With the world as we know it changing every day, we have been trying to stay on top of what's happening to help our clients and ourselves. We want to use this changing knowledge to protect our finances, our employees, to know if are eligible for assistance, and how to help our clients navigate through these strange times. Today we are going to be talking about Employee Retention Credit.

Hello, Summerville! We are so excited to see our beautiful town get back to some sense of normal. Everything about our daily and professional lives continues to change, but we are relieved to see that individuals and businesses continue to move forward. One of our main focuses these past two months has been how the current pandemic is affecting our finances. There has been a lot of help thanks to tax day being pushed back, the stimulus relief fund, and the CARES act. Each has seen its ups and downs for individuals and small businesses, bringing a mixture of relief and frustration.

Most of the financial help that we hear about day to day is that for personal finances, but businesses of all sizes have needed just as much help through these difficult times. Many have been required to operate at 50% capacity due to safety protocol during the pandemic while others have been completely shut down after they were deemed nonessential. With the signing of the stimulus relief package and the CARES act, businesses of all sizes were put into consideration. Small business loans and other forms of relief were immediately put into action, although their first big wave was not received well nor handled well.

Just like you as an individual, businesses have been on top of filing and working towards a way to help their companies survive so their employees have a place to come back to when this is all over. Most employers who were able to apply for any kind of assistance did so in March, but there are still opportunities and things to apply for if your company hasn't already. In this blog, we are going to be talking about one of these forms of assistance that is still available to businesses, and that is employee retention credit.

WHAT IS IT?
You may or may not be familiar with this term or what kind of help it provides. This is a business relief provision that encourages employers to keep employees on the payroll, even if they're not working. It helps provide relief to unemployment offices to limit the number of people applying for unemployment. It was also created to help guarantee that employers will have returning employees once they can open up again. Thanks to the creation of the employee retention credit, the government will reward your company for keeping your employees on your payroll and for deciding to choose this assistance. It is refundable tax credit taken against certain employment taxes that can equal up to fifty percent of an employee's wages that you, as an employer, are still providing. The tax credit is fifty percent of up to $10,000 in wages per employee that has continued to be paid by the employer. This means that your company can be awarded a $5000 tax credit per qualifying employee. This was created as a business relief provision. The money your company will be receiving is a refundable payroll tax credit for qualified wages that will be paid or have been paid to your employees between March 13th of this year until December 31st of 2020.

ELIGIBILITY
You and your company are eligible if you have been directly affected by COVID-19. If you have been forced to work at half capacity due to safety precautions, or you have been forced to shut down entirely because you are a nonessential business, you are eligible. No matter the size of your company, you are still eligible. Your company is eligible for this tax credit if your gross receipts for this current quarter are less than what they were in the same quarter this time last year. You are NOT eligible for this tax credit if you are a governmental employer, or if you are self-employed or a small business that has taken small business loans or other small business loans created to help with issues caused by the pandemic.

WHAT TO KNOW
Once you have decided to pick this type of relief, you can begin claiming it right away by reducing your payroll taxes sent to the IRS. If it ends up that your tax credits exceed your payroll taxes, you can ask for a refund directly from the IRS. If your company has over 100 employees, the only wages that can be obtained are of those who were full time and are not working right now. If you have under 100 employees, you can claim all of your employee's wages regardless if they are working or not. Wages up to $10,000 can be claimed, and this does include how much your company pays towards health insurance for each employee. Since you can claim 50% of this $10,000, the max credit you can receive is $5,000 per employee. The tax credit will be repaid to you after subtracting your share of your employee's social security taxes, and it will be treated like you overpaid your taxes, and it will be returned to you.

THE FUTURE
In comparison, the Paycheck Protection Program (PPP) was also created to offer similar benefits to businesses. You can't apply for both or receive benefits from both, you have to pick one or the other. When deciding which is best for you and your employees, always pick the aid that will help you and your employees the most, not one or the other. Since the applications for the PPP were suspended on April 17th of this year, this will now dictate your choice of what is available to you and your company. As the country slowly begins to reopen, pay close attention to how this will affect your business. You may be able to go back to work at full capacity, and you may not. There could potentially be more aid coming, we will just have to wait and see what the coming weeks will bring. If you and your company have been unable to receive any kind of benefits, keep your eyes open for this opportunity.

These have been difficult and confusing times. You aren't wrong in feeling overwhelmed and confused. We where are here to support you, Summerville. You are not alone in your fight. Also don't forget, if you're looking for the best tax accountant in Summerville, the best tax services in Summerville, the best Quickbooks services in Summerville, the best IT services in Summerville, and the best payroll services in Summerville, we are still here for you. Tax season may be over for some and just starting for others, and we will be here for you no matter what!

Now that Tax Season is officially here, there are so many things on your plate and that of your Tax Preparer. But did you know that there is a very scary potential danger lurking behind the dark doors of the internet that could ruin your life simply by getting access to your tax documents?

Happy February! We are in full swing of Tax Season here in Summerville and have been thoroughly enjoying helping our clients get their taxes prepared and sent off. The IRS has been accepting online tax submissions for over two weeks now, and we are ready for the very busy weeks ahead of us. We are here to help you with all of your tax needs in Summerville, so please don't hesitate to reach out and connect with us so we can help you file appropriately and on time!

Our company, along with many others like us, are in the busiest times of their work year. Tax season can bring the fear of making sure your tax documents are filled out appropriately and on time along with the need of avoiding any penalties and accruing penalties. But the fear of online security attacks on CPA's and Tax Preparers also needs to be added to the list of worries and concerns for everyone this tax season. Cyber crime has sadly become one of the largest and most expensive forms of crimes globally. Banks, shipping companies, medical corporations, and even dating sites have become victims of cyber attacks, causing the leak of some of the most private and personal information that someone can get their hands on to use against the company or to steal someone's identity. It looks like CPA's and Tax Preparer's are starting to inch their way further up the list of those who are attacked most frequently, especially the deeper we head into Tax Season. The reality that Tax Preparers are some of the most attacked and targeted because of the very high profile data they are in charge of is becoming all too familiar. Cyber crime is running rampant through the streets of the internet, and during tax season, the level of crime and danger has become catastrophic.

Why specifically are these cyber criminals going after your CPA's and Tax Preparers? Think about the kinds of information they are privy to and have stored on their hard drives. They have years worth of bank account numbers, social security numbers, years of previous tax returns, your Employee Identification numbers, and plenty of other documents that could lead to your whole life being stolen if taken into the wrong hands. This kind of information is the forbidden candy store that is off-limits to any prying eyes, making it even more appealing to cyber criminals. This kind of information can also be very lucrative for the criminal, as they can use it for blackmail, something they can sell, or simply ruining your credit and stealing your identity. Thankfully this is where the Financial Services Act of 1999 comes into the picture to save you and your Tax Preparers state of mind. This act legally obligated any Tax Preparer to provide protection for their clients' digital documents.

Cyber criminals know that tax season is the most stressful, busy, and difficult times of the year for any Tax Preparer, and they will take advantage of that. As much as we hope this would be common knowledge to our fellow tax preparers, there are still some out there who are not as aware or not as prepared as they should be. Even if cyber attacks have never been an issue for your company or your tax preparer before, that doesn't mean they couldn't be attacked in the future. One of the biggest issues with cyber criminals now is that they are becoming smarter and more dangerous as time goes by. They are starting to figure out how to break in quicker, stronger, and in ways they never have before. Now, many of these attacks can go unnoticed for long periods or go under the radar without ever being caught. No matter the size of a Tax Preparation company, it will be at risk and can still be targeted. To a cyber criminal, any information they can steal is a good opportunity for them, and a horrible loss for you.

We understand how difficult this time of year is for anyone involved in preparing taxes, we are doing it right alongside you. But we could not stress enough that it is past time to take your IT protection seriously. Make sure you are constantly up to date with the programs you use to keep your digital files protected and consider working with a company whose sole job it is to keep you safe from things some software can't even detect. It might seem like overkill, but when it comes to your client's personal information and your reputation as a company, you can't put a price on that! For those looking into working with a Tax Preparation company, make sure to ask about the company's IT security. Do your research and see what protection they have provided their clients. Make sure their track record is strong, and that you feel confident in the protection they offer. Don't be afraid to ask about their security measures. you're handing over your personal information and it needs to stay this way. If they can't provide this information, then they might not be the company for you. We understand that asking these types of questions might be the last thing on your mind during tax season, but asking them and getting a positive response is just as important as filing your tax documents by April 15th!

Be smart this tax season and take your protection seriously. Make sure you are prepared for whatever might come your way. Until next time, we are Pathways Consulting and we are are here for all of your tax needs here in Summerville!

Running a business is hard, anyone can acknowledge that.  Today, one of the biggest downfalls of any company is its bookkeeping. Simple mistakes and errors can not only make the running of the business difficult but it can also be its downfall. Try and avoid these easy bookkeeping mistakes to make your business run smoothly.

Bookkeeping is something that all businesses, big or small, have to do. The pen to paper bookkeeping for many is a thing of the past thanks to amazing online programs and applications, like Quickbooks, that do a lot of the hard work for you. For some, making and keeping a note of everything by pen and paper is still preferred. But your bookkeeping and how you handle it is just as uniquely personal as your business model and strategy. But the biggest factor, however you decide to do your bookkeeping, is to avoid some of the most simple and common mistakes out there. Today we will be discussing how to avoid these common mistakes to keep your small business working smoothly no matter what!

The First Steps
When it comes to the point where your small business can grow and expand, that is so exciting! But it's so easy to overlook the important steps of your full bookkeeping to successfully make those steps. Many new business owners will just do the bookkeeping themselves. They rush the process, they don't account enough time or attention to the process, and completely mess up a good chunk of all of it by doing so. Our first recommendation is to work with a professional. If you don't want one full time or on staff, at least learn from them how to properly do everything that needs to be done. Take more classes, attend seminars, or even bend the ear of professional bookkeepers. Or hire someone like us at Hoods, who can help you understand Quickbooks and how to properly use it for your company! Most importantly when you sit down to do your bookkeeping, take your time and breathe.

Budget Time
This might be obvious, but it still needs to be said. You have to budget for your small business or the outcome could be a disaster! You raised and created the fund to create the company in the first place. So you know that your bank account doesn't have unlimited spending for the year or years to come. You need to plan how the money of the company will be spent, or in other words, what will your budget be. A budget will help you track your accounts and records, any issues can be corrected quickly, you can plan for any emergencies, keep the company running, and pay your employees. In 2018 alone, 61% of small businesses didn't create a budget. How scary is that? A lot of young companies don't have a full appreciation of what a budget can do for the company itself. Without one there is no way to evaluate the performance or even the goals for the company. You also can't continue to develop the business without one, and you can't see any growth either.

The Paperwork
One of the most important steps in bookkeeping is the reconciliation of your books. This is making sure all of the bank accounts, credit cards, and all the reports match and you have proof to show that they do. This is a huge step when it comes to paying your taxes based on how much the company made, how much was spent, and how much was paid to the employees. These factors will all factor in how much you owe the IRS come tax season. Not doing this properly can lead to over or underpaying your taxes. This might have you re-doing your taxes, owing more, and possibly accruing late fees. Not to mention the hours spent on the phone and in front of your computer to fix these issues. You can also become a victim of fraud, have bank withdrawals that were not authorized, several other bank errors, and the disappearance of money you can't account for.

It Doesn't Mix
Many small businesses start in garages or home offices. Some of the greatest companies of all time have started this way. But don't make the mistake of mixing your home and business bills, expenses, or taxes. Make sure you know exactly how to write off business expense items and what they are before doing so. The IRS is very well versed in what you can and cannot call business expenses from your home, so don't try and fool them. Even if you make an honest mistake, it can still hurt you come tax time. Separate your credit cards, your living space from your workspace, your landlines, and cell phones. Keep meticulous records of expenses and receipts, mileage, and time. Don't muddy or blur the lines between home expenses and business expenses. This will make your life and dealing with the IRS much simpler!

There are a lot of small moving parts to bookkeeping, but all of them have to be well oiled to keep the machine running. Don't rush, make sure you know what you're doing, and never be afraid to ask for help. We are here to offer you the best tax services for your business and to help you do your bookkeeping with Quickbooks. Don't let your small business become prey to these easy mistakes. Take the time to educate yourself and keep your bookkeeping focused and accounted for.