Answers 4 Advisors - March 19, 2021

Asked and answered in the Woodard Alliance: 

How Are Accounting Advisors Charging for Employee Retention Credit (ERC) Work? 

Q. Is anyone doing ERCs for their clients and/or for non-clients? If so, how are you charging?

A1. I’m trying to figure that out myself.  

I've spent and will continue to spend hours watching free and paid webinars from many respected CPA firms, and they disagree with a few items. One being taking advantage of the poor wording around relatives of owners, but the referenced regs (written in 2005) do not mention the corporate owner or owner spouses. My husband’s regional firm says to run with it quick and before they clarify it. Another group changed from a yes to a no after consulting with seasoned IRS contacts.  

Another group addressed ways to allocate wages between ERC and PPP. There is zero guidance there, so they suggested using four methods and pick the best calculation for the client. (Our job, right?) Actual, high/low, straight line or weighted average. That produces fantastic results but is time-consuming. 

New multiple owner business aggregate rules may be an issue and brings a lot of money to the table.  

The last 102-page IRS notice helped, but the FAQs have not been updated and now we have more law coming.  

Bottom line, done well, this service is valuable. My first calculations for the first quarter will bring over $100,000 for one client, even if I exclude the corporation’s principal stockholder and his son. His will be the most work, and subsequent clients will get faster and easier. I told him that I will not bill him hourly, but I’m struggling with it. -Sara Laidlaw Woodruff, Accounting Services Bureau Inc., Savannah, Ga. 

A2. We have multiple clients that will qualify. We’re still waiting on clarification on several things. As far as charging it will depend on the size of their payroll. Most of our clients that are eligible have minimum wage employees so it takes multiple quarters and work around the PPP before they will reach the $10,000 in wages for 2020 or the $14,000 in 2021. Lots of spreadsheet action. -Teresa Mosey, JD & Associates Inc., Bremerton, Wash. 

Can Bank Feeds Be Imported Manually Into Sunset Versions of QuickBooks? 

Q: If you’re using an older sunset version, for example 2017. Can bank feeds be imported manually? Or is that ability completely removed once software has sunset? 

A: I tried to import a bank feed on 2017 and it didn’t work. I had to manually enter all transactions (they only had about 15 per month). I’m Not sure if there’s a workaround that would get them in there as I only use desktop for this one client. -Charissa Samco, Above LLC, Verona, Pa. 

How Do I Book My Client’s Cryptocurrency Transactions? 

Q: I have a client who has the ability to pay with and loan from his bitcoin. I don't know how to account for this. 

A: Yes! Generally, we book crypto asset transactions in USD at the fair market value (FMV) of the crypto asset at the time of transaction. For a few transactions, manual entry isn't so bad. For larger volume, it's worth looking for an automated crypto accounting platform to track transactions and integrate with business accounting software. The answer also depends on whether crypto assets themselves belong to the business or the business owner. -Name withheld

May Amounts to 1099 Subcontractors Be Used in “Second Wave” PPP Loan Applications? 

Q: My client wants to use the amounts he paid to 1099 subcontractors in 2019 in consideration for filing his "second wave" PPP Loan application. Is this allowed according to the PPP guidelines? 

A: No, it is not as the contractors can potentially apply on their own accord and as such, if they do, it would be double dipping the PPP system on the same money. -Cathy Volk, Accountable Business Solutions, Warsaw, N.Y.