Tag Archives: EJK Accounting

01.18 2021

Second PPP Loan

New COVID relief bill, Paycheck Protection Program passed congress on December 22. A second PPP Loan will be available. Here is a guidance you need to know.

 

Who is eligible for a second PPP loan?

Similar to the initial PPP loan, eligible small businesses may include:

Small businesses, Non-profit organizations, Sole proprietors, self-employed individuals or independent contractors

Addition to this, applicants must also meet the following

  • Businesses were in operation prior to February 15, 2020.
  • Businesses has a loss in revenue in 2020, which must be proved a 25 % or more reduction in gross receipts from any quarter in 2020 relative to the same quarter in 2019.
  • Businesses may not have more than 300 employees.
  • Businesses have used up or will use the full amount of their first PPP loan

SBA will provide further guidance such as application processes and required documentations. For the time being, let’s talk learn about any changes made and how those changes could affect you.

PPP Eligible expense list are added

  • Operational expenses

Payments for software, cloud computing, accounting needs and other human resources

  • Supplier costs

Expenditures any purchase order, or order for goods made prior to getting a PPP Loan essential to operate

  • Property damage costs

Property damage costs due to public disturbances that occurred during 2020, which are not covered by insurance

  • Worker protection expenses

Any personal protection equipment or property improvements and adaptive investments to help a borrower comply with COVID-19 related safety guidance during the period from March 1, 2020 onwards.

PPP expenses are tax deductible

Any expenses covered by a PPP loan can be claimed as tax deductible. The forgiven amount of PPP loans will not be included in taxable income.

 

12.29 2020

Form 1099-MISC

What is Form 1099-MISC?

Form 1099-MISC is to report payments made in course of a trade or business to non-employee. Although the 1099MISC is still in use, contractor payments made in 2020 and beyond will be reported on the new form 1099-NEC.

Form 1099-Misc and Instructions

 

 

 

  • Rents (Box 1)

Enter amounts of $600 or more for all types of rents

 

  • Other Income (Box 3)

Enter other income of $600 or more required to be reported on Form 1099-MISC that is not reportable in one of the other boxes on the for

 

  • Gross Proceeds Paid to an Attorney (Box 10)

Enter gross proceeds of $600 or more paid to an attorney in connection with legal services (regardless of whether the services are performed for the payer)

 

  • Fishing Boat Proceeds (Box 5)

Enter the individual’s share of all proceeds from the sale of a catch or the FMV of a distribution in kind to each crew member of fishing boats with normally fewer than 10 crew members. A fishing boat has normally fewer than 10 crew members if the average size of the operating crew was fewer than 10

 

  • Medical Payments (Box 6)

Enter payments of $600 or more made in the course of your trade or business to each physician or other vendor or provider of medical or health care services. Include payments made by medical and health care insurers under health, accident, and sickness insurance programs. If payment is made to a corporation, list the corporation as the recipient rather than the individual providing the services. Payments to persons providing health care services often include charges for injections, drugs, dentures, and similar items. In these cases, the entire payment is subject to information reporting. You are not required to report payments to pharmacies for prescription drugs

 

  • Direct Sales (Box 7)

Enter an “X” in the checkbox for sales by you of $5,000 or more of consumer products to a person on a buy-sell, deposit-commission, or other commission basis for resale (by the buyer or any other person) anywhere other than in a permanent retail establishment. Do not enter a dollar amount in this box. The report you must give to the recipient for these direct sales need not be made on the official form. It may be in the form of a letter showing this information along with commissions, prizes, awards, etc.

 

  • Substitute Payments in lieu of dividends or interest (Box 8)

Enter aggregate payments of at least $10 of substitute payments received by a broker for a customer in lieu of dividends or tax-exempt interest as a result of a loan of a customer’s securities. Substitute payment means a payment in lieu of (a) a dividend, or (b) tax-exempt interest to the extent that interest (including original issue discount) has accrued while the securities were on loan. For this purpose, a customer includes an individual, trust, estate, partnership, association, company, or corporation.

 

  • Crop Insurance Proceeds (Box 9)

Enter crop insurance proceeds of $600 or more paid to farmers by insurance companies unless the farmer has informed the insurance company that expenses have been capitalized under section 278, 263A, or 447 of Instructions for Forms 1099-MISC and 1099-NEC.

 

  • Excess Golden Parachute (Box 13)

Enter any excess golden parachute payments. An excess parachute payment is the amount over the base amount (the average annual compensation for services includible in the individual’s gross income over the most recent 5 tax years). Find additional detail on page 11 of the Instructions for Forms 1099-MISC and 1099-NEC.

 

  • Federal tax withheld (Box 4)

Enter backup withholding. For example, persons who have not furnished their TINs to you are subject to withholding on payments required to be reported in box 1. For more information on backup withholding, including the rate, see Instructions for Forms 1099-MISC and 1099-NEC

 

12.28 2020

Bank Reconciliation

First, what is a bank reconciliation?

When you reconcile your bank account or statement, you compare your internal financial records such as bookkeeping records against the records provided by financial institutions.  A monthly reconciliation helps your business to detect discrepancies and errors as well as identify any unusual transactions that might be caused by fraud actions. In other word, this practice can help your business inefficiencies in accounting procedures.

 

         How often to reconcile bank statements?

Many business performs monthly bank reconciliation for identifying problems. It is the best to have a regular schedule and save bank statement or other related document for avoiding time-consuming task.  Some businesses with a lot of transactions, reconcile on a daily basis.  If something does not match with your record against bank statement, it might be due to timing differences that items or checks have not yet cleared. However, bookkeepers and accountants should be able to explain those differences.

 

Once you have figured out the reasons why bank statement and records do not match up, you need to record them by making adjusting journal entries.

 

Best Bank Reconciliation Practice and Tips

To reconcile bank accounts, you need to compare your internal record of transactions, balances, and descriptions to your monthly bank statement. Make sure matching the amounts and stating any memo or note for differences that requires more investigation and detail.

 

11.24 2020

Responding to COVID-19

 

EJK Accounting & Tax Services is committed to caring for the health and well-being of our clients and teams. Due to the new restrictions to navigate COVID-19, our office will remain open with the same office hours and limited capacity to come in.

 

  • Limits for Clients

To support our clients and their businesses through this difficult situation, communication is key. If you have any questions and need any helps, please make an appointment and let us know by emailing [email protected] or calling 2065470497.  Our team will read and respond to every message we get. We continually look for ways for all of us to navigate this situation with empathy and passion.

  • Remote Workforce

Due to limited capacity in the office, remote working is a temporary agreement for teams to work from a non-office location for more than three days. We will maintain and improve interoffice communication between clients. Feel free to contact us!

 

08.21 2013

Happy birthday to our founder!

EJK Accounting & Tax founder, EJ Kim, on her birthdayEJK would like to wish EJ Kim a special happy birthday this year! EJ has been our company backbone for the last 10 years, and we’re looking forward to many more birthdays to come.

Thank you to our staff, friends and family who helped us celebrate EJ, and to Dorrie for the delicious food.  We also enjoyed seeing our favorite clients at the party, including Revolver Vintage, Save Our Wild Salmon, the Service Board, and Win/Win.