Income Taxes Changes For 2020 Tax Returns

And A Few Things to Cheer About Below are some of the changes to expect in your 2020 tax returns. Except for the increases in the standard deduction, all were the result of Federal legislation drafted and passed in 2020 designed to keep the economy afloat during the COVID pandemic. And all were favorable to us as taxpayers. Even in such a year as challenging as 2020, that’s a little something to cheer about. BUSINESS TAX Deductibility of Expenses Related to PPP Loans. Congress stepped in the latter part of December 2020 and corrected an oversight they made in the Read More »

Sensitive Areas Of A Construction Company Audit

Or — Things That Make You Go “Humph” The majority of construction companies are private entities closely held by a small group of owners engaged in management. Many owners/managers began the company from scratch and remain active in the company’s day-to-day operations. While very competent in their chosen trade, many are not as comfortable or interested in the accounting related to their construction activities, except for tax savings and strategic planning. Some construction companies choose to have an annual financial audit. However, most have an audit because it is required by the company’s surety, banker, or a governmental entity. Therefore, Read More »

Five Myths About Accounting

The Bob Cratchit Stigma Accounting is all about math. Is it? Little could be further from the truth. Do you recall the math courses you took in school; calculus, geometry, algebra, and trigonometry? They gave me nightmares. But accounting somehow made sense. When it comes to the number part of accounting, it’s more addition, subtraction, multiplication, and division. Those are not advanced mathematical topics. It’s more arithmetic than high-level math. Accounting is about concepts and principles, analytics and organization, simplifying complex situations, clarity, and concise communication. True, it may borrow from statistics in certain areas, such as selecting sample sizes Read More »

Paycheck Protection Program

The Art of Accounting Our FAQ section briefly describes possible approaches to account for loans received under the Paycheck Protection Program (“PPP”). This article will go into a bit more depth. To address the economic issues caused by the COVID-19 pandemic, the CARES Act, signed into law on March 27, 2020, established the PPP to provide loans to qualifying businesses to pay up to 8 weeks of certain qualifying expenses. The PPP Flexibility Act, signed June 5, 2020, extended the pay period to 24 weeks. Qualifying expenses include payroll costs, including benefits, mortgage interest, rent, and utilities. The SBA administers Read More »

The Good Liability?

The Upside Down If you are a fan of the popular Netflix science fiction horror series Stranger Things, then you are familiar with The Upside Down. For those who are not acquainted with the series, The Upside Down could be described as an alternate parallel dimension that is not too human friendly, to say the least. The world of construction accounting is viewed by many as somewhat of an upside-down, with a strange language consisting of such terms as POC, under billings, overbillings, ASC 606, phase codes, related parties and, worst of all, though certainly not unfamiliar, income tax. The Read More »
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