NEWS from MHC’S INDUSTRY PROFESSIONAL MEMBERS
TAXES IN A TIME OF COVID Tips from MHC member and certified public accountant Nikkie Wingire (Capette LLC)
Did your business receive a PPP loan? What you need to know!
• • •
The federal government has clarified that expenses paid with PPP forgiv- en funds are tax deductible.
The government has also confirmed that forgiven PPP funds are not considered to be taxable income as other types of canceled debt typically are.
If you received PPP loans in the first round, you must apply for forgiveness within 10 months of the end of your coverage period. For example, if your loan coverage period is 24 weeks, from June 1 to Nov 16, 2020, you have until September 16th, 2021 to apply for forgiveness.
If you do not apply for forgiveness you will have to begin paying on the loan. •
Bookkeeping Tip: Once your loan is forgiven be sure to move your PPP Loan from your Balance Sheet to your Income Statements as “PPP Grant Income” and let your tax accountant know.
Are you working from home? If you are a W-2 Employee, and you normally work at your employ-
er’s location but you have been working from home due to the pan- demic, unfortunately you CANNOT deduct home office expenses on your tax return for working from home.
Did you collect unemployment? If you received unemployment payments, remember these are tax- able and all taxes will need to be paid by April 15th. Remember, exten- sions only extend the time to file, not the time to pay.
Are you self-employed? If you have a home office be sure to provide your tax preparer evidence
of expenses that can be deducted for home office expense, including: •
deduct your kitchen)
• Utilities (Power, Internet, Gas) • • • •
Talk to your tax preparer for other possible eligible expenses If you use a personal vehicle you can deduct the mileage on your tax
return. To deduct your mileage you need to keep a log of your mileage that includes your odometer reading at the beginning and end of the year, and total mileage used for business purposes. Also, last but not least, talk to your tax preparer about your eligibility to claim a fuel credit for fuel used on the farm.
Landscaping (If you have clients visiting your house) Repairs
Square footage of your house and square footage of your dedicat- ed workspace (your work area must be dedicated space, you can’t
MARCH MEANS MINDING YOUR OWN BUSINESS Tips from MHC member and sponsor Mid-Atlantic Farm Credit
Budgeting is a process of estimating costs and income, while pro-
jecting your net profit. Taking the time to craft a budget allows you to create a roadmap on how you plan to spend your money and what earning potential you plan to achieve.
When should I start budgeting or create a budget? NOW! As you wrap up your finances for 2020, it’s the perfect time to
review the status of your budget and make projections for the coming year. That way you’ll have a full year’s worth of data to pull from to set yourself up for a new year of recordkeeping. If you missed your open- ing for this at the end or very beginning of the year, that’s okay. It’s never too late to start keeping track and thinking about your business’ financial health. But now is a great time!
Why do I need a business budget? It’s a good best management practice to make an annual budget to
better understand the overall picture of your finances. Building a bud- get for your farm business will help you plan for the future, evaluate opportunities for saving, and reveal potential opportunities to invest in your operation. If you want to run a profitable and resilient business, build your budget and keep these five tips in mind.
Simple budgets can be prepared using the following formula:
Total Projected Income – Total Projected Expenses = Projected Net Income
TIP #1. Identify Your Goals Each year, it’s important to identify the business goals that are im-
portant to you, while keeping in mind your projected long-term in- come and expenses. You may have many ideas for growing with your current market or ways to enter new markets, but you’ll need capital resources to make either of those moves. Do you want to add an in- door? Get a new tractor? Upgrade to a 6-Horse Trailer? Making realistic and timely projections is important to the overall budget process so you can adequately plan to save and manage your liabilities simulta- neously.
TIP #2. The Act of Discipline You are disciplined about how you care for and exercise your hors-
es. Managing your business or personal finances with discipline is a valuable skill-set. Whether you are a business owner or simply manag- ing your personal finances, it is important to be able to identify both essential needs and wants on your expense list. It is important to ask yourself: Is this an expense I can and/or should afford? Making good decisions and taking an honest approach to your business choices will help you to be more successful in budgeting for the long-term.
TIP #3. Do Your Research When you prepare your budget, determining your estimated annu-
This feature is a benefit for MHC Industry Professional Members. To learn more or submit news & updates, contact Business Network Co-Chairs Jane Seigler & Crystal Brumme Pickett at IndustryNews@mdhorsecouncil.org
52 | MARCH 2021 | THE EQUIERY A MARYLAND HORSE COUNCIL PUBLICATION BECOME A MEMBER • JOIN.MDHORSECOUNCIL.ORG
800-244-9580 | www.equiery.co
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