Last week, when I wrote my message to our Sierra Madre business clients, the biggest news was the second round of the PPP, and that expenses covered under the first round of it would be tax deductible. Has anything happened since then? Goodness, even just the “mere” fact that both houses of Congress are under Democrat control now, after the Georgia elections, would have been the subject of many tax and business policy discussions. But with ALL of the events of the week in view, we really do have a choice to make as business owners: Will we marinate in fear and anger … or will we take care of our customers, our team, and our business? I’m going to leave the cultural commentary aside today (we’re being bombarded with it from all sides, after all), and instead I’m going to be the voice that says: you have a job to do; so let’s do it. Here’s a nice palate-cleanser to start. I was pointed to that Twitter thread via email (I normally don’t spend large amounts of time on Twitter, nor do I suggest that you do) … but I suggest you read it and digest. As a Los Angeles County business owner, there is much there to think about. I particularly liked this: My team and I find great fulfillment in coming alongside Sierra Madre businesses like yours and pointing towards the way of financial hope. And there is plenty to like about the tax and regulatory regime that we will be operating under in TY2021. And obviously … we don’t know yet exactly how it will all change. (And change, it will.) But in the meantime, if you need to reach us, we’re here:626-357-9703 Now … last week I went over some specifics of the CAA and how it affects your business (as I alluded to above). If you missed that, let me know. Today, I’d like to begin a deeper conversation around the foundations of your business. I offer these questions on an annual basis, and they are worth considering AT LEAST that often… My Sierra Madre Small Business Health Quiz (Part 1)“Be more concerned with your [business’] character than your reputation, because your character is what you really are, while your reputation is merely what others think you are.” –John Wooden These are questions that might raise a few concerns, and that’s fine — it’s what we’re here for. Alongside establishing clear measurables for success (KPI’s), these are the sort of things that effectively-growing small businesses really need to get a handle on, regardless of their tax situation. I like to share these questions regularly with my people, simply because it’s good practice to continuously revisit these things and ensure we’re headed in the right direction. And further, as a business owner, it’s important that you take a REGULAR, clear-eyed look at the underlying legal and financial foundations for your business. As we all pull our tax documentation together, I can’t think of a better time. This is a bit of a different approach than I normally take in my Strategy Note, but if you take it seriously … it can be a transformative process. Take a look at each of these questions, and if you are troubled by any of your answers — send me back an email. If it’s not something we’re equipped to handle, we can equip you with a good advisor. Regardless, we can talk about them when we do meet for your taxes. Ross’ Small Business Health Quiz #1: Is the value of your business firmly established?Questions to consider: Have I ever had my business value appraised by an outside party? Do I have a formal buy/sell agreement in place? Is my buy/sell agreement funded? Does my buy/sell agreement adequately protect my heirs, my business, and my partners? Has this agreement been reviewed in the last 3 years? If you have any plans to someday extricate yourself from your business (and you should ALWAYS consider your exit strategy), these are critical questions. #2: Is there an emergency plan?Questions to consider: Do I have a will, and is it up to date with my business wishes? Do I have a plan to retain key employees if something were to happen to me? Are my assets protected from potential litigation? Have I identified and written down my trusted advisors? Unless you plan to forever cheat death, a business owner would be foolish to not prepare for that event. #3: What happens next?Questions to consider: Do I have a formal succession plan prepared and on file? Does my succession plan have a provision for disability? Have I involved both family members AND key employees in my succession planning? Do I have a disability buy-sell, or overhead expense coverage? Do I have contribution protection for my retirement if I were to become disabled? Again, these eventualities always seem remote on the front end … but if your answer is “no” to more than a couple of the above questions, it would be a good idea to get in contact with someone competent to help you fix it. I’ll be back next week with a few more questions for you… I’m grateful for our partnership, and for your referrals. Warmly,   Rodney Ross(626) 357-9703Ross & Associates Accountancy Corp   Feel free to share this article with a Sierra Madre area (or beyond!) business associate or client you know who could benefit from our assistance. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.

Wow, does it ever feel good to have turned the page on 2020. This first “working week” is when I finally began to feel the newness of it all. Yes, it’s “just a date” on a Gregorian calendar, but … 2021 holds great promise for our Los Angeles County business clients. With the potential of easing lockdowns in our future (assuming that the vaccine and other developments will enable a further re-opening of society), and with the extensions of the PPP and other very nice provisions in the CAA, here at Ross & Associates Accountancy Corp, we are champing at the bit to help our Sierra Madre SMB clients build something great in 2021. And by “great”, I mean financially secure. That is our wheelhouse. There’s plenty more that I write about and discuss with our clients, but ensuring that your Sierra Madre business never has to worry about disaster striking (again) is a key motivator for us. If you need to reach us, we’re here: 626-357-9703 Now … I’d like to take today’s Note to go over some of the SMB provisions of the clunkily-named “Coronavirus Response and Relief Supplemental Appropriations Act of 2021”, also known as the “Consolidated Appropriations Act” or CAA for short (the CAA is the entire bill … the clunky name is for the part that directly applies to this conversation). I shared some of this last week, but I know that the holidays might have gotten them lost in the shuffle. Plus, there’s more to say… Provisions of the Second Coronavirus Relief Bill That Affect Sierra Madre Small Businesses“What would you attempt to do if you knew you could not fail?” -Robert Schuller The passage of this relief bill brought some changes that we had been hoping to see for months (notably the deductibility of PPP-related expenses), but there is much more to this relief bill than merely that, and the $600 stimulus payments that get all of the press. So I thought I’d delve a little deeper than I did last week on the high points of this CAA bill. (And now that year-end is mostly behind us, if you need to talk through any of this, we’re right here, and have more availability):626-357-9703 PPP-Related ProvisionsAs I mentioned, Sierra Madre businesses are now allowed to deduct expenses associated with their forgiven PPP loans — this is amazing news. Further, the new law provides $284.45 billion to reopen and strengthen PPP for first and second time borrowers and reauthorizes the program through March 31, 2021. However, the requirement in order to receive a second PPP is that the small business has less than 300 employees and can demonstrate a revenue reduction of 25 percent. Oh and simplified forgiveness applications for loans under $150K. Every lender will handle slightly differently, but what the bill indicates is that the borrower signs and submits a one-page certification that requires the borrower to list the loan amount, the number of employees retained, and the estimated total amount of the loan spent on payroll costs. That’s it! The bill also expands the list of eligible expenses to include covered operations (software, cloud computing and other human resources and accounting needs), PPE, covered supplier costs and damage costs due to public disturbances. Oh, and I had missed this last one before, but this is also a very nice bonus: the bill repeals the CARES Act provision that requires borrowers to deduct their EIDL Advance from their PPP loan forgiveness amount. Also very nice. If you have already applied for forgiveness under previous provisions, you will want to contact your lender to find out how you can take advantage of these new provisions. Be patient, though … they will certainly be slammed. More EIDLThe new law provides $25 billion to restart and extend the EIDL Advance Grant for small businesses in low income communities, AND it creates a process for existing EIDL Advance grantees that received less than $10,000 to reapply for the difference between what they received and the maximum EIDL Advance Grant of $10,000. Here is where you can do that. Employee Retention Credit For The WinBeginning on January 1, 2021 (and through June 30, 2021), the new relief bill: Increases the payroll tax credit rate from 50 percent to 70 percent of qualified wages. Very nice. Also it expands eligibility for the credit by reducing the required year-over-year gross receipts decline from 50% to 20% and provides a safe harbor allowing employers to use prior quarter gross receipts to determine eligibility. This might not seem significant, but believe me, for the right business, this is VERY good news. Increases the limit on per-employee creditable wages from $10,000 for the year to $10,000 for each quarter. Much more generous. Increases the 100-employee delineation for determining the relevant qualified wage base to employers with 500 or fewer employees. Here’s the best part: employers who receive Paycheck Protection Program (PPP) loans may still qualify for the ERTC with respect to wages that are not paid for with forgiven PPP proceeds. Previously, you had to choose one program or the other … now, as long as you qualify for both (see above for those newly-expanded qualifications), you can use both. Further Miscellany Go take some clients out for meals! Because there’s now 100% deduction for business meal food and beverage expenses (provided by a restaurant) that are paid or incurred in 2021 and 2022. Last year, this was only 50% … now it’s full. Contractors who were temporarily unable to work due to facility closures and other restrictions will be able to receive reimbursement for paid leave from federal agencies. This is great news. It remains to be seen what inflation will result from all of these measures … or exactly how all of this will be paid for by Uncle Sam, but that’s not my lane. My lane is helping you and your business THRIVE in 2021. We’re here for you… Warmly,   Rodney Ross(626) 357-9703Ross & Associates Accountancy Corp   Feel free to share this article with a Sierra Madre area (or beyond!) business associate or client you know who could benefit

It’s going to take us many weeks to digest everything in this massive omnibus of a relief bill that the President signed on Sunday night. And with year-end barrelling at us (2021 is on FRIDAY), it’s unlikely that we will be able to make substantive action on your behalf THIS WEEK. That doesn’t mean that we aren’t already diving into the thing — we are — but just that we are prioritizing year-end matters for our clients this week. If you need to reach us, we’re here: 626-357-9703 Please do have patience with us. Because of the volume of client requests this time of year (on top of family and holiday-related disruptions), we’re not always able to respond as quickly as you might need. But I did want to quickly highlight some provisions of this massive bill that apply to Sierra Madre SMB’s, and about which many will be glad about… This is BIG: the deduction of business expenses paid for with forgiven Paycheck Protection Program loan proceeds is now ALLOWED. This has been a raging debate among tax nerds, and Congress ended the ambiguity in favor of deduction. Streamlined forgiveness for PPP loans under $150K. Also a significant development for many — check with your lender about how they want that now to be handled. Restoration of the 100 percent business meals deduction for two years to help the restaurant industry (it was 50 percent) Extension of the employee retention credit through June 30, 2021 — AND (also potentially significant) … you can now take this credit even if you also took a PPP because of the decoupling of the PPP from any kind of tax credits Some of these are a big deal for certain Los Angeles County clients, and we’re going to have fun with them on your behalf as we prepare your 2020 taxes. Ultra Last Minute Tax Moves for Sierra Madre Businesses“Every task, goal, race and year comes to an end…therefore, make it a habit to FINISH STRONG.” – Gary Ryan Blair As I mentioned to my Sierra Madre family clients, time is short, and some moves do require more than this week to pull off — so I’m restricting myself to those items which you can realistically do something with before the end of the year. And, again–these are focused on what will apply to your business. If you didn’t get that list for a personal/family return, let me know and we’ll shoot it over to you. Also, the fact that expenses paid via PPP loan proceeds are now deductible might affect these calculations for you. If you want us to give you quick advice, shoot an email using the link at the top of the page, or use this:626-357-9703 1) Buy Supplies in Advance (to increase expenses and offset income)How much disposable equipment do you expect to use in 2021? Order it now so the cost is deductible in 2020 if you need to offset income. Buy what you think you’ll need for the coming year, as long as you have the space to store it. This is especially easy to do with software, information courses, or other subscriptions that you know you want to keep. A word of caution: Under a 12-month rule, you cannot deduct prepaid expenses that run more than the end of the year following the current year. For example, if you prepay a three-year subscription to a trade journal, the cost is deductible over three years (not just one). 2) Work Now, Bill LaterInstead of sending an invoice immediately so you’ll receive payment this week, consider waiting until next week. This will ensure that payment is received in 2021, and taxes on the income are deferred for another year. However, it may make sense to adopt the opposite approach — bill immediately to receive the income this year. 3) Get Ahead On Other Vendor CostsYou may have bills piled up that are not due until 2021. If you pay them now, you can deduct the expenses in 2020. Don’t have the funds in your bank account at the moment? Consider putting the expenses on your business credit card if the vendor or other party allows it. Costs charged to credit cards before the end of the year are deductible this year even though the credit card bill isn’t due until 2021. I do hope these help — and remember that we’re always here to help! Warmly,   Rodney Ross(626) 357-9703Ross & Associates Accountancy Corp   Feel free to share this article with a Sierra Madre area (or beyond!) business associate or client you know who could benefit from our assistance. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.

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Maybe I’m writing this today because we’re very much feeling the end-of-year crunch here at Team Ross & Associates Accountancy Corp. Really, we only have a few business days left before 2020 is in the rearview. Yes, my heart wants that to happen YESTERDAY, but my business brain wants it all. to. slow. down. Efficiency is on the brain for me. We have a bunch of clients emailing, especially Sierra Madre business owners, who want to make sure their PPP paperwork is done right, who want to make quick EOY moves (smartly), and some who are having to make very difficult decisions about shutting down operations, and the best way to do that. This year has been wild (to say the least). Just to recap, here is a quick-and-dirty list of EOY tax-related moves you can be making: Project your 2021 income (if you can) and adjust accordingly. Check your withholding. By now, probably just one more paycheck to get right. Spend down your FSA (if you have one). Give to charity — EVERYBODY (and I mean everybody) should give at least $300 — because even if you take the standard deduction, you can ALSO deduct up to $300 in charitable giving. Giving matters. Max out personal gifts — if you have means, you can give up to $15K tax free to a family member or friend. But that ends 12/31… as does your opportunity to max out workplace retirement accounts (if you have one). Also, last week I broke down the employee student loan repayment assistance in the CARES Act … and I dived into the code a little more, and realized there’s even better news: from what I can now gather, this provision applies not just to federal loans, but also to privately-refinanced ones as well. Which means that it’s even more broadly applicable. Could be a nice way to help your Los Angeles County employees … and to save big on taxes at the same time. These are the kinds of things Rodney really likes. 🙂 Shoot me a note or get on my calendar if you want to discuss any of the above before year end.626-357-9703 And, the other thing I REALLY like this time of year is, like I said, EFFICIENCY. I’m working on using these principles right now, and thought you might benefit from them too. Ross’ Guide To Getting Tasks Done“Time is too slow for those who wait, too swift for those who fear, too long for those who grieve, too short for those who rejoice, but for those who love, time is eternity.” -Henry van Dyke I’ve discovered a few tricks when it comes to getting tasks done through the day — and managing others who do so. Here are some little tactics I’ve found to be helpful:  Turn off cell phone alerts.Resist the temptation to stop what you’re doing every time your phone beeps with a new message. You’ll be better able to focus on tasks when you’re not constantly distracted and interrupted. Fine-tune your to-do list.When planning your day, add estimated times to each item on your to-do list. This will help you decide what to do first and what can be saved for later. Run two-minute drills.Every few hours, look at your list for tasks that can be done quickly–answering emails and phone calls, confirming appointments, and the like. Spend a few minutes clearing those away, and you’ll have more blocks of uninterrupted time to take on bigger tasks. Take regular breaks.You’ll burn out if you go full throttle for eight or 10 hours. Determine how long you can effectively concentrate on a single task (usually between 30 minutes and an hour, for most people). Take a break after that time–walk around, get out of the building, talk to coworkers–and you’ll return feeling refreshed. Let’s see if we can make these last couple weeks of 2020 create momentum that lasts into 2021, shall we? Get stuff done. To more of what’s yours, into your Sierra Madre business bottom line … Warmly,   Rodney Ross(626) 357-9703Ross & Associates Accountancy Corp   Feel free to share this article with a Sierra Madre area (or beyond!) business associate or client you know who could benefit from our assistance. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.

Now that we’re into June, it really does feel like summer is here. The air conditioning kicks in, the days are hotter … and, if you’re like me, “focus” becomes something I have to set myself towards. It doesn’t just “happen” — especially when the days are hot. It might be simply because tax season is now fully behind us, and we’ve already turned the page into year-round work. No matter the fact that we work with our Sierra Madre clients all year, there really is something very focusing about that April 15th deadline every year (or the 18th, in this year’s case). But as I said: focus is a decision. And whether you’re an employee, retired, a Sierra Madre business owner, or some other vocational expression — really, WHOMEVER you are — living a life of intentionality has never been more difficult. Devices, screens, “the internet of things” — all of it is pulling against our mind, our imaginations and our wills. Much of that influence is very positive, obviously (who doesn’t love ordering food with a click and a swipe??) … but it’s probably no big surprise that this digitally-overwhelming world can be a little distracting. Yes, this topic isn’t *exactly* financial, and clearly not tax-related. I don’t pretend to be any kind of “life coach”. But we like to see our role here at Ross & Associates as more than merely transactional. We’re in your corner, for all kinds of decisions that affect your finances — and this issue can certainly become a financial drain as well. So again … focus is a decision. And here are some things that might be hurting it for you. Focus Training For Folks In Sierra Madre“What’s right isn’t always popular. What’s popular isn’t always right.” -Howard Cosell Just because you work harder doesn’t mean that you are accomplishing anything of actual significance. In fact, many times it’s the opposite. Busyness does NOT equal effectiveness. Sometimes, you find that you are “working harder” because you have fallen into a pit of poor productivity and efficiency. What I have found to be helpful is recognizing how there are certain habits and practices that are very likely sucking all of the life-force from your day’s productivity. As an idea starter for focus training, here are four things that very well might be killing your momentum. For you, these might not be an issue, so I urge you, therefore, to consider what really is robbing your attention these days. These are not all merely related to DIGITAL OVERLOAD, either. But all of them are decisions — those that are made, and those that are avoided. 1. App AddictionIf you’re constantly checking Facebook, answering or originating random text messages, or have any social media account alerts turned on, you’ll never be as productive as you could be. One simple way to decrease your Facebook use is to remove the app from your phone. Even if you just use the browser to access it, it’s that extra step or two that it requires that can help your weaker self resist the constant dopamine hit of social media activity. 2. Email AddictionTurn off your alerts here, too. Don’t leave your inbox continually open when you are engaged in real work. Because whenever you click on that “Get Mail” button, your brain drip feeds small doses of Something-Important-Is-About-To-Happen-Juice (i.e. dopamine). Except, it’s hardly ever actually urgent. It can usually wait for your actual focused attention. So try this out for just one week and see if you don’t accomplish more than you thought possible. 3. Other People’s EmergenciesEmergencies aside, send your calls to voicemail first and return them only during set times (and perhaps even state those times on your voicemail greeting). This has three instant benefits. First, it tells people you are a focused person, which they will respect and even appreciate. Second, it makes you a focused person — keeping you on task and freeing you from interruptions you can’t anticipate. Third, you can determine if you’re the right person to handle the call or if it can be delegated. 4. DelegationAs I’ve said, there is a big difference between being busy and being productive. Want to know where you’re just “busy”? Keep track of everything you do every 30 minutes, every day, for one week. Then take all the items that aren’t moving you toward your goals and stop doing them, delegate them to someone else, or hire someone to do them for you. What will you do with all that extra time? Concentrate only on activities and processes that make money or move you ahead. The key to more productivity is not more work. The key is more focus. Creating your “Not To Do” List will reset your priorities, refresh your morale, and could even remake your career. Don’t let your best energy be sucked out of your day. I’m grateful for our chance to serve you and your family  — and we are dedicated to your thriving. Which means we want to protect you from all of what could tear you down… Warmly, Rodney Ross(626) 357-9703Ross & Associates