5 Tips for Creating Effective Estimates

5 Tips for Creating Effective Estimates

 

LUTZ BUSINESS INSIGHTS

 

5 Tips for Creating Effective Estimates

5 tips for creating effective estimates

jimmy burgess, senior accountant

 

Estimates aren’t just for car repair shops or HVAC technicians. You may want to present them to customers if your company does projects that: 

  • Don’t have firm price tags 
  • Consist of multiple parts, like hourly work and materials 
  • Are likely to be expensive 

You can create estimates in Microsoft Word or in accounting software like QuickBooks. The latter is preferable for many reasons. For one thing, you already have customer, product, and service information stored there. You can also convert estimates to invoices in one click. Whichever method you choose, you’ll be more likely to have your estimate approved if you adhere to a few guidelines. 

Create a checklist for yourself ahead of time.

Don’t just fill out an estimate form. Go over each step of the project in writing first. You undoubtedly have price lists for hourly work and supplies, but there may be additional charges. If multiple people will be contributing, you’ll need to build a timeline so you can promise a realistic delivery date. 

Be precise. 

“Precise estimate” may sound like an oxymoron. After all, you’re not absolutely certain what the final total will be. But spell out every element of the project with hour/cost totals. Be sure you include things like setupcorrections, and color/part changes 

Build-in early notifications of cost overruns. 

Track costs carefully as you go. If you get partway through the project and realize that expenses are growing beyond the estimate, notify the customer before proceeding. You could specify a percentage (i.e., early warning if costs exceed a 5 percent increase).  

This guarantee should be spelled out in your estimateIt will ease some of the apprehension your customer might have about approving the expenditure. 

Make your estimate visually appealing. 

Handwritten thank-you notes can be appropriate in some business situations, but not handwritten estimates. Paper and electronic forms you send to customers should be polished and professional-looking 

QuickBooks allows you to customize your estimates. You can insert your company’s logo, add or remove fields (even inserting a Due Date field)and modify the design (fonts, colors, etc.).  

Build-in a follow-up date.

The process of having an estimate accepted may require multiple interactions with the customer. Don’t just send it and hope for the best. You might personalize the actual form with a handwritten note if you’re snail-mailing it or an additional email if you send it electronically. Tell the recipient to expect a call or visiby a specific date to discuss your proposal. You could consider adding a modest discount if an estimate is accepted by a certain date. 

These suggestions may seem like overkill if you’re simply proposing to build a website or do a minor car repair. But the more complex the project, the more effort you should put into your estimate. 

Our accounting specialists can help you with sales forms and anything else you’re struggling with in QuickBooks.  Contact us to set up a consultation. 

ABOUT THE AUTHOR

402.514.0016

jburgess@lutz.us

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JIMMY BURGESS + SENIOR ACCOUNTANT

Jimmy Burgess is a Senior Accountant at Lutz with over four years of relevant experience. His primary focus is to provide outsourced accounting to clients with a focus on QuickBooks, tax and payroll compliance, small business consulting, as well as software implementation training.

AREAS OF FOCUS
  • Outsourced Accounting Services
  • QuickBooks
  • Tax & Payroll Compliance
  • Small Business Consulting
  • Software Implementation & Training
  • Construction Industry
AFFILIATIONS AND CREDENTIALS
  • Nebraska Society of Certified Public Accountants, Member
  • Certified Public Accountant
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  • BS in Business Administration and Accounting, University of Wyoming, Laramie, WY
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  • Youth Sports Coach, Volunteer
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P: 402.496.8800

HASTINGS

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Hastings, NE 68901

P: 402.462.4154

LINCOLN 

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Lincoln, NE 68508

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GRAND ISLAND

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Grand Island, NE 68803

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Starting a Business in 2020? Your Accounting Options

Starting a Business in 2020? Your Accounting Options

 

LUTZ BUSINESS INSIGHTS

 

Starting a Business in 2020? Your Accounting Options

starting a business in 2020? your accounting options

Mike Perry, client accounting services director

 

Before your new business even makes its first sale, you need to know how you’re going to meet your accounting needs. You should select a system that will suit you in the early days of your venture and will also allow you to handle growth. 

You have a few options. Some small businesses take the most familiar pathmanual bookkeepingYou can do much of what’s required using Microsoft Office applications, primarily Word (for invoices, receiptspromotional materials, etc.)Excel (for reports and customer lists), and Outlook (for email and scheduling). 

There’s a big problem associated with that method: It doesn’t provide tools for recording and automatically tracking sales and expenses. You might be able to cobble together such a system in Excel, but you would probably find that task even more difficult than designing a report.  

Further, finding specific data, like a payment or a billcan take a long timeSo can matching a payment with an order or reconciling accounts. As your business grows, you’re likely to find that you’re spending so much time on your accounting chores that you’re not planning and managing and creating 

Software Can Help 

These drawbacks have prompted many small businesses to invest in accounting software. QuickBooks is the most popularit was designed to be used by small businesspeople who have little or no experience with financial bookkeeping. Using QuickBooks, you can connect to your online accounts (checking, credit cards, etc.) and import transactions so yodon’t have to wait for a statement. 

The software allows you to create and email sales and purchase forms, record and manage incoming payments and outgoing bills, and generate dozens of reports by simply choosing one of the templates provided and letting QuickBooks fill it with your own company’s data. All of your customer and vendor data is stored neatly in records, and you can find the smallest detail anywhere in the system in seconds by using the software’s search tools. 

There are other advantages over manual bookkeeping. You save timeAll of your financial data is in one place. You’re more likely to stay current with your accounts receivable and payable. And, your accounting records can be easily backed up off-site. 

Getting Expert Assistance 

As transformative as QuickBooks can be, some small businesses still struggle with its operations and the time it takes to maintain their financial books. Even those that don’t face a bigger problem: understanding what this neatly-organized data means for their future. How can they make better decisions based on an analysis of it? 

We can help in both areas. Our accounting specialists can help you get started with QuickBooks and use it more efficiently. We can even take over the accounting tasks that vex you and eat up the time you need for more pressing managerial responsibilities. Our team stands ready to meet with you and determine where it can fit in to lighten your load and provide expert insight on your financesContact us, and we’ll schedule a consultation. 

ABOUT THE AUTHOR

Mike Perry + Lutz Client Accounting Services in Nebraska

402.827.2087

mperry@lutz.us

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MIKE PERRY + CLIENT ACCOUNTING SERVICES DIRECTOR

Mike Perry is a Client Accounting Services Director at Lutz with over 15 years of accounting experience. He focuses on providing business consulting, software implementation and training, accounting procedure assistance and outsourced accounting replacement consulting for closely held companies.

AREAS OF FOCUS
AFFILIATIONS AND CREDENTIALS
  • American Institute of Certified Public Accountants, Member
  • Nebraska Society of Certified Public Accountants, Member
  • Intuit Certified ProAdvisor, QuickBooks Advanced
  • Certified Public Accountant
EDUCATIONAL BACKGROUND
  • BSBA in Accounting, University of Nebraska, Kearney, NE
COMMUNITY SERVICE
  • Community Bike Project Omaha, Past Treasurer
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Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

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Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

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Grand Island, NE 68803

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SBA Updates to the Paycheck Protection Program Loan Guidance

SBA Updates to the Paycheck Protection Program Loan Guidance

 

LUTZ BUSINESS INSIGHTS

 

SBA Updates to the Paycheck Protection Program Loan Guidance

SBA Updates to the Paycheck Protection Program Loan Guidance

On June 22nd, 2020, the SBA provided updated guidance to the Loan Forgiveness Interim Final Rule. This new PPP guidance contains the following key updates:

Flexible Covered Period Option

A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan – including before the end of the covered period – if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness. If the borrower applies for forgiveness before the end of the covered period and has reduced any employee’s salaries or wages in excess of 25%, the borrower must account for the excess salary reduction for the full 8-week or 24-week covered period.

S-Corp Owner Retirement Contributions Allowable

S-corporation owner-employees are capped by the amount of their 2019 employee cash compensation and employer retirement contributions made on their behalf. However, employer health insurance contributions made on their behalf cannot be separately added because those payments are already included in their employee cash compensation.

FTE Reduction Safe Harbor Date

The date on which borrowers need to have eliminated any reduction in salary/hourly wage greater than 25% or reduction in FTEs (Reduction Safe Harbor dates) has been updated to “anytime on or before December 31st, 2020.”

C-Corp Owner Compensation Clarified

C-corporation owner-employees are capped by the amount of their 2019 employee cash compensation and employer retirement and health insurance contributions made on their behalf.

If you have any questions, please contact your Lutz representative or email us at ppploan@lutz.us.

Updated 6/25/2020

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Starting a Business in 2020? Your Accounting Options

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OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

115 Canopy Street, Suite 200

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Benefits of Medicare Interim Cost Report Template for Critical Access Hospitals

Benefits of Medicare Interim Cost Report Template for Critical Access Hospitals

 

LUTZ BUSINESS INSIGHTS

 

Benefits of Medicare Interim Cost Report Template for Critical Access Hospitals

Benefits of Medicare Interim Cost Report Template for Critical Access Hospitals

Julianne Kipple, Healthcare Director
Katie Roberts, Healthcare manager

The Medicare cost report has a material financial impact on Critical Access Hospitals (CAHs). Significant changes in hospital utilization, expense swings or changes in service lines can result in large settlements. Cost reports are typically not due until five months after the end of the fiscal year. An interim cost report template can be done monthly or quarterly with financial statements. The template enables the facility to have knowledge of the cash flow and financial impact of the cost report as the fiscal year progresses. It also gives management the ability to provide board members with more accurate monthly financial statements as the cost report journal entry would be included in contractual adjustments.

 

Cash Flow Planning

CAHs typically do not have high days of cash on hand. The interim template allows facilities to anticipate the Medicare settlement as early as possible to help with cash flow management. Waiting until after year-end to calculate the cost report settlement is not ideal as decisions made earlier in the year may have been affected if the amount of the cost report settlement had been known earlier. 

 

Interim Settlement and Rate Changes

Preparing an interim cost report template allows CAHs to compare current reimbursement rates from Medicare to current calculated rates. If the CAH has an excellent start to the fiscal year and revenue has increased while expenses are holding steady, it is likely reimbursement rates are too high, and the CAH has a cost report payable. The template can be used to request a rate adjustment or interim settlement from MACs.

Rates can be adjusted to reduce the payable or receivable before the end of the year. For example, instead of paying a large lump sum at the end of the year, a CAH can slowly reduce the reimbursement received from Medicare and better manage cash flow. The same is true if the opposite has occurred, CAHs can request a rate increase to improve reimbursement during the year from Medicare instead of waiting to get a large check after year-end.

 

Service Line Analysis and Projections

An interim cost report template can be adjusted and recalculated for any anticipated service line changes or projects. Many facilities use templates during strategic planning. For example, a CAH can analyze a potential new service line to see the impact it has on the cost report. The analysis provides the ability for more in-depth decision making on whether the service line is a good fit for the facility from a reimbursement perspective. Moving forward, a hospital can also see in real-time the impact of the new service line on reimbursement.

 

Building Projects

If a CAH is contemplating a new building project, a template is a very useful tool. Calculating the square foot changes the new project may cause, the additional depreciation and interest expense can all be factored into a template to see the impact the new building project may have on the cost report and reimbursement from Medicare in the future. This analysis should be done at the architectural planning phase of the project to ensure there are no unanticipated negative impacts on Medicare reimbursement.

 

Non-Reimbursable Cost Report Center Analysis

Templates can be used to review non-reimbursable departments in a facility. Many times, the non-reimbursable department’s impact on the cost report is not immediately obvious when looking at the face of a cost report. By taking out the costs and other figures tied to the non-reimbursable and recalculating the template, a facility can see what the impact of the non-reimbursable department has on Medicare reimbursement. 

 

COVID-19 Impact and Planning

As the country is trying to navigate these unprecedented times since the COVID-19 virus has hit communities and affected business, the Medicare interim cost report template has become increasingly important to manage reimbursement rates and cash flow better. As revenue declines due to the virus and expenses are unchanging or even increasing, it is likely reimbursement rates are too low. Cash is going to continue to be vital as hospitals try to prepare for the unknown future impact of COVID-19.

We suggest that cost report estimates are done monthly rather than quarterly to better estimate the large impact COVID-19 is having on a facility’s revenue. More cost report guidance is anticipated to be issued on how to handle the substantial amount of HHS funds and PPP loans that CAHs have received. If CMS decides that an adjustment to remove the expenses reimbursed by the HHS funds or the PPP loan is necessary, it could have a large negative impact on the cost report settlements. 

A template allows CAHs to adjust off expenses in the weeks after CMS makes their decision to quickly see the impact that adjustment will have on reimbursement and, ultimately, the settlement. The amount of time a CAH needs to obtain that knowledge will influence how the facility financially pilots through this pandemic. 

If you do not currently have a cost report estimate template and you are interested in having an interim cost report template setup for your monthly financial statements and planning, please contact us or call at 402-496-8800.

ABOUT THE AUTHOR

julianne kipple

402.827.2075

jkipple@lutz.us

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JULIANNE KIPPLE + HEALTHCARE DIRECTOR

Julianne Kipple is a Healthcare Director at Lutz with over 10 years of professional experience in the healthcare industry. Her expertise is in accounting and consulting services for healthcare facilities, including outsourced CFO services, Medicare and Medicaid reimbursement, and Medicaid Disproportionate Share Surveys (DSH).

AREAS OF FOCUS
AFFILIATIONS AND CREDENTIALS
  • Healthcare Financial Management Association, Member
  • American Institute of Certified Public Accountants, Member
  • Nebraska Society of Certified Public Accountants, Member
  • Certified Public Accountant
  • Certified Healthcare Financial Professional
EDUCATIONAL BACKGROUND
  • BSBA in Accounting, with high distinction, Creighton University, Omaha, NE
  • MBA, Creighton University, Omaha, NE

402.821.2351

kroberts@lutz.us

LINKEDIN

115 CANOPY STREET

SUITE 200

LINCOLN, NE 68508

KATIE ROBERTS + HEALTHCARE MANAGER

Katie Roberts is a Healthcare Manager at Lutz with over four years of experience in accounting. She is responsible for providing accounting and consulting services to healthcare organizations with a focus on outsourced CFO services and reimbursements.

AREAS OF FOCUS
  • Accounting & Consulting
  • Outsourced CFO Services
  • Reimbursements
  • Medicare Cost Reports
  • Healthcare Industry
AFFILIATIONS AND CREDENTIALS
  • Nebraska Society of Certified Public Accountants, Member
  • Healthcare Financial Management Association, Member
  • Certified Public Accountant
  • Certified Healthland Financial Professional
  • Certified Revenue Cycle Representative
EDUCATIONAL BACKGROUND
  • MPA, University of Nebraska, Lincoln, NE

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OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

115 Canopy Street, Suite 200

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

CPT Code Modifiers: Clarification of Commonly Used and COVID Updates

CPT Code Modifiers: Clarification of Commonly Used and COVID Updates

 

LUTZ BUSINESS INSIGHTS

 

CPT Code Modifiers: Clarification of Commonly Used and COVID Updates

cpt code modifiers: clarification of commonly used and covid updates

kim kaye, healthcare consulting senior

 

There are many circumstances when coding more than one Current Procedural Terminology (CPT) code on the same encounter that clarification is needed regarding whether to use modifier 25 or 59. Should it be added to the Evaluation and Management (E/M) visit or the procedure code? Which modifier goes on which code? Here is the answer: Use the 25 modifier for the E/M codes and the 59 modifier for the procedure codes.

 

MODIFIER 25 AND 59

Modifier 25 is used for “a significant, separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of the procedure or other service.” For example, a patient arrives at the doctor’s office for a biopsy of a skin lesion, and during the visit, the patient also asks the physician for a prescription for an upper respiratory infection. The modifier would be appended to the E/M code for the supported diagnosis of upper respiratory infections.

Under certain circumstances, it may be necessary to indicate that a procedure/service was distinct or independent from other non-E/M services performed on the same day. Modifier 59 is used to “identify procedures or services, other than E/M services, that are not normally reported together, but are appropriate under the circumstances.” A different session, procedure or surgery, site or organ system, incision/excision, lesion, or injury must be documented. Only if no more descriptive modifier is available may modifier 59 be used.

An example of the appropriate use of the 59 modifier: A physical therapist performed both CPT code 97140 – Manual therapy techniques (e.g., mobilization/manipulation, manual lymphatic drainage, manual traction), on one or more regions, each 15 minutes, and 97530 – therapeutic activities, direct (one on one) patient contact by the provider (use of dynamic activities to improve functional performance), each 15 minutes in the same visit.

Normally these procedures are considered inclusive. If the 59 modifier is appended to either code, they will both be allowed on the claim separately. However, the 59 modifier should only be added if the two procedures are performed in distinctly separate 15-minute intervals. If the therapist performs the procedures simultaneously, then the 59 modifier should not be used.

 

Public Health Emergency Special Modifiers

How to bill appropriately for services related to COVID-19 is a high priority for most healthcare entities. Described below are examples of the more common modifiers used during the Public Health Emergency (PHE).

As a result of this PHE, apply the following to claims for which Medicare payment is based on a “formal waiver” including, but not limited to, Section 1135 or Section 1812(f) of the Act:

  1. The “DR” (disaster-related) condition code for institutional billing, i.e., claims submitted using the ASC X12 837 institutional claims format or paper Form CMS-1450.
  2. The “CR” (catastrophe/disaster-related) modifier for Part B billing, both institutional and non-institutional, i.e., claims submitted using the ASC X12 837 professional claim format or paper Form CMS-1500 or, for pharmacies, in the NCPDP format.
  3. Modifier “95” (Synchronous Telemedicine Service Rendered via Real-Time Interactive Audio and Video Telecommunications System) may also be appended but is not required. When billing a telemedicine service (using modifier 95) and another service that requires modifier 25 to be used in addition, the general rule is to report the “payment” modifier before any other descriptive modifier. Since both modifier 25 and 95 can impact payment, list modifier 25 first.

**For details regarding appropriate use of CR and DR Modifiers https://www.cms.gov/files/document/se20011.pdf

 

References:

How to Use ICD-10-CM, New Lab Testing Codes for Covid-19. AAP News. (March 12, 2020). Retrieved on June 11, 2020 from https://www.cms.gov/Medicare/Coding/NationalCorrectCodInitEd/Downloads/modifier59.pdf

Modifier 59. (2017). American Medical Association. Retrieved on June 11, 2020 from https://www.cms.gov/Medicare/Coding/NationalCorrectCodInitEd/Downloads/modifier59.pdf

Medicare-Fee-for-Service (FFS) Response to Public Health Emergency on the Coronavirus (COVID-19). (June 1, 2020). Centers for Medicare and Medicaid Services. Retrieved on June 11, 2020 from https://www.cms.gov/files/document/se20011.pdf

ABOUT THE AUTHOR

402.827.2353

kkaye@lutz.us

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KIM KAYE + HEALTHCARE CONSULTING SENIOR

Kim Kaye is a Healthcare Consulting Senior at Lutz with 16+ years of experience. She is responsible for providing professional coding assistance, chart audits and chargemaster reviews for clients with a focus on the healthcare industry.

AREAS OF FOCUS
  • Coding Assistance
  • Chart Audits
  • Chargemaster Reviews
  • Healthcare Consulting
AFFILIATIONS AND CREDENTIALS
  • Certified Professional Coder
  • Certified Evaluation & Management Auditor
  • American Academy of Professional Coders, Member
  • National Alliance of Medical Auditing Specialists, Member
EDUCATIONAL BACKGROUND
  • BA, Bellevue University, Bellevue, NE

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Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

115 Canopy Street, Suite 200

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Overview of the Coronavirus Food Assistance Program (CFAP)

Overview of the Coronavirus Food Assistance Program (CFAP)

 

LUTZ BUSINESS INSIGHTS

 

Overview of the Coronavirus Food Assistance Program (CFAP)

overview of the coronavirus food assistance program (CFAP)

Curtis thompson, tax director

 

On May 19th, 2020, the USDA announced the details of the Coronavirus Food Assistance Program (CFAP). The program will provide $16 billion of direct payments to farmers and ranchers that were adversely affected by the coronavirus pandemic.

The turnaround time on these payments has been made a priority by the USDA. Applications are set to begin on May 26th, and payments will be issued within a week of receiving the application. Producers will receive 80% of their maximum payment with the other 20% to be paid later as funds remain available. The sign-up period will end August 28th. Producers will apply through their local Farm Service Agency (FSA) service center. Applications can be downloaded from farmers.gov/CFAP. Be prepared with documentation to support sales and inventory amounts.

Some highlights include:

  • Participation in the Paycheck Protection Program will not affect eligibility for CFAP payments
  • There is a $250,000 payment limitation per entity/person. However, unlike other FSA programs, payment limitations have been expanded for limited liability entities (Corporations, LLC’s & Limited Partnerships). Historically these entities would only receive one payment limitation, but with the CFAP, each owner that spends at least 400 hours per year in either labor or management of the entity would qualify for an additional payment limit. Entities are capped at three payment limits ($750,000).
  • USDA has broken down the program into five different commodity areas:
    • Non-Specialty Crops (Corn, Soybeans, Sorghum)
    • Wool
    • Livestock
    • Dairy
    • Specialty Crops
  • The $900,000 average adjusted gross income test does apply to these payments. However, if 75% of adjusted gross income comes from farming, ranching, or forestry, then the $900,000 AGI limitation does not apply.
  • Currently there is a list of ineligible commodities that would not qualify for a CFAP payment. These include but are not limited to alfalfa, rye, rice, soft red winter wheat, hard red winter wheat, white wheat, rice, eggs/layers, and sheep more than two years old. The USDA may reconsider these commodities if they can find support of a five percent price decline.

Non-Specialty Crops

Non-specialty crop payments will be made upon the lower of 50% of the producer’s 2019 production or the 2019 inventory that was not sold as of January 15th, 2020. The producer then will take that number multiplied by 50% then multiplied by the applicable payment rate for that crop. If the producer has sold all of his/her 2019 production by January 15th, 2020, they will not qualify for a payment on that particular crop.

There will be two separate payments, one based on a CARES Act payment rate, and one based on the CCC payment rate. For example, the Corn payment would be $0.32 CARES Act payment and $0.35 CCC payment for a total of $0.67 per bushel. You can find the other commodity payment amounts at farmers.gov/cfap/non-specialty.

The maximum payment a producer will receive on non-specialty crops is 25% of the 2019 production. This payment will then be further reduced below 25% if the farmer has more than 50% of the crop sold by January 15th.

It appears if the commodity is hedged but unsold there is no penalty or reduction.

Example based upon less than 50% of crop sold by January 15th (max payment):

A farmer produced 200,000 bushels of corn in 2019. As of January 15th, 2020, the farmer had 125,000 bushels unsold. The calculation would be based on the lower of 100,000 (50% of 2019 production) and 125,000 bushels of inventory as of January 15th. The 100,000 would then be multiplied by 50% then multiplied by $0.67 per bushel. The farmer would receive a maximum payment of $33,500.

Example based upon greater than 50% of crop sold by January 15th:

A farmer produced 200,000 bushels of corn in 2019. As of January 15th, 2020, the farmer had 60,000 bushels unsold. The calculation would be based on the lower of 100,000 (50% of 2019 production) and 60,000 bushels of inventory as of January 15th. The 60,000 would then be multiplied by 50% then multiplied by $0.67 per bushel. The farmer would receive a maximum payment of $20,100.

 

Livestock

Livestock payments will be made upon the sum of the producer’s number of livestock sold between January 15th and April 15th, 2020, multiplied by the CARES Act payment per head, and the highest inventory number of livestock between April 16th and May 14th, 2020, multiplied by CCC payment per head. 

There will be two separate payments with one based on a CARES Act payment rate and one based on the CCC payment rate. For example, the Feeder Cattle (600 lbs or more) payment would be $139 CARES Act payment (cattle sold) and $33 CCC payment (inventory). You can find the other livestock payment amounts at farmers.gov/cfap/livestock.

Example:

A producer sold 300 head of feeder cattle (600 lbs or more) between January 15th and April 15th. The producer’s highest inventory of feeder cattle between April 16th and May 14th was 450 head.

The producer will be paid $139/head on the 300 head that were sold between January 15th and April 15th for a total of $41,700 CARES Act payment. They will also be paid $33/head on the 450 head that were in inventory between April 16th and May 14th for a total of $14,850 CCC payment. So, the producer would receive a total payment of $56,550 between the CARES Act payment and the CCC payment.

Please visit the USDA website for the most up-to-date information on this topic. If you need additional guidance on commodities not covered in this article (dairy, wool, or specialty crops), or if you have any questions, please reach out to your Lutz representative or email us at info@lutz.us.

ABOUT THE AUTHOR

402.463.8987

cthompson@lutz.us

LINKEDIN

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CURTIS THOMPSON + TAX DIRECTOR

Curtis Thompson is a Tax Director at Lutz with over seven years of experience in public accounting. His experience includes tax planning, consulting and compliance for individuals and closely-held businesses with a focus in the agriculture industry.

AFFILIATIONS AND CREDENTIALS
  • Amerian Institute of Certified Public Accountants, Member
  • Nebraska Society of Certified Public Accountants, Member
  • Certified Public Accountant
EDUCATIONAL BACKGROUND
  • BSBA, Peru State College, Peru, NE
COMMUNITY SERVICE
  • Hastings Give Day, Volunteer
  • Our Lady of Assumption Catholic Church, Member

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