Latest / The SmallBizChat with Melinda Emerson / Understanding PPP Loans with Dawn Brolin

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Understanding PPP Loans with Dawn Brolin · The SmallBizChat with Melinda Emerson

• 0:00
  3, 10, 1, 0, ignition, liftoff,
• 0:08
  Ending small business failure.
• 0:11
  Welcome to the Small Biz Chat podcast with a number 1 small business expert Melinda Emerson.
• 0:17
  Bolinda's goal is to end small business failure, and she'll give you the information
• 0:21
  you need to succeed and live the life you've dream of.
• 0:25
  Now here's the small biz lady herself.
• 0:29
  Melinda Emerson.
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  Hi, everybody.
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  I'm Melinda Emerson, the small biz lady.
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  And what come to Small Biz Chat.
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  I'm America's number one small business expert from 1 Emerson, and I am so excited to be here
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  with you all.
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  So, you know, small Biz Chat Live is a peer to peer interview show that gives small business
• 0:48
  owners a way to really get and share invaluable business advice.
• 0:52
  The mission of small business chat is to end small business failure.
• 0:56
  Our goal is to give small business owners an opportunity to hear sage advice from multiple
• 1:02
  angles so that you can not only start a business but grow your business.
• 1:07
  So with that, I wanna invite my guess Don Bollin in because I wanna introduce your you
• 1:12
  guys to her and tell you a little bit more about her.
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  Don Bollin is a certified public accountant, and she's the managing member of a powerful
• 1:21
  accounting, Inc, which is a nationally recognized accounting tax and consulting firm
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  She's also a speaker, and she brings an entertaining style and rockstar energy to
• 1:32
  audiences about all things faith, you know, finances, numbers, accounting, that is Don's
• 1:39
  thing.
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  So, Don, thank you so much for coming and using us here on small fish chat live.
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  Melinda, as always, it's my pleasure.
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  Anytime, Melinda says, hey, you available.
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  It doesn't matter what I was doing because the answer's yes.
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  Oh, you're so sweet.
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  Well, listen.
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  So let's get down to it.
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  A lot of stuff is going on with small business owners and their finances right now.
• 2:01
  Cash is king more than it has ever been.
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  Right?
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  Absolutely.
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  Absolutely.
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  It is.
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  And you found when COVID, you know, crept up on us back in March, April was kinda where it all
• 2:14
  really fell apart.
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  But you noticed that the government's just trying to feed small businesses money because
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  without cash, you are not in business.
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  You don't have money.
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  You have no reason to open your doors.
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  Right?
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  So we've seen the government step up, which I think has been great in a lot of ways to help
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  small businesses continue to move forward and most importantly to continue to employ their
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  employees I think for me, the PPP loan is probably the best option that small businesses
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  have had.
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  And, actually, they even had it up until August 8.
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  So they expect expanded and extended the ability for people to get the PPP loan.
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  And so it's it's just there's an interesting little little things that I learned from my
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  different clients about how they're using the money properly and how they're using it the way
• 3:00
  they're supposed to use it.
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  Are they bringing back employees?
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  And there's there's so many.
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  I spent 3 hours on a webinar learning about the different forgiveness and the different things
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  that can be done.
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  But we're gonna talk about that in a minute, but let's talk about how the PPP loan went down
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  because I don't know about you But the first round of the PPP loan met left a rather bitter
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  taste in my mouth, especially when I found out that 71 fortune 500 companies call buy for
• 3:27
  money and over $300,000,000 went to those kind of companies.
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  And then you hear about the Lakers got money.
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  Then you hear about you know, the the big private prep school's gotten money, you know,
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  like, because they let nonprofits, because they really weren't specific enough about who could
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  get the money.
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  The people that had the more savvy accounting and CFO set up, those people swooped in and got
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  1,000,000 of dollars.
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  Let alone all the PPP fraud that's been going on out there, which is really, really made it
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  hard.
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  It's really sad.
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  And I'm also a certified fraud examiner, so that just like bites my ear to to know.
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  And I know this.
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  One of the other things along with the larger companies and corporations that got this money,
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  which we all know is absolutely ridiculous.
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  Those people are being investigated and will be investigated because there are a couple things.
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  Number 1, there are also small business owners who took the loan and didn't do the right
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  things with them.
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  So whether it was a $10,000 loan or a $100,000 loan, you know, they just figured, hey.
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  I can pay my mortgage now.
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  I'm chilling, and that's that's a fraudulent fraudulent way to spend that money.
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  That wasn't the intention.
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  But at the same time, we are finding that the the small businesses who are either sole props.
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  Right?
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  So these guys are just the they're themselves.
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  Maybe they have a few subcontractors, but they really they rely on their own income to support
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  their family.
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  And there was not a lot of guidance in that first rollout that people who didn't receive a
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  w 2 didn't think they qualified because historically, they never have been eligible for
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  anything.
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  Right.
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  Right.
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  Right.
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  I
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  mean, it's like an act of god for them to get a a mortgage because Yeah.
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  Because they
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  have a schedule.
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  Their income, right, But but let's talk about this, though, because I know only 5,000,000
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  small business owners got PPP loan money.
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  Right?
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  Yes.
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  And we know that there's, like, 28,000,000.
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  Right.
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  So, Dawn, okay, talk to me about why that happened?
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  Because I listen.
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  I filled out PPP paperwork too for my business.
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  Sure.
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  And I've been in 21 years.
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  So I had a lot of that paperwork, but I know that there was a 941 form you had to upload in
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  order to do the calculation for your PPP loan.
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  And a lot of people out here don't know what a 941 is.
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  So I need you to kinda walk us back to some of the paperwork you have to have to qualify for
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  some of this some of these resources.
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  Yeah.
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  And and I love that we're talking about this this it's not even postcode, but we're still in
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  the middle Right?
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  We're we're we're not even close to where we need to be.
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  So rolling back and saying, okay.
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  What could you have done?
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  Let's start with that.
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  What could you have done?
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  What you could have done, number 1, is reached out to an accounting professional.
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  Many small business owners, I picked up around 75 or 80 new clients in the last 3 months.
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  And the reason for that was many of them, and I would say the majority of them were self
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  preparers because they go online or they go watch TV and they see the commercial for
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  TurboTax and H And R Block do it yourself taxes.
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  And when they do that, You don't have that connection to an accounting professional to
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  help guide them.
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  And if they had an accounting professional 3 or 4 months ago, and they reached out by phone and
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  said, hey, I need to I need this money.
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  I need to support my family.
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  I'm a sole prop.
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  I've been preparing taxes myself forever.
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  I'm ready to change because guess what?
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  The world will never ever be the same after COVID period.
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  And because of that, if you're a small business owner, You need to change the way you approach
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  your business, and we've talked about that before.
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  You're in business.
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  You're not in a hobby.
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  So what you need to do is get serious about your business, get serious about the paperwork
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  that you're talking about.
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  If you reached out to an accounting professional, we were nonstop learning and
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  learn daily about the changes in PPP and that's what we were there for.
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  And when you apply, you can actually put in the fee that the accounting professional would get
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  paid with that PPP loan and be part of the forgiveness.
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  A lot of they didn't roll that out right in the beginning because even a lot of us didn't even
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  know about it.
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  But I guess my message to the small business owners.
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  What happened back then is so many business owners rely on themselves because they don't
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  think they have the money to what they think is spending on a an accounting professional.
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  Really, it's investing in your business.
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  So I say to people, like, getting your documents together.
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  I use something called Smart Vault.
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  We've talked about it before.
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  You could use Dropbox.
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  You can use share file.
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  It doesn't matter.
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  What have a tory for your documents that are most critical to your business.
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  You have all of your accounting records.
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  If you have it in Excel, that's not gonna be good enough people.
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  So to help look back to say how can I fix moving forward, I would say don't do the same
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  thing you did prior to COVID because guess what?
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  That is called insanity.
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  And if you don't get a PPP loan, that's on you.
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  Alright.
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  But let's talk about the paper.
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  Right?
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  So we okay.
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  So we know we need to door of this paperwork, but what needs to go in the vault.
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  Right?
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  Tell me what needs to go in the vault.
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  I know my taxes.
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  I know my personal And my business taxes, usually, you gotta produce, like, 2 years of
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  that.
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  Right?
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  No.
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  Absolutely.
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  2 years of personal and business taxes.
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  But what else?
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  There's some other kind of documents Sure.
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  Have been asked to produce.
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  Right.
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  Yes.
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  So things like if you're a sole prop and all you receive, you do a schedule c.
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  It's highly likely that you're receiving some kind of a 1099.
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  Either from your customers, a 1099 k from, say, PayPal, if you have a business account, Venmo,
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  if you have a business Venmo, merchant account.
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  If you have a merchant account collecting credit cards and e checks, which if you don't
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  have that yet, you have lost your coconut.
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  Like, you might as well just take your head off, clean it off, and put it back on because
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  if you're not accepting payment methods of any capacity besides children, which we know we're
• 9:13
  gonna talk about the kids, we don't want them.
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  We want the money.
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  So paperwork like a 1099 k.
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  Paperwork like any kind of annual report that reporting mechanisms that come back to you.
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  Now Ignoring the PPP COVID a little bit, all of those source documents that you had to prepare
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  those tax returns, whatever you either gathered for yourself because you self prepared or you
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  provide it to the accountant, have all of those documents available because if you recall with
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  PPP, they said, okay.
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  If you're a sole prop, you're gonna have to upload a 1099.
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  It's highly unlikely that if you're a sole prop, unless you're selling things, you're
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  gonna get a 1099 from service for services.
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  Sure.
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  And I think now more than ever, you better ask for 1 because you need to have that.
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  You definitely do, but I think one of the other things you've gotta think about is I see people
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  being asked for their articles of incorporation.
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  I see people being asked for their actual EIN number from the IRS that made them a business.
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  A CP575.
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  Exactly.
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  And I'm also the 941 form that we were talking about That's a payroll form.
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  Right?
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  If you pay yourself with a paycheck, which you should if you're a certain kind of business,
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  right, if you're an s corp, Yes.
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  You're a C corp.
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  Yes.
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  If you're a single member LLC, you're not allowed to
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  pay with the paycheck.
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  Right?
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  Right.
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  And if you're a partnership, you should have your k 1
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  Okay.
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  From the partnership available.
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  And, yes, if you not only if you just pay yourself, and that's a good point, but if you
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  have employees, what if you're a schedule c and you don't you didn't put yourself on payroll,
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  you didn't esc or whatever, but you have employees, all of your payroll records, your
• 10:47
  sales tax returns, any governmental filing that you've ever done, whether it's with the
• 10:53
  secretary of the state, whether it's an EIN, unemployment numbers, all that stuff.
• 10:57
  I would put that we call it permanent file.
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  So we put a permanent file together.
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  And so and with that is all of those documents we just talked about.
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  And you have you not just your accountant, but you should have them too.
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  Well, and I also know that some of the grant programs that have come out since the PPP loan
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  are requiring a lot of these documents as well, particularly for I've seen some of the grant
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  programs come out for women businesses.
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  There's certainly several that have come out for African American business owners, and
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  you've gotta have this paperwork for a lot of those documents.
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  For a lot of those opportunities as well.
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  So you've gotta have it in PDF format.
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  You gotta be able to get it quickly.
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  Because some of these loan programs are closing in 24 to 48 hours.
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  They're not playing with people.
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  They know they don't have enough resources.
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  So it's a first come, 1st serve basis.
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  So it's really important.
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  But I think even to step back even more than that, Dawn, just every small business owner
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  need someone monthly reconciling their books.
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  For the love of everything that is good in this world, if you are in business, you should have
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  accounting records.
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  Accounting records aren't a copy of your bank statement.
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  That doesn't count.
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  That's it is a source document to your accounting records.
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  Absolutely.
• 12:08
  But you should QuickBooks online costs $8 a month for the simple starts where I say 8
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  bucks.
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  Around that.
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  For simple start, quickbooks online.
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  It's not expensive.
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  It's not complicated.
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  You can outsource the bookkeeping fairly reasonably.
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  I refer people to out of the box technology.
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  They have great bookkeepers.
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  They can handle the bookkeeping at a very reasonable price.
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  And think about it.
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  If you for those of you who don't have an accounting record, or don't have that
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  accounting system.
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  You may have missed out on the PPP loan because you didn't have it together.
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  So don't repeat your mistakes from the past, learn from them.
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  That's what that's all about.
• 12:46
  And don't get mad about it, but I can tell you the SBA 7a There's an a small business loan, a
• 12:51
  7 a loan that is still available through.
• 12:53
  I think it's September 24th is the date.
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  So people have the ability to borrow money from the SBA at a very low interest rate right now.
• 13:00
  And you have until September 24th.
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  So if you haven't received or or applied for anything, you still have the ability to apply
• 13:08
  for that loan and take the opportunity to use that as your process to get your stuff in order
• 13:14
  now.
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  So it's not like you've totally missed the boat because you haven't.
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  Alright.
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  Well, I think that's great.
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  Now what
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  I wanna do is I wanna take a break right now.
• 13:21
  And when we come back, we're gonna talk about PPP loan forgiveness and the paperwork around
• 13:28
  that.
• 13:29
  If you got PPP loan money, I wanna make sure you don't have to pay it back.
• 13:33
  We're gonna talk about that and more with Don Bollin When small fish chat comes right back,
• 13:38
  stay with us.
• 13:42
  Hi.
• 13:45
  Melinda Emerson small biz lady.
• 13:47
  I know you might be thinking about quitting your business and going back into corporate
• 13:51
  America, but wait.
• 13:52
  Before you give up, my new book fix your business could give you a whole new lease on
• 13:56
  life.
• 13:57
  My twelve piece of running a successful business will walk you through step by step how
• 14:01
  to grow your business revenue.
• 14:03
  How to hire great people and streamline your processes and so much more.
• 14:08
  Grab a copy today, affix your business, and get your life back.
• 14:14
  Hi, everybody.
• 14:15
  I'm Melinda Emerson, the small business lady.
• 14:17
  Welcome back to Small Bishop.
• 14:19
  We've been talking with Don Brolin, CPA powerful accounting.
• 14:23
  And she is talking to us about how we all need to tighten up our finances when we come out of
• 14:30
  this COVID pandemic thing.
• 14:32
  So, Don, I wanna get back to you and talk about this this PPP loan forgiveness is like a
• 14:38
  spaghetti western mess, like trying to figure it out.
• 14:41
  And I feel like they keep changing the rules, like, every other day.
• 14:45
  And then I just read something the other day.
• 14:48
  And in this next relief package that they're still fighting over that they can't agree
• 14:52
  about, that if you got a 150,000 or less, might say you won't have to do the paperwork.
• 14:57
  Is that is that true?
• 14:58
  Are you are you hearing that stuff too?
• 15:00
  That's the rumor on the street rumor on the street.
• 15:03
  And I and I love that you say that because It's so true.
• 15:06
  We are I get email notifications every time there's an update.
• 15:09
  And how many do I get?
• 15:10
  1 or 2 or 3 a day.
• 15:12
  They're saying now that, like you were saying, that don't, you know, don't worry if it's 150
• 15:16
  unless we're not gonna worry about it.
• 15:19
  I kind of don't agree that that's gonna happen.
• 15:22
  I think that's wishful thinking based on what they've provided us so far, is what appears to
• 15:28
  be, which I love that.
• 15:30
  You know, there the appearance is that it's a simple 123 page little application.
• 15:36
  But what what the real deal is with the loan forgiveness, at least what we know today is
• 15:41
  that everything that goes on that small app forgiveness application has miles of paperwork
• 15:46
  behind it to support what goes on that application.
• 15:50
  And that's what they're not telling people.
• 15:53
  So at least, again, of what we know today is we're so we have the accounting profession has
• 15:58
  nailed it, and we people on the ground, Blum Shapiro, some of the bigger firms who have
• 16:03
  people specifically focusing on PPP loan, but the application process is different for each
• 16:10
  bank.
• 16:11
  Now here's where the pro here's where it gets sketchy.
• 16:13
  You send your forgiveness paperwork to the bank or whoever the occupants, whoever sent you who
• 16:18
  got whoever got the loan from.
• 16:20
  You you are gonna deal with that bank.
• 16:22
  You're not dealing with the SBA.
• 16:24
  Okay?
• 16:24
  The banks are dealing with the SBA.
• 16:26
  So you submit your application.
• 16:28
  They go through it.
• 16:29
  They probably don't even know what they're looking at.
• 16:30
  Just as an FYI because bankers are not accountants.
• 16:33
  Just get that out there.
• 16:34
  But then the bankers are gonna submit it to the SBA.
• 16:37
  So the bankers will say, cool.
• 16:38
  This looks good.
• 16:38
  Send it to the SBA.
• 16:39
  The SBA makes the decision.
• 16:41
  Now 2, 3, 4, 5 months from now when all those applications are being processed, we have our
• 16:46
  we have our, obviously, new year of election this year.
• 16:50
  Things can change on a dime and what I just foresee and it's my opinion, not necessarily my
• 16:55
  effect, but I'm seeing that they're kinda putting things off.
• 16:59
  They're trying to just appease everybody at this point.
• 17:02
  But then when the vote goes down, whoever comes into office is gonna call the shots.
• 17:07
  And we have to be prepared for that.
• 17:09
  And so now for small businesses, in my opinion, from today until that election day is your time
• 17:15
  to get your stuff together because regardless of how it turns out, it's all gonna be
• 17:20
  different.
• 17:20
  So we need to be ready for that.
• 17:22
  So everybody needs to have an accountant or a bookkeeper someone reconciling their
• 17:28
  information monthly.
• 17:30
  I mean, one
• 17:30
  of the things that has always concerned me is that I feel like small business owners call
• 17:36
  accountants at tax time.
• 17:38
  It's it's so ridiculous.
• 17:39
  Instead of talking to an accountant monthly, at least quarterly, but ideally, you need monthly
• 17:47
  reconciliation of how your business is running because it's like, why be surprised at tax time
• 17:53
  how well your business did?
• 17:54
  Like, that's crazy, but I think so many people out here, they're letting their fear of math be
• 17:59
  the reason why they don't really know what's going on in their business or they're not on
• 18:04
  top of their finances in their business,
• 18:06
  and it's really been tragic.
• 18:08
  It it is.
• 18:09
  It's tragic in that they put their life into their business.
• 18:13
  Because if you own your business, yeah, I know you put your life into it because I've done
• 18:16
  that.
• 18:16
  You've done that.
• 18:17
  Steven's done that.
• 18:18
  Rob's done that.
• 18:19
  We've all done that.
• 18:20
  And at the end of the day, do you want it to be for something or for nothing?
• 18:24
  Your accounting is the foundation of your business, period.
• 18:28
  Yes.
• 18:28
  You better have a good service.
• 18:29
  You better have a good product, but you can always change your service or your product as
• 18:32
  you go when you find things aren't working or they are, but you have to have the numbers to
• 18:37
  tell you the true story.
• 18:38
  And, Melinda, we've been talking about this together for years.
• 18:41
  I know.
• 18:41
  I don't know.
• 18:42
  Are we are where's the brick wall?
• 18:44
  Might as well talk to it.
• 18:45
  But I can tell you with COVID, you will not live financially through co because you
• 18:50
  basically have business COVID.
• 18:51
  That's what we're gonna call it.
• 18:53
  You if you are not reconciling your accounts and you are not getting your financial house in
• 18:57
  order, you have financial COVID.
• 18:59
  You have accounting COVID.
• 19:01
  Because and it will destroy you.
• 19:02
  Alright.
• 19:03
  So let's so let's talk about my my my freelancers and my Geek Panures down here.
• 19:07
  My folks that are that are driving Uber, that are doing people's hair and makeup, getting
• 19:13
  paid via Cash App and, Venmo and this kind of stuff and they don't have a business Venmo.
• 19:19
  Right?
• 19:19
  They got a personal Venmo and a personal Cash App getting paid.
• 19:24
  What's going on with these people?
• 19:26
  Because these people were the ones that couldn't apply for anything because they've
• 19:29
  been kinda jiving the system the whole time, and now the system just bit them.
• 19:35
  Right.
• 19:35
  Yeah.
• 19:36
  Took a chunk right out.
• 19:37
  Took a chunk out of their hand.
• 19:39
  And so the way those people can handle their accounting and their finances They can use
• 19:44
  something called QuickBooks Self Employed.
• 19:45
  Now, I'm not a huge fan of QuickBooks Self Employed only because there's no real
• 19:49
  reconciliation of your accounts.
• 19:52
  But what there is is exactly what you're talking about has the ability to record sales
• 19:57
  regardless of how you're collecting the money.
• 19:59
  So the IRS cares that you're recognizing income.
• 20:03
  If you get paid through a personal Venmo and you record the sale, You're solid.
• 20:08
  All is good.
• 20:09
  And, yeah, we don't like the commingling because, you know, you Venmo your kid for some
• 20:13
  groceries, whatever, and then they Venmo they don't Venmo your back.
• 20:15
  That was a mistake.
• 20:16
  Because they definitely don't do that.
• 20:17
  I was like, kids don't get changed.
• 20:19
  What are you talking about?
• 20:20
  And he
• 20:22
  They don't.
• 20:23
  So, you know, those kind of the these entrepreneurs who are out there and they're
• 20:27
  doing, you know, kind of a service, they're gonna pay to however they could get the money.
• 20:30
  As long as they're recording it in their accounting system to provide them with a an
• 20:34
  accurate profit and loss and a balance sheet which means that's a good thing.
• 20:39
  We have a balance.
• 20:40
  She means you have assets.
• 20:41
  So QuickBooks Self Employed is one way to do it.
• 20:43
  You could take pictures of your receipts right there.
• 20:45
  You could even take pick take screenshot of your Venmo payment from your customer and
• 20:49
  upload it or, you know, attack it into quickbooks online self employed or even just
• 20:53
  quickbooks online simple start.
• 20:56
  So there are ways for them very easily right on their phone.
• 20:59
  There's no excuse.
• 21:01
  You don't have to sit at your computer and have an office or any of that stuff.
• 21:05
  You need a phone, not a flip phone like Star Trek.
• 21:09
  K.
• 21:09
  I see those Star Trek phones out there.
• 21:10
  If you're in business and you have a Star Trek phone, just go get a job because that's not
• 21:15
  being a business.
• 21:15
  Okay?
• 21:16
  If you have to do, you know, three letters to get to the c on a keyboard, we got problems.
• 21:21
  Right?
• 21:22
  So that's what I encourage those people to do is to do something self employed.
• 21:26
  Quickbooks self employed is great.
• 21:28
  Or quickbooks online just regular, but do something to track.
• 21:31
  They need it, but they need an EIN number and a business bank account.
• 21:35
  Right?
• 21:36
  Yes.
• 21:36
  They should.
• 21:37
  Absolutely.
• 21:38
  If there were if they if they to date have not gotten an EIN, even as a sole prop, Right?
• 21:44
  Even if you're just you're out there Uber and like crazy, get an EIN.
• 21:47
  You should have an EIN, a business bank account, get a business Ben Venmo.
• 21:50
  Get legit.
• 21:51
  It's time to it's like, it's kinda do or die right now, like legit.
• 21:57
  So that's how I've been approaching it with my clients is, listen.
• 21:59
  Here's the deal.
• 22:00
  You've got get your stuff together.
• 22:01
  And they're coming to me out of out of nowhere because they're realizing the, you know, what
• 22:06
  they've done in the past.
• 22:07
  They don't wanna keep repeating.
• 22:08
  And then, you know, a lot of people looks we can even move to unemployment.
• 22:11
  The PPP loans the same, but look at unemployment.
• 22:14
  They gave self employed people unemployed ointment benefits.
• 22:18
  I know.
• 22:18
  I know.
• 22:19
  I was like, holy macaroni vet, man.
• 22:22
  They gave self employed people Unemployment.
• 22:26
  What?
• 22:27
  600 extra dollars a week.
• 22:29
  Right.
• 22:30
  Right.
• 22:30
  And that's that is a truce.
• 22:32
  That is a very serious statement to a small business owner who is a Schedule C with no
• 22:37
  payroll that the government said if you can prove with the paperwork that you're self
• 22:43
  employed, we're gonna give you unemployment.
• 22:45
  That's unheard of.
• 22:47
  It is.
• 22:47
  It is.
• 22:48
  And and and I I was glad they did it.
• 22:51
  Although the fact that they're still fighting and they haven't figured out how to keep
• 22:54
  supporting small business owners, I don't know what they're thinking.
• 22:57
  I don't know what they think they're gonna wait till everybody gets evicted from there.
• 23:01
  You know, it's fan.
• 23:02
  I I don't know.
• 23:03
  It's really it's really, really scary because I think the other piece of it is There was a lot
• 23:08
  of forbearance that went on at first, but now the forbearance is getting cut off.
• 23:11
  His credit card companies are now, like, But depending on who you're dealing with, I mean,
• 23:17
  there were some companies that only did a forbearance, and that was it.
• 23:20
  I'm not gonna name no names, but, you know, Then we get with an a and end with the MX.
• 23:26
  Anyway, so my point is I want you guys to know that, you know, there's a lot of different
• 23:31
  resources out here but you must have your paperwork in order.
• 23:36
  And, you know, with that unemployment stuff, let's talk about unemployment because are they
• 23:40
  taking taxes out of people's unemployment, Dawn?
• 23:43
  So here, that's another thing.
• 23:45
  But and people are going to get themselves into trouble if they are not paying attention.
• 23:48
  It's a windfall, an extra 600 a week, and I'm having a great time.
• 23:52
  Now unemployment is not taxable on the Social Security and Medicare.
• 23:56
  They're solid there, but it is taxable on a federal basis period.
• 24:01
  At your federal tax rate, whatever that is at the end of the year, and then also state if
• 24:05
  you're in a state that has state sales tax, which not all of them do, But for those so when
• 24:10
  you go, you when you fill out your unemployment, you should say, yes.
• 24:13
  I want taxes taken out, and I don't think a lot of people did they're and here's one of the
• 24:17
  things with the IRS, and I think there's a lot that's gonna happen in 2021 that I, you know, I
• 24:22
  wish I had a crystal ball to see what was gonna happen.
• 24:24
  But I can tell you the IRS was out of business for, like, 3 months.
• 24:29
  They were out of we couldn't even call the practitioner line.
• 24:33
  So they were out of business.
• 24:34
  Guess what they're gonna be looking for?
• 24:36
  Oh, oh, yeah.
• 24:37
  Oh, listen.
• 24:38
  It's gonna come down hard.
• 24:40
  And when you owe 1000 of dollars to the IRS.
• 24:43
  They're gonna come get it.
• 24:44
  They're not gonna care.
• 24:45
  They don't care.
• 24:46
  You better have my money.
• 24:48
  Give me what you owe me.
• 24:49
  They're not gonna play with people.
• 24:51
  Exactly.
• 24:52
  And that's why I wanted to have you worn down because I really wanted to make sure that my
• 24:56
  loyal fan heard what you said.
• 24:59
  If you are out here getting unemployment and you're not holding back 10% for taxes, you
• 25:04
  could be in trouble later.
• 25:07
  Particularly if your business doesn't swing all the way back up to what it was at at least half
• 25:12
  of what it was pre COVID.
• 25:14
  And we know And the other thing that I wanna point out too, sadly, you know, doing 41% of
• 25:20
  African American businesses have already closed.
• 25:23
  They're gone.
• 25:24
  They're not going to reopen, and that was as of May.
• 25:27
  So we know that there are people going down every week.
• 25:32
  They will not reopen.
• 25:34
  And and that just makes me cry.
• 25:37
  It's heartbreaking.
• 25:38
  Honestly, but I don't want people to go down for being stupid.
• 25:43
  Like, you know, you can go down because business dried up.
• 25:45
  You happen to be in an industry.
• 25:47
  That got slammed that didn't come back, but you don't wanna go to jail or or have some huge tax
• 25:53
  burden because you just didn't bother to get the information.
• 25:56
  And so that's why I was so pleased to have you on tonight.
• 26:01
  And I and I wanna ask you one last question before we go.
• 26:05
  Hardship loans from 401 k's.
• 26:08
  What's the deal with that?
• 26:09
  Should I be letting TD Ameritrade keep my taxes rushing?
• 26:13
  Uh-uh.
• 26:13
  Give me all my money because didn't they change the laws so that they didn't give a chance to
• 26:17
  hit you with those taxes going into your 401 k?
• 26:20
  Yeah.
• 26:20
  There's no penalty.
• 26:21
  So they've eliminated the the early withdrawal penalty.
• 26:25
  Now it's not tax free, but it is there are no penalties.
• 26:29
  They're waiting the early withdrawal penalties, a 100% is usually a 10% penalty
• 26:33
  Okay.
• 26:34
  For for early withdrawal of your 401 k, and they're waving that now.
• 26:37
  Which historically it it would have to be a hardship in order to do it.
• 26:40
  They you know how you know what the how much the IRS loves people who have 401 k's, If you
• 26:45
  take money out of your 401 k prior COVID and you paid your taxes, no penalty because they
• 26:51
  want
• 26:52
  Everybody puts that money in pretax.
• 26:54
  Everybody puts that money in pretty day.
• 26:56
  Of being smart.
• 26:57
  You do it.
• 26:58
  Absolutely.
• 26:58
  So so there's just, you know, some things there that that people should be paying attention to.
• 27:03
  And I would encourage people to be smart about making those withdrawals and and not being too
• 27:11
  proactive, you know, unless absolutely necessary.
• 27:14
  And I think for small business owners that may have found a little bit of a drought in their
• 27:19
  area of business, to consider maybe a shift.
• 27:22
  And I wanna just give you one quick example.
• 27:24
  I have a restaurant out of Pittsburgh, one of the best restaurants in the whole wide world.
• 27:27
  This woman pays her people.
• 27:28
  And the people come first.
• 27:30
  Her employees are most important to her period.
• 27:32
  And COVID comes and she's got 20 employees in one business and 10 in another.
• 27:36
  And she's gotta pay them.
• 27:37
  And so she made things happen.
• 27:39
  What she did was she shifted from a restaurant because you couldn't dine in.
• 27:42
  They did take out things like that.
• 27:44
  But they turned into a grocery delivery store.
• 27:46
  And the reason for that is because they had access to all the produce.
• 27:50
  The fresh produce fresh meat because they're a restaurant.
• 27:52
  So they turned around Gordon food service and they made themselves a delivery restaurant, a
• 27:58
  delivery market essentially.
• 27:59
  She has is moving literally in the next months, they're going to a from a two thousand square
• 28:05
  foot facility to an eight thousand square foot facility because they shifted.
• 28:09
  They were smart They knew they were gonna have challenges.
• 28:12
  So how can I shift in this particular business to make money and keep my people and keep my
• 28:18
  business open She just shifted her mindset?
• 28:20
  Now she's back to a restaurant.
• 28:22
  Still doing some delivery groceries and things like that, but she thrived during COVID.
• 28:26
  She didn't die.
• 28:27
  She thrived during COVID.
• 28:28
  And I love love hearing stories like that because that's what it takes.
• 28:33
  It's about pivoting into stuff that people need.
• 28:37
  You gotta figure out what people need and give the people what they want.
• 28:41
  And I love it.
• 28:42
  I want you to tell me What is your favorite podcast?
• 28:47
  Well, I'm a really big fan of
• 28:49
  the green apple.
• 28:50
  He's a business owner who is a former we call him a recovering accountant.
• 28:55
  And so he's does a podcast and he talks, you know, talks about business, another really good
• 28:59
  business guy.
• 29:00
  He's one of my favorites.
• 29:02
  Apple Green podcast.
• 29:03
  Yeah.
• 29:03
  Alright.
• 29:04
  Alright.
• 29:04
  The Green Apple podcast.
• 29:05
  Love it.
• 29:06
  I hadn't heard of that one.
• 29:07
  Dawn, what's your favorite app?
• 29:09
  Listen, I'd be a failure to this entire show if I didn't say that QuickBooks was my favorite
• 29:15
  app.
• 29:15
  I would be I would be misleading the whole world at this point.
• 29:19
  I mean, you have to have accounting.
• 29:21
  And if your accounting is good and I can read it, I can help you.
• 29:25
  So I have to say that quickbooks has to be my favorite app.
• 29:27
  Well, you know what?
• 29:29
  I appreciate that from you.
• 29:32
  I definitely do.
• 29:33
  And when it comes to my favorite app, You know, I have a few, but Dropbox is my favorite app.
• 29:39
  I love it because it travels with me everywhere I go.
• 29:41
  No matter what device I can log in and get my files and send them to other people.
• 29:45
  Love, love, love.
• 29:46
  Yeah.
• 29:46
  Well, Nick, can I say one more just because that was like a canned one?
• 29:50
  But password keeper is one of my favorite apps.
• 29:54
  I have my phone, and this phone, of course, another appendage, I can get into anything
• 29:59
  because I have all of my password securely stored on my phone.
• 30:03
  What is your favorite business book?
• 30:05
  Dawn, what's your favorite one?
• 30:07
  I'm sorry, but I have to go with Mike McCallumet.
• 30:09
  I have to go with profit first.
• 30:11
  And the reason why I can say with 100% confidence is because I've seen it work in
• 30:17
  small business.
• 30:18
  Literally with clients who embrace that book and have survived through COVID without a
• 30:23
  problem because they have a great process on how they're gonna handle that money that comes
• 30:27
  in the door.
• 30:28
  So I have to say Mike McCadden.
• 30:30
  It's not because I love him because I still am better than him in pinball.
• 30:33
  But it's gotta be prepping first.
• 30:35
  I love my to end that book.
• 30:37
  Listen, thank you so much.
• 30:39
  If you guys want to learn more information about them, just check out our blog succeed as
• 30:44
  your own boss.com.
• 30:45
  You'll have lots of more information about them.
• 30:47
  And I just wanna thank you all for joining us on small fish chat line.
• 30:51
  I'm Melinda Emerson, the small biz lady, and I will leave you with this.
• 30:55
  You never lose a business either you win or you learn.
• 30:58
  God bless everybody.
• 30:59
  Good night.
• 31:02
  Thank you for listening to the Small Biz chat podcast with Melinda Emerson.
• 31:07
  For more resources and small business success strategies, visit succeed as your own boss.com.
• 31:13
  Subscribe to this podcast wherever you listen to podcasts and join us next Wednesday.