Your McCarthy Update
Marty McCarthy, CPA, CCIFP
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Focused on You. Dedicated to Your Success.
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February 1, 2021
McCarthy Thought Leadership and News
(CE This Week) Cash flow considerations in the bidding process. Profitable companies can become insolvent because of uneven cashflow. This could force a contractor to tap into a line of credit or take out a loan to continue operating and meet expenses. Learn what you can do from Rich Higgins to keep cash flow steady by taking it under consideration in the bidding process.
McCarthy & Company is included on NJBIZ’s list of top management consulting firms. The firm ranked number 14 on the list which was published on January 25, 2021. Read more.
Accounting and Tax News
(Journal of Accountancy) FASB simplifies revenue recognition for private company franchisors. Private company franchisors will be able simplify their revenue recognition accounting under a standard issued by the Financial Accounting Standards Board (FASB). The new Accounting Standards Update provides a practical expedient that simplifies how private company franchisors analyze certain activities when determining their performance obligations in a franchise agreement. Learn more and call McCarthy & Company.
(Financial Planning) Why the new 100%-of-AGI charitable deduction limit is not good tax planning. While many clients looking to make significant charitable contributions may do so primarily for altruistic purposes, maximizing the potential tax benefits of such contributions is often an important secondary objective — to the point that Congress actually limits the tax benefits available for charitable giving in any particular year through various percentage-of-AGI limitations on charitable tax deductions. Learn more.
(IRS.gov) Extension of relief for qualified opportunity funds and investors affected by ongoing coronavirus disease 2019 pandemic. IRS Notice 2021-10 provides additional relief for qualified opportunity funds (QOFs) and their investors in response to the ongoing coronavirus (COVID-19) pandemic. Read more.
(SmallBizAhead) The good news and bad news about the home office deduction. Read More.
Business News
(NJBIA) NJ makes $3.5 million in worker training grants available to employers. The New Jersey Department of Labor and Workforce Development (NJDOL) this week announced $3.5 million in funding is available to help employers upgrade workers’ skills through the UPSKILL: NJ Incumbent Worker Training Grant program. Learn more.
Construction and Real Estate News
(Construction Dive) ABC economist: 'Tougher times' may be ahead for contractors. “Some observers may say that the economic recovery that began in May 2020 is neatly in place, but that is simply not true,” Anirban Basu, ABC’s chief economist, said in the release. Basu said that the U.S. economy grew by 33.4% during the third quarter but was followed by slower growth to close out the year, pointing to further uncertainty for U.S. construction firms. Learn more.
(Construction Dive) Biden toughens Buy American rules.
(Construction Dive) Biden toughens Buy American rules. President Joe Biden signed an executive order on January 25 aimed at increasing government purchases of American-made products, a move that could affect construction firms that do business with the federal government. Most notably for contractors, Biden indicated the Buy American policies will apply to his massive plans for infrastructure and new energy projects. Read more.
(Construction Dive) Biden orders OSHA to beef up COVID-19 safety rules. President Joe Biden gave OSHA two weeks to issue new COVID-19 guidance, while considering a national emergency temporary standard that could provide a scorecard for workplace infections. Read more.
(Construction Dive) Industry Pulse: The latest construction data and statistics. The most recent data shows that construction spending is up, but jobs, starts and backlogs are falling. Learn more.
(GlobalST) Retail and hotels stall CMBS recovery. In December, the retail commercial mortgage-backed securities (CMBS) delinquency rate stood at 12.78% and hotels had a 19.87% delinquency rate. Read more.
(MarketWatch) Home prices are rising at the fastest pace since the Great Recession, price barometers show. Home prices rocketed at a fast pace yet again in November, according to two separate indices released Tuesday, making it increasingly more difficult for buyers to navigate the housing market as many states began reopening businesses from shutdowns related to the coronavirus pandemic. Recent data suggest price appreciation should gain steam in the latter half of the year. Learn more.
COVID-19 Related News
(Associated Press) The SBA takes steps to improve first draw Paycheck Protection Program loan review. The U.S. Small Business Administration is taking steps to improve the First Draw Paycheck Protection Program loan review so that small businesses have as much time as possible to access much needed PPP funds. Read more.
(Business.NJ.Gov) What is the status of the Small Business Emergency Assistance Loan Program (Phase 2)? Entities can pre-register for the Phase 2 Loan Program from the New Jersey Economic Development Authority (NJEDA) beginning 9:00 a.m. on Wednesday, February 10, 2021, by visiting the NJEDA’s application portal. The $10 million program will make direct low-cost financing available to help New Jersey small businesses and nonprofit organizations with recovery and reopening efforts because of COVID-19. You must preregister. Read more.
(Construction Dive) Firms denied PPP forgiveness can take tax credit, IRS says. Companies denied forgiveness of their Paycheck Protection Program loan can take a tax credit for the amount of proceeds they used to pay wages, the IRS said in a notice released last week. Learn more.
(CoStar) 2020 sets record for worst performance by U.S. hotels. The final figures are in for the U.S. hotel industry’s 2020 performance, and as expected, they show the industry hitting record lows amid the coronavirus pandemic. Learn more.
(Fast Company) SBA targeted advance. The Small Business Administration has provided additional details about the “targeted” advances that are part of the new round of COVID-19 Economic Injury Disaster Loans (EIDL). Unlike the previous advances, the new program will be eligible only to businesses located in low-income communities that can demonstrate “more than 30% reduction in revenue during an 8-week period beginning on March 2, 2020, or later.” Read more.
(IRS.gov) New law increases deduction limit for corporate cash contributions for disaster relief; IRS provides recordkeeping relief. The IRS explained how corporations may qualify for the new 100% limit for disaster relief contributions under the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (TCDTRA of 2020) and offered a temporary waiver of the recordkeeping requirement for corporations otherwise qualifying for the increased limit. Read more.
(IRS.gov) IRS updates FAQs on paid sick leave credit and family leave credit. The IRS posted updated FAQs about recent legislation that extended and amended tax relief to certain small- and mid-sized employers under the Families First Coronavirus Response Act (FFCRA). The FAQs are available at COVID-19 Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs. The updates to the FAQs cover how TCDTRA extends the availability of the tax credits created by the FFCRA to eligible employers for paid sick and family leave provided through March 31, 2021, as well as other amendments to the credits. Learn more.
(Philadelphia Business Journal) Going for a new PPP loan? SBA revises rules on employee and owner salaries, bonuses. Small businesses are still limited to $100,000 salary caps, annualized over the period during which the business spends the PPP loan proceeds. But the covered period, which used to be a choice between either eight weeks or 24 weeks, is now any number of weeks between eight and 24, which means every small business will have to carefully watch its spending. Learn why.
(Philadelphia Business Journal) Pennsylvania Senate passes $912M pandemic aid bill, including funds for hospitality industry. The Pennsylvania Senate on Wednesday unanimously passed a measure that would allocate $145 million in grants to small businesses including taverns and restaurants throughout the state by establishing a Hospitality Industry Recovery Program. Read more.
(Reuters) U.S. consumer confidence edges higher; house prices accelerate. U.S. consumer confidence rose moderately in January while lingering concerns about the COVID-19 pandemic led to a further deterioration in households’ perceptions of the labor market, raising the risk of a second straight month of job losses. Learn more.
(Reuters) U.S. workplace safety agency issues new COVID-19 guidance for employers. The U.S. Department of Labor office that enforces workplace safety laws on Friday encouraged employers to take additional steps to protect workers amid the COVID-19 pandemic. Read more.
Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at Richard.Higgins@MCC-CPAs.com. I can be reached at Marty.McCarthy@MCC-CPAs.com. As always, we are happy to help.
Stay safe,
Marty McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
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