Tag Archives: PPP

PPP – Paycheck Protection Program Part II, What You Need to Know!

As mentioned last week here in this announcement post, in brevity form, due to the Holidays near the end of the year, an additional stimulus act, was actually signed into law on a weekend (Sunday December 27th, 2020 to be exact)

This new stimulus bill called “The Appropriations Act of 2021” is a massive over 5000 page document, that touches many parts of the economy but most importantly for us … made a second round of PPP II, Paycheck Protection Program funds available.

25% Any Quarter Y/Y Sales Decrease, PPP I before PPP II

The two most important points to know about the second round of the paycheck protection program are as follows:

  1. In order to receive a second round of PPP payments you must have had a 25% decrease in sales in any one quarter in year 2020 versus the same quarter in 2019.
  2. The second most important item to know, is in order to have qualified to take the second round of the PPP II, program you must have taken the first round and used it. If you have not taken the first round you will be forced into taking the first round PPP I before you can get to the second round.

Tax Deduction Clarity

The massive page bill also clarified the ability to write off the loan for tax purposes. Said another way even though the loan is forgiven, as long as the loan was used appropriately, entities will be able to write those expenses off of their taxes effectively making what some call a double dip possible, which was congress’s original intention, but became confused by several IRS statements.

Employee Headcount, Max Loan, Looser Usage

A few other miscellaneous items include lowering of the threshold from 500 to 300 employees, limiting the maximum amount of the forgivable loan to a maximum of $2 million versus the higher amount in the original program, and more flexible spending options versus the mandatory 75% payroll usage in PPP I.

$150k Easy File Forgiveness Threshold

One last item included in the bill was a threshold of a basically $150K for non-invasive forgiveness. What that means if someone had taken the PPP loan of $150K or less, in either part one or part two you were basically have a simple one page document where are you certified you use the funds appropriately and the entity which you receive the loan is not to request any further documents. This does not mean that the small business Association cannot audit in the future but is meant to make the forgiveness program fluid and easy. Think twice of initiating any loan just over the $150k hurdle as the hassle may not be worth the extra funds.

Have a Great “PPP II Updated” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

PPP – Paycheck Protection Program – Part Two – Opens Again TODAY – Do not Hesitate if you missed the first time!

Last Friday April 24, 2020 a second round of the PPP AKA Paycheck Protection Program was approved and signed into order. With the benefit of hindsight and experience of Round 1 we can now offer even more pointers and helpful hints!

PPP – Paycheck Protection Plan Part 2 – Updated Tips SBA Logo

Do Not Delay – In less than two weeks the original program was completely diminished of all available funds, and this round has slightly less total funding.

Double Check Original Loan if you missed – If you tried with no success in round one, immediately contact your bank and status your original application… fingers crossed in not loosing our place in line, but each lender may treat this differently.

Smaller is Better – The big banks are having trouble processing these likely due to volume – if you have a small banking contact that’s a better possibility – if you do not have a small banking contact right now an attempt to arrange one will likely be fruitless as they will be very busy as well and are taking original clients first.

Sole-Proprietors and Business Owners -As a reminder this plan is for Sole Proprietors – Self-Employed or Businesses with employees who have been adversely affected in one way or another by the lock down/Virus.

Reminder of Loan Amount and Terms – The  loan is for 2 1/2 times your monthly average for last year as long as you have the same or more employees and will be available and if the loan is used in eight weeks with 75% or more being payroll it will be forgiven! No taxes, totally free money!

Open a New Account for Funds -Not surprisingly there were some buyers remorse and the federal government has let it be known that they’re serious about the use of these funds.  We highly recommend you open a second account and keep copious records on how you’re using these funds or you may have scrutiny problems in the future dealing with forgiveness!

Pandemic Unemployment May Make More Sense – Those self-employed if you showed little or low income last year you may be better off to attempt the Pandemic Unemployment Benefit which is $600 a week for Four months or until income commences – TIP- Our experience with this is that the unemployment agencies of the separate states are extremely backed up and will likely take a longer period of time to commence these benefits – Be patient!

Again, time is of the essence, if you missed Part 1, get going … these funds likely will not last long!

Have a Great “PPP Part 2” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

SPECIAL CARE ACT EDITION – PLEASE SHARE – Q 2 2020 Newsletter Video Audio Podcast Review By John Kvale

Click Here for direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page

Break In : If you don’t have a Twitter account, the time is now – many of the CARE ACT services are crashing their regular sites, as such communication is being made via Twitter … If you REALLY do not want a Twitter account, just use it as a browser, however by having an account you can subscribe to whatever entity you need to follow and you will be notified immediately as they comment.

This is also useful for following your industry organization, important company or almost anything you may need immediate notification.

 

Let’s get going!

Just so you know this was hurried with a call before and just after this video, so it was not edited as normal … but wanted to get this out to as many as possible as fast as possible… Never claimed to be a Spielberg .. haha … prompt, complete delivery of this information was very important at the moment!

Thanks in advance!

Q 2 2020 Newsletter

 

The CARE ACT –

On Friday March 27th 2020, a stimulus package was passed into law for the benefit of those being effected by the Corona Virus officially starting the clock for many programs.

The general spirit of the most important parts of the bill is getting money into the hands of consumers quickly AND attempting to incentivize employers to keep workers on the payroll!

Recovery Rebate

Checks Being Sent to Over 90% of the population

Each person to receive $1200, kids UNDER age 17 credited to parents at $500 each, no limit in headcount.

This Rebate is NOT TAXABLE!

The payout is likely to be sent out end of April or early May!

The applicable AGI phase out threshold amounts are as follows:

  • Married Joint: $150,000
  • Head of Household: $112,500
  • All Other Filers: $75,000

One time Maximum $100k IRA Distribution Available in 2020 Only

Investors affected by the Corona Virus can take a maximum of $100k of a Corona Virus impacted distribution from your IRA or Employer related plans.

  • There will be no 10% penalty for the withdrawal.
  • There will also be no 20% mandatory withholding.
  • You must take this distribution by 12-31-20.

You can repay this distribution within three years and have NO TAXES. You may stagger payback contributions over any time frame as long as you pay all of it back within three years of the day you received the distribution in order not to have taxes due on the distribution.

RMD’s (Required Minimum Distributions) Waived in 2020

All RMD’s for any and all mandatory plans are waived as of 2020.

This includes all types of RMD’s including those with the five year rule.

Next year will not mandate a doubling of the RMD.

Next years RMD will be on the higher mandated level, but again will not cause a duplicate.

One Off Charitable Deduction – Small – Available Only to Non Itemizers

Included in the new Coronal Stimulus package is a one time above the line, Charitable Donation Write off of $300.

This amount is only available to those who do not itemize.

Pandemic Unemployment Insurance Benefit

A New Pandemic Unemployment Benefit available to those effected by the Corona Virus.

This benefit is additionally available to those that may not have had access before, mainly self-employed individuals.

This new benefit is $600/week and lasts for four months.

There is also the elimination of the first week waiting period, allowing those immediate access if needed.

Student Loan Deferral

No payments required until September 30th of 2020!

No interest will accrue during the interim.

Must notify your loan provider if you are on automatic payment.

Paycheck Protection Program – AKA SBA Loan Program

Forgiveness loan that can be totally FREE to small business owners if they qualify and use the funds appropriately. If not, they will receive a possible 10 year term, 4% maximum interest rate from the Small Business Association, happily administered by qualified local banks in an attempt to speed the process of getting the loans to business owners.

The purpose of this loan is too keep your people employed!

Available for business owners of less than 500 people who were or have been adversely affected by the Corona Virus.

Must certify Good Faith that the business has been affected by the Virus. Which can include uncertainty of the future.

Must be applied for by June 30, 2020!

Repayments will not commence until at least six months and no longer than twelve months.

Loan amount is the lesser of $10 mllion or 2.5 times your average monthly payroll in 2019 – EXCLUDING AMOUNTS OVER $100K ANNUALLY

Capital Market Update –

Bonds are so good they are Bad

Given the speed of the equity stock, drop due to the ever expanding Coronavirus. Investors were caught flat-footed and in a dash for cash, sold their old faithful bond holdings which are viewed favorably again due to their safety.

Using history as our guide, not only does this correct itself, but also likely turns out to go even higher in value, which is what happens when rates go down and bonds go up.

In closing, one more bit of good news in almost all cases we will have reinvestment of income at these lower prices, taking advantage of that pricing for our own benefit.

2-26-20 VBMFX - Largest Bond Fund in World

We hope you enjoy … talk to you in the Summer !!!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

CARE ACT UPDATED INFORMATION (Please Share, Especially With Self Employed Solo Displaced Business Owners of All Types) – “The “PPP” PART 2 UPDATE Paycheck Protection Plan!”

In an attempt to get this to you ASAP we are relying on available information, IT IS CHANGING FAST, but the PPP Plan for now, is a first come, first served basis! You may want to act quickly.

Break In : If you don’t have a Twitter account, the time is now – many of the CARE ACT services are crashing their regular sites, as such communication is being made via Twitter … If you REALLY do not want a Twitter account, just use it as a browser, however by having an account you can subscribe to whatever entity you need to follow and you will be notified immediately as they comment.

BREAK IN: Your local bank will likely be able to accept an application FRIDAY APRIL 10, we would suggest you contact your bank about this plan immediately as Friday is a Holiday for many!

The following is most fitting for an Self Employed Employer or Solo Practitioner who has been displaced!

The Care Act was signed into law on Friday, March 27, 2020 and includes a provision for Employers to extend workers pay and possibly NOT REPAY!

The “PPP” Paycheck Protection Plan

BREAK IN: Using Texas as our template the Pandemic Unemployment funds are not being delivered yet as there are too many regular Unemployment requests in front of the plan.

BREAK IN: There is some dialogue that if you have ANY income you may not be able to use the Pandemic Unemployment funds and you may not be able to use both the funds at the same time – This PPP Plan for Solo or Self Employed is likely a faster and better solution at this time.

Forgiveness loan that can be totally FREE to business owners if they qualify and use the funds appropriately. If not, they will receive a UPDATED TERMS 2 year term, 1% interest rate from the Small Business Association, happily administered by qualified local banks in an attempt to speed the process of getting the loans to business owners.

The purpose of this loan is too pay your salary and other expenses…see below.

Available for solo owners of less than 500 people who were or have been adversely affected by the Corona Virus.

Must certify Good Faith that the business has been affected by the Virus. Which can include uncertainty of the future.

Must be applied for by June 30, 2020!

Repayments will not commence  UPDATED : IN SIX MONTHS!

Loan amount is the lesser of $10 mllion or 2.5 times your average monthly payroll in 2019 – EXCLUDING AMOUNTS OVER $100K ANNUALLY

IF the entire loan is used completely within eight weeks and is used for any of the following:

  • Payroll costs
  • health insurance premiums and other healthcare costs
  • Salary and net income from business
  • Rent
  • Mortgage interest (excluding amounts pre-paid)
  • Utilities
  • Other business interest incurred prior to February 15, 2020

It may be completely forgiven (NO TAXES IN ANY WAY OR PAY BACK AS WE KNOW OF NOW) if the practitioner meets the following employee limits:

  1. The business must maintain the same number of employees (equivalents) from February 15, 2020 through June 30, 2020 as it did during either the same period in 2019 or
  2. from January 1, 2020 until February 15, 2020. To the extent this requirement is not met, the amount eligible for forgiveness will be reduced, ratably.

You may not cut any employees <$100k annually by more than 25% or they will not count towards the above headcount.

Again this information is changing quickly, so be sure to confirm with you Banker his comprehension of this!

Have a Great “PPP Solo Plan” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

CARE ACT Review (Please Share, Especially With Displaced Business Owners of All Types) – “The “PPP” Paycheck Protection Plan!” Expected to be Over Subscribed …

The following is most fitting for an Employer who has been displaced!

The Care Act was signed into law on Friday, March 27, 2020 and includes a provision for Employers to extend workers pay and possibly NOT REPAY!

The “PPP” Paycheck Protection Plan

BREAK IN: Some legislatures are expecting this to be over subscribed i.e. Run out of money – do not hesitate! 

BREAK IN: Your local bank will likely be able to accept an application TOMORROW, FRIDAY APRIL 3!

Here is a link to a sample application on the SBA website, and Here is a link  to the form saved here on our blog in case the site is down.

Forgiveness loan that can be totally FREE to small business owners if they qualify and use the funds appropriately. If not, they will receive a possible 10 year term, 4% maximum interest rate from the Small Business Association, happily administered by qualified local banks in an attempt to speed the process of getting the loans to business owners.

The purpose of this loan is too keep your people employed!

Available for business owners of less than 500 people who were or have been adversely affected by the Corona Virus.

Must certify Good Faith that the business has been affected by the Virus. Which can include uncertainty of the future.

Must be applied for by June 30, 2020!

Repayments will not commence until at least six months and no longer than twelve months.

Loan amount is the lesser of $10 mllion or 2.5 times your average monthly payroll in 2019 – EXCLUDING AMOUNTS OVER $100K ANNUALLY

IF the entire loan is used completely within eight weeks and is used for any of the following:

  • Payroll costs
  • Group health insurance premiums and other healthcare costs
  • Salaries and/or commissions
  • Rent
  • Mortgage interest (excluding amounts pre-paid)
  • Utilities
  • Other business interest incurred prior to February 15, 2020

It may be completely forgiven (NO TAXES IN ANY WAY OR PAY BACK) if the employer meets the following employee limits:

  1. The business must maintain the same number of employees (equivalents) from February 15, 2020 through June 30, 2020 as it did during either the same period in 2019 or
  2. from January 1, 2020 until February 15, 2020. To the extent this requirement is not met, the amount eligible for forgiveness will be reduced, ratably.

You may not cut any employees <$100k annually by more than 25% or they will not count towards the above headcount.

Have a Great “Payroll Protection Plan” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents