Dogra CPA LLC

Tax Alert: Consider a Roth 401(k): Your money can now grow tax-free for longer.

1st Advantage: It's now easier to avoid required minimum distributions (RMDs) and maintain your Roth 401(k) balance throughout retirement thanks to a change in tax legislation. RMDs from Roth 401(k)s were required to be taken by retirees beginning in their early 70s until this year. With effect from 2024, the Secure 2.0 law of 2022 did away with that necessity.

2nd Advantage: Roth 401(k)s also have no income restrictions for contributions. That could make them appealing for high-income earners.

3rd Advantage: Most non-spouse heirs won’t have to withdraw the full balance until the end of the tenth year after the original owner’s death; spouses get a longer timetable.

In summary, a Roth 401(k) can accumulate more wealth without incurring taxes, which is advantageous to you and your heirs.

Tax Alert: 2021 YEAR-END TAX PLANNING FOR INDIVIDUALS

As we wrap up 2021, it’s important to take a closer look at your tax and financial plans. This year likely brought challenges and disruptions that significantly impacted your personal and financial situation.

Here’s a look at some issues to consider as we approach year-end:
See More: https://bit.ly/3wVGfi8

Small Business Relief Alert: Forgivable PPP Loan Reopens Today

The SBA is reopening today its forgivable PPP loan program for new borrowers and second round for certain existing borrowers.

Initially, only community financial institutions will make First Draw of PPP Loans today, January 11, and Second Draw of PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter.

Eligibility criteria for borrower:

The borrower has no more than 300 employees and experiencing at least a 25% reduction in gross receipts in a quarter between 2019 and 2020.

Also, the borrower, who previously received a First Draw of PPP Loan, will or has used the full amount only for authorized uses.

The maximum amount that can be borrowed this time will be $2 million. The deadline to apply is March 31.

The SBA will forgive the loan if all employee retention criteria are met, and the funds are used for eligible expenses.

COVID-19 Alert: Federal Reserve Begins Main Street Lending Program

The long-awaited Main Street Lending Program (MSLP) is now underway. The Federal Reserve opened lender registration on June 15 and encouraged lenders to begin making Main Street program loans as soon as possible upon registration. Businesses may receive a MSLP loan in addition to their PPP loan. However, unlike PPP loans, MSLP loans are full-recourse loans, and no amount of the loans are forgivable.

The MSLP is generally comprised of three types of loans:

1. Main Street New Loan Facility (MSNLF) Min: $250,000, Max: Lesser of 4 times EBITA of 2019 or $35 million

2. Main Street Priority Loan Facility (MSPLF) Min: $250.000, Max: Lesser of 6 times EBITA of 2019 or $50 million

3. Main Street Expanded Loan Facility (MSELF) Min: $10 million, Max: Lesser of 6 times EBITA of 2019 or $300 million

Terms:
• Five-year maturity
• Principal payments deferred for two years and interest payments deferred for one year
• Adjustable rate of LIBOR (one- or three-month) plus 300 basis points)

Disclaimer: This post contains no tax, legal, or financial advice.

COVID 19 Update: This new bill would allow small businesses to get second PPP loan

Certain small-business owners may be able to apply for a second Paycheck Protection Program loan if a new bill introduced on June 18 becomes law.

The legislation, called the Prioritized Paycheck Protection Program (P4) Act, would allow businesses with fewer than 100 employees to apply for a second loan if they have used up (or are on way to exhaust) their first PPP loan and can show a 50% loss in revenue due to the COVID-19 pandemic. Business owners also must show they need the money for payroll and eligible non-payroll costs.

The bill would also extend the application deadline for PPP loans from June 30 to Dec. 30. And the deadline for a second loan would be Oct. 1. The SBA Administrator would have the discretion to extend the deadline if needed.

Disclaimer: This post contains no tax, legal, or financial advice.