Springfield Business Journal_2020-09-28

PRESENTED BY PRODUCED BY PREMIUM SPONSOR Interviews by Christine Temple, SBJ Features Editor Anne Baker Finnegan’s Wake, Civil Kitchen and Tinga Tacos Lt. Jennifer Charleston Springfield Police Department Susan Haralson Premier Home Health Care Brandy Harris Boys & Girls Clubs of Springfield Stephanie Ireland Ireland Architects Jennifer Jackson Springfield Business Journal Darline Mabins Arvest Bank Jordan McAdoo StitchFix Carol Taylor Evangel University Shurita Thomas-Tate Missouri State University SEASON 1 OF NO CEILING COMING OCT. 12 Local women share their journey to the top of their professions and the challenges and triumphs they faced along the way. They’re rewriting the script on success and there’s no ceiling. Listen at SBJ.net or wherever you find your podcasts. 14 · SBJ.NET SEPT. 28-OCT. 4, 2020 TAX & FINANCIAL PLANNING for that period. If for some reason an employer can’t recoup the taxes from an employee — the employee quits, for ex- ample — Ways and Means indicates “the employer may make arrangements to oth- erwise collect.” If the taxes aren’t paid by May 1, 2021, “interest, penalties and addi- tions to tax will begin to accrue.” When asked for comment about Mis- souri’s decision to not participate in the tax holiday, Par- son spokesperson Katy Alexander provided an email reiterating a state- ment made by Chris Moreland of the Office of Ad- ministration: “We do not believe our state employees would be advan- taged by doubling their tax obliga- tions between January and April of 2021, in exchange for temporarily reduced tax- es for three months this year. We reached out to a variety of business organizations, employers and other states to see if they were participating and most have elected not to participate.  For these reasons we will not be participating in the payroll tax deferral.” Two certified public accountants at KPM CPAs PC say they’re taking the same approach as the state and Arthur unless cli- ents ask them not to. So far, none have. “There’s just a lot of confusion surround- ing it,” said Josh Brock, a manager at KPM. “What happens if your employee leaves or gets terminated before the year’s up? Are you going to be hit paying that actual tax?” PPP and taxes Andy Clemons, KPM shareholder, said the payroll tax holiday isn’t the only pro- gram loaded with questions. Specifically, he brings up the Paycheck Protection Program. “Right now there will be a tax burden associated with this unless Congress acts to basically make the PPP funds that are spent expenses, make them deductible,” Clemons said. “They currently are not deductible. There is defi- nitely some tax planning that will need to be done for those borrowers.” CPA Jared Duckett, co-owner of Duck- ett Ladd LLP, said when the PPP was an- nounced, his clients scrambled to get the money to keep their businesses’ doors open with the understanding it was a forgivable loan. But now that they have the money, they’re wondering how it’s forgiven and how it all works. “I think really what was confusing to most clients is it came out and most people understood that it wasn’t taxable, it was a forgivable loan. But there is a section in the code, any expenses related to tax-exempt money is not tax deductible,” Duckett said. Arthur at Sun Solar was among those who sought PPP money. “When the pandemic hit, we initially laid off 15 of our 105 employees,” he said, noting a month later, he was approved for the forgivable loan. “We immediately re- hired everyone we could. We thought this could be a good pro- gram that would put more money in their pockets.” Arthur did not disclose the amount of his PPP loan, but according to data from the U.S. Small Business Administra- tion and the Department of the Treasury, Sun Solar received between $350,000-$1 million. He said he’s confident his PPP loan will be forgiven, but he still has questions. “Ob- viously, even if it’s forgiven, does it count as income and how does that affect the value of my company?” he said. To get ahead of any potential issues, Duckett, Clemons and Brock all offered the same advice: Get with your adviser now for tax planning. “Talk to your accountant, especially if you have not been impacted like you thought you might. Definitely start plan- ning now,” Clemons said. “A lot of the planning has got to be pre- liminary because there’s a lot of questions that Congress needs to answer,” he said, adding the experience feels like “we’re flying the plane as we’re building it.” One of the re- maining questions is whether Con- gress will vote to make the Small Business Adminis- tration’s PPP easy loan forgiveness application — as opposed to the long form — more widely available. It presently applies to businesses that fall into categories that are broadly de- fined as a self-employed person with no employees or businesses that didn’t re- duce the wages of employees who earn less than $100,000 annually. “Congress is considering a $150,000 threshold,” Clemons said. “But again, it remains to be seen. It’s that flying-by-the- seat-of-my-pants concept.” Arthur said he’s ready for Congress to make some decisions and clarify some of the issues regarding pandemic relief. “I still feel overwhelmed and feel like I’m missing stuff,” he said. Relief: Tax-related questions abound for Paycheck Protection Program Continued from page 9 Jared Duckett : PPP funds may be subject to taxes. Josh Brock : There are too many unknowns in payroll tax deferral. We’re flying the plane as we’re building it.” —Andy Clemons KPM CPAs PC