Terri Johnson, CPA

Here's an updated version of the relief bill summary. There are more stringent rules on eligibility for PPP funding, as businesses must have sufficient financial information available to show that revenue decreased by 25% or more in one quarter of 2020 compared to the same quarter in 2019. If you do not have accounting systems in place to accurately track this information, we can help get you set up. I will be back in the office after January 4 to answer questions and catch... up with clients. Banks are still rolling out the next round of PPP applications, so thanks for being patient! Of particular note, PPP loans are now based on 2.5 times monthly average 2019 payroll (3.5 times for restaurants) and the expenses paid with these funds will be deductible. Also, the Senate is to vote on an increased individual payment of $2,000, rather than the original $600, tomorrow. Happy New Year everyone! https://www.terrijohnsoncpa.com//covid-19-relief-bill-roun

In case you missed it, this is my blog summary of the bill that Trump signed into law. I won't be in the office this week as I'm spending some rare quiet time with the family, but I am watching this unfold and will hit the ground running with answers and assistance next week. (Watch for an increase in the individual payments, which Congress is supposed to be voting on today.) Hang tight on round 2 of PPP funding. The banks will need a few days to catch up and it's still a short holiday week for them. https://www.terrijohnsoncpa.com//covid-19-relief-bill-roun

This is good insight into the current hiring market for those struggling to find qualified applicants. (And this seems to be a problem throughout the country right now, not just locally.) https://www.economicmodeling.com/2020/11/13/wage-inflation/

My heart truly overflows today! And these photos do not do this situation justice. THANK YOU!! (And I have been remiss in saying thank you to the individuals who run the Backpack program on an ongoing basis. I just provide a place to drop off donations and put out requests when asked. What this group does for kiddos in the area is truly amazing.)

The IRS has not yet released mileage rates for 2021, but here are all other applicable figures for the year, including updated tax tables.

I completely forgot this was being published this weekend in all the other things going on in life. Nice Saturday morning surprise.

I have been asked to thank everyone in the community for being so generous and donating so much to Tiger Backpacks since our request went viral. (I almost can't get to my coffee pot this morning as my kitchen is just about full.) AT THIS TIME PLEASE PAUSE DONATIONS. There is only so much room for storage for the goodies, and items were being collected at different locations and then being delivered, so Donna is trying to take stock and figure out what they have. We've nev...er had a response like this, so I think everyone has been taken aback by the deliveries (in a good way). I will send out another request once Donna has had a chance to take inventory of what they need again. Thank you all and Merry Christmas! (If you have already purchased items, please feel free to leave them at my office at Terri Johnson, CPA 515 Blair Street, Hollidaysburg and we can store them temporarily until Donna has more room. We coordinate with her regularly regarding pickups.)

Productive morning. Certification completed! Now on to Christmas decorating!

This particular situation I've run into many times over the years. It's one inheritance situation that doesn't just affect the wealthy. (The info below is copied and pasted, but there are numerous resources online explaining further.) Did you know Biden wants to get rid of something called "stepped up basis"??? How does this affect you! When your parents pass and leave you the family house normally you would inherit that property at what it is worth today. If you were to ...sell that house you would only pay taxes on the gain from what it is worth today and what it sells for. If Biden does away with "stepped up basis" you will inherit the property for what your parents paid for the property. If you decide to sell you will pay taxes on the difference between the original purchase price and what it sells for today. Here is what this looks like! Current Policy Inherited House at Current Value - $200,000 Sells for $205,000 Taxable income = $5000 Taxes Due - 20% of $5000 = $1000 Profit to you = $204,000 Biden Policy Inherited House at original purchase price - $40,000 Sells for $205,000 Taxable income = $165,000 Taxes Due - 20% of $165,000 = $33,000 Profit to you = $172,000 If your parent were to have sold this property prior to passing they would have paid no taxes because it was their primary residence. So much for helping the middle class get ahead.

Before the year is up, I'll have over 80 hours of continuing education in this year alone. There's been a lot to learn this year!

Episode 2 is now available! The podcast is currently available to follow on Spotify, Google, and Amazon as well. Happy listening!

Hot topic for 2021 taxing/employment authorities... What now constitutes an "employee" vs an "independent contractor"? More than one authority is discussing this and revamping definitions. This could have huge effects for large and small employers.

The tax increase on higher earners would be shared by employers, which ultimately has a trickle down effect. "Under Biden’s plan, income above $400,000 would be subject to the 12.4 percent Social Security tax, which would be split evenly between employees and employers."

An interesting view on career paths and timing of focusing on family vs career. Men and women climb the ladder and reach goals at different stages in their lives, with women finding their stride in their 40s (or later), after their families are more stable and children are more independent.

401k plans are expensive for employers to implement and keep going on an annual basis because of the necessary 3rd party compliance and management fees. That, coupled with decreased tax savings for employers, would definitely make many give a 2nd thought to keeping them. In addition, this article doesn't address the fact that many have a required minimum contribution for participants, which would disappear if employers stopped these plans. (That's free pension money to employees that would disappear.) Taxpayers would only get a matching tax credit if they were able to contribute on their own behalf.

Thank you to everyone that we worked with over the last 9 1/2 months and kept us sane and smiling. We couldn't have done it without you!

If you are a business in the City if Altoona and are hiring, this details grant money you may be eligible to apply for. http://www.abcdcorp.org/financing/ #altoonagrant

I've just published my first podcast episode in a series focused on small business accounting and taxes. This and additional episodes will be on Spotify and other platforms soon! Https://smallbizcoffeebreak.buzzsprout.com

In trying to become more efficient, I think I've tried about a hundred different types of apps/software over the past couple of years. Sometimes I stumble upon a gem. If anyone is looking for a business texting app, Simple Texting is wonderful so far. I often find myself forgetting to reply to texts because once they're read there's nothing to remind me to follow up. I find myself asking clients to email instead. This app let's you keep messages "open" and even put a little sticky note to yourself with the message. And you can put in auto replies for after hours and weekends, if that helps you turn off the office. The main number you choose can be used to send bulk texts, and then you get several freebie numbers to use for basic texting. Just thought I'd share, in case it's helpful to anyone.

https://www.erienewsnow.com//pa-auditor-general-finds-inco

For those trying to compare the proposed Biden and Trump tax changes, here's a good article from a respected CPA journal. It breaks things down between the two candidates pretty well. https://www.cpapracticeadvisor.com//election-2020-comparin

New PA overtime thresholds taking effect...