documents should you be checking?

The sales forecast. Create a spreadsheet projecting sales over the course of three years. Put in sections for different types of sales and create an estimation of what you believe your firm will sell, including pricing and cost of sales. A sales forecast will help you determine whether you’re on track to meet your company goals.
The financial budget. How much will it cost to make sales? Consider everything from payroll, rent, advertising and promotional expenses to your interest and taxes. Even though these numbers will be estimates, you’ll be able to make your financial budget more accurate over time.

The creation and examination of financial statements help you get a snapshot of your firm’s financial health. Immersing yourself in financial statements will probably seem daunting, but it’s the best way for you to understand how money flows in and out of your business so you can gain the context you need to ask the right questions and make the best decisions. You also want to provide the correct answers to possible investors and other stakeholders.

We provide Outsourced Controller and Chief Financial Officer (CFO) services to clients who need high level accounting and financial support but do not need to add a full time resource to their payroll right now. Learn more about this service.

The professionals at CironeFriedberg can help you understand how to create these financial statements and establish a protocol for accurate documents to become the foundation for making future business decisions. Call us for more information at 203-798-2721 (Bethel), 203-366-5876 (Shelton), or 203-359-1100 (Stamford), or email us at info@cironefriedberg.com.

EIDL Borrowers Receive Additional Six-Month Deferment

Cyberattacks Accelerate and Target Excel Users

S Corporations Required to Report Health Insurance Premiums

SBA Clarifies COVID-19 EIDL Application Deadlines

Refund Opportunity for Businesses that Accepted Visa and MasterCard Payments

Why You Need Accurate Monthly Financials

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