Milikowsky Tax Law’s Post

In the wake of the COVID-19 pandemic, SBA PPP (Paycheck Protection Program) loans offered a lifeline to small businesses. Yet, navigating forgiveness isn't always straightforward. If your client faces a denial, here's the essential guide to understanding the process and ensuring fair treatment. #SmallBizRelief #PPPChallenges

CPAs play a pivotal role in navigating SBA PPP loan forgiveness appeals for their clients. If you're a CPA whose client is facing denial, Milikowsky Tax Law can be your ally. We specialize in guiding small businesses through the appeal process, ensuring accurate representation without overlapping services, as we do not handle tax filings. Partner with us for expert legal support. #CPAPartnership #SBALoanForgiveness #ppp2appeals 

When the COVID-19 pandemic hit, the SBA PPP loans were a lifeline for small businesses. But what happens when loan forgiveness is denied? Find out the crucial steps your business needs to take if facing this challenge. #SBAPPP #BusinessSupport #LoanForgiveness

What is an Overdrawn Director's Loan Account? A Director's Loan Account (DLA) is a record of transactions between a company and its director(s) that involve money going in or out. It's a common practice for directors to lend or borrow funds from their own company when necessary. However, things get tricky when the director takes out more money from the company than they've put in. This creates an "Overdrawn Director's Loan Account" – essentially, the director owes money to the company, and the account carries a negative balance. Having an overdrawn DLA can lead to some potential issues. First and foremost, it's crucial to keep business and personal finances separate, and an overdrawn DLA blurs this line. Additionally, tax implications and potential interest charges may arise when dealing with overdrawn accounts. To rectify the situation, the director can either repay the company or declare the overdrawn amount as additional income on their tax return. Alternatively, the company can waive the overdrawn amount, but this could lead to tax implications for the company itself. If you have any questions or thoughts, feel free to share in the comments below. #DirectorsLoan #OverdrawnDLA

Do you take electronic cash payments (Zelle, CashApp, etc)? Keep good records. The IRS is keeping tabs on cash deposits and transfers. To quote the article from AIPB, "Because the taxpayers did not maintain good records, the IRS auditor did a bank deposits analysis that included all bank accounts and the prepaid debit cards. Conclusion: underreported income and unpaid taxes." No one likes credit card fees and paying more taxes than they should. Take the time to create invoices and apply payments in your accounting records. Keep your personal and business accounts separate. Document, document, document. The link to this article expires Sept 27. https://lnkd.in/grzNWbsj

There has been a major uptick in ATO activity focussing on refinanced or redrawn loans. This activity is a result of a major data matching program of residential property loan data from financial institutions. This data is being matched to what taxpayers have claimed on their tax returns. Those with anomalies can expect contact from the ATO to explain the discrepancy. Call TaxAssist Accountants today(phone number in the profile)or visit the link below for more details! https://lnkd.in/gf5qDpmw #tax #taxes #accounting #business #taxseason #incometax #accountant #finance #smallbusiness #bookkeeping #taxpreparer #entrepreneur #taxrefund #taxreturn #taxprofessional #gst #money #taxplanning #payroll #taxation #businessowner #irs #taxconsultant #taxpreparation #taxtips #cpa #audit #accountants #taxtime #taxprep

For an owner-managed company, it is common for director-shareholders to borrow money from their business, thereby creating an overdrawn director’s loan account. In this latest insight, I explore the complexity of the rules and look at some of the common tax issues. #directorloans #taxtraps 

A very well written blog regarding HMRC Time to pays. Time to pays are great, however, NOT if you’re looking for other other credit lines or borrowing facilities. Not many know, that by funding your businesses HMRC liabilities (Corp Tax, VAT. & self assessment) that it is ‘Off Balance Sheet’ lending. It will not affect other lines of credit / existing lending facilities, nor future applications. Oh and another benefit, funding your HMRC liabilities can reduce your Corporation tax for the next financial year (offset from the P&L), which enables your business to have a better return on capital. Why pay one sometimes HUGE lump sum, when you could break down the payments into affordable, easier to manage monthly instalments? Ultimately this gives a business more headroom for investment and growth. (In my humble opinion 🤣) Anyway, a great read with some fantastic points! Well done Alex Beardsley, MCIM 👏 🤩 ABL - Complex finance, made simple.

Understanding the Applicable Federal Rate and Its Impact on Small Business Owners 📊💼 As a small business owner, staying informed about financial regulations and rates is crucial for making informed decisions. One such rate that can significantly impact small businesses is the Applicable Federal Rate (AFR). Here’s how it applies and why it matters: What is the Applicable Federal Rate (AFR)? The AFR is set by the IRS and represents the minimum interest rate that should be charged for certain transactions, such as loans between family members or business entities. It serves as a benchmark to ensure that transactions are conducted at arm’s length and prevent tax avoidance. How Does it Apply to Small Business Owners? 1. Loans and Financing: Small businesses often rely on loans or financing arrangements to fund operations or expansion. When providing loans to employees, shareholders, or related parties, small business owners should ensure that the interest rate charged meets or exceeds the AFR to avoid potential tax consequences. 2. Estate Planning: In succession planning or estate transfers within a family-owned business, the AFR plays a role in determining the interest rate for intra-family loans or installment sales. Adhering to the AFR helps minimize gift tax implications and ensures compliance with IRS regulations. 3. Contractual Agreements: When entering into lease agreements, installment sales, or other contracts involving deferred payments, small business owners should consider the AFR to determine appropriate interest rates and avoid inadvertently triggering tax consequences. Why Does it Matter? • Tax Compliance: Adhering to the AFR helps small business owners stay compliant with IRS regulations and avoid potential tax penalties or audits. • Financial Planning: Understanding the AFR allows small business owners to make informed decisions regarding financing, estate planning, and contractual agreements, optimizing their financial strategies. • Risk Management: By ensuring transactions are conducted at arm’s length and interest rates meet regulatory standards, small business owners mitigate the risk of IRS scrutiny or disputes. Staying informed about financial regulations, including the Applicable Federal Rate, empowers small business owners to navigate complex financial landscapes effectively. 💡💰 #SmallBusinessFinance #FinancialRegulations #TaxCompliance #AFR #EstatePlanning #BusinessLoans #IRSRegulations #Entrepreneurship #FinancialLiteracy #LinkedInPost

Fight for your financial recovery and master the appeal process with this week's blog post. From proving a 25% reduction in gross receipts to meticulous payroll calculations, learn how to navigate the intricacies of the process.