Archives for March 2020

Help from the U.S. Small Business Administration

The U.S. Small Business Administration is committed to helping during this health crisis. The CARES Act signed into law on March 27, 2020 will help small businesses and non-profits who are suffering because of the COVID-19 pandemic.

Get up to a $10,000 Advance on an Economic Injury Disaster Loan (EIDL). This Advance may be available even if your EIDL application was declined or is still pending, and will be forgiven.

If you wish to apply for the Advance on your EIDL, please visit www.SBA.gov/Disaster as soon as possible to fill out a new, streamlined application. In order to qualify for the Advance, you need to submit this new application even if you previously submitted an EIDL application. Applying for the Advance will not impact the status or slow your existing application.

Also, subscribe to email updates via www.SBA.gov/Updates and follow the SBA on Twitter at @SBAgov for the latest news on available SBA resources and services. If you need additional assistance, you can find your local SBA office and resource partners at www.SBA.gov/LocalAssistance. If you have questions, you may also call 1-800-659-2955.

Small Business Help

With the COVID-19 relief package now passed small businesses can apply for loans and other relief from the economic impact.

The first place to visit if you are looking for a loan is the U.S Small Business Administration (SBA). There you will find several resources that may help your business survive until the threat of the coronavirus has passed and business gets back to normal.

Help that may be available to your busines:

Small businesses can apply for Economic Injury Disaster Loans and Loan Advance with an online application.

If you have a current loan with SBA you may have the interest and principal forgiven for some time with the SBA Debt Relief program.

The SBA Express Bridge Loans are for businesses that already have a loan with the SBA and may provide relief fairly quickly.

Small Business Affected By Coronavirus

Small business owners are used to everyday stress. What it takes to run a business is, in part, a high tolerance for uncertainty and stress. But this is altogether different, and as much one would like some certainty in this time of incredible uncertainty, we may not get it.

If your business has been affected there may be help

What help you can reasonably expect:

Personal income tax filings have been postponed until July 15^th, 2020. That means that you don’t have to do anything right now if you cannot file before April 15^th – the extension is for everyone.

Business taxes, however, were due prior to the major effects of the coronavirus shut down. So, your business should have filed or requested an extension by March 16^th. If you didn’t then now is the time to file to avoid ever increasing fines and penalties for not filing.

What the stimulus package may offer small business:

You may be able to defer your payroll tax payments until 2021 if you are continuing to pay workers throughout the shutdown.

If you have had to lay off employees they may be able to get unemployment benefits extended until you can get up and running again.

Alternatively, businesses may apply for a loan in order to cover payroll. But it appears as if the option of both taking a loan and deferring payroll tax payments will not be available.

Also, if you already have a Small Business Administration loan your interest may be deferred at this time, loosing up a little of your cash flow.

Local:

Many counties and municipalities have put in place cease eviction orders for residential and commercial renters if they cannot pay due to the effects of the coronavirus. Look into your city or county’s policy to find out if you qualify.

Tough Times – Tough Decisions

In this uncertain time of crisis whether you let employees go or not may not be optional. But what to call it if you need to?

It’s hard to let employees go but what you call it matters

A furlough is a planned work stoppage. Say, you own a ski resort/water slide park and you love your employees and want them back, but come April 1st there is no more snow. You will need them in two months when the weather warms and your water park opens. The easy solution is to furlough them for the two months. A furlough is a sort of guarantee between the employer and the employee – you promise to have a job for them when the furlough ends and they promise to come back. In this crisis, this may be the closest method of not paying employees for a time, even though no one planned this work stoppage exactly.

A lay off is slightly different and may fit your situation at this time. A lay off assumes that you don’t know when and if you will need that employee back but that they are being let go because you don’t have work for them, not because they did anything wrong. There is no agreement that you will hire the employee back and they have no obligation to come back when you need workers again. They are free to find another job and you are free to find a new employee when you need one.

Under normal circumstances these two terms do make a difference to the employee when they file for unemployment. Under a furlough an employee can file for unemployment after seven days of no work, and there is no requirement that they look for other employment. Under a lay off an employee may file for unemployment after the seven day waiting period but is obligated to seek other employment right away.

During this crisis however the California EDD guidance says as of March 19, that if you are temporarily out of work (laid off) and plan to return to the same employer, you do not need to meet the usual requirement of looking for work while you are collecting unemployment insurance. However, if you are not attached to a particular employer with a job to return to, you are required to look for work while collecting benefits. You can do that from home, for example, by searching for jobs online.

The seven day waiting period has been waived for all filers during this time. How long benefits will last is unclear at this writing. However there is a promise of extension of benefits for filers through the Federal relief package.

Remote Ways to Pay

Although for 2019 there is an automatic extension to file and pay taxes, if you owe, til July 15, 2020, if you do file sooner you can pay and set up payment plans all from the IRS.gov site. The IRS offers several easy ways to pay taxes. Taxpayers can pay online, by phone or with their mobile device using the IRS2Go app, just to name a few.

Here are some options to pay:

Pay when you e-file using their bank account, at no charge, using electronic funds withdrawal.
Use IRS Direct Pay which allows taxpayers to pay electronically directly from their checking or savings account for free. They can choose to receive email notifications about their payments when they pay this way. Taxpayers should watch out for email schemes. IRS Direct Pay sends emails only to users who request the service.
Pay using a payment processor by credit card, debit card or digital wallet options. Taxpayers can make these payments online, by phone or through the IRS2Go app.
Pay over time by applying for an online payment agreement. Once the IRS accepts an agreement, the taxpayers can make their payment in monthly installments.

Still Phishing

Though it is a difficult time, that doesn’t mean the bad actors aren’t still active. Beware, the IRS has identified a new version of a phishing email scam targeting tax professionals.

The fake email tells you your EFIN has been put on a temporarily hold and warns it will be suspended unless you open an embedded document and confirm or deny a submitted Form 1040. The embedded “1040” document likely contains malware.

This is a good time to remember that all tax professionals are targets of cybercriminals seeking to steal client data or the practitioners’ identities. The fake emails are characterized by an urgent message (your EFIN will be suspended) and try to entice recipients to open a link or attachment. The IRS urges all tax professionals to be on alert and take security steps to protect their clients and their businesses. Review Publication 4557, Safeguarding Taxpayer Data, for how to be safer.

Some ways to protect your data:

Using the multi-factor authentication option offered by tax software to protect accounts from unauthorized access.
Use strong password protections on all devices.
Never open suspicious emails, links and attachments may carry malware.
Use strong security software and keep it updated.

Cannabis Deemed Essential Business

On Thursday, March 19, 2020 Governor Gavin Newsom issued a stay at home order to protect the health and well-being of all Californians and to establish a consistent approach across the state to slow the spread of COVID-19. This order went into effect on Thursday, March 19, 2020, and is in place until further notice.

The order identifies certain services as essential, including food, prescriptions, and healthcare. These services can continue despite the stay at home order. Because cannabis is an essential medicine for many residents, licensees may continue to operate at this time so long as their operations comply with local rules and regulations.

Any licensee that continues to operate must adopt social distancing and anti-congregating measures and must follow the CDC’s Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease at all times.

New Tax Deadline for Taxpayers

Last week there was word that tax payments would be delayed for taxpayers and late fees and penalties forgiven. Now we have a date and clarification that tax filings are automatically postponed. The decision came from Treasury and the IRS on account of Coronavirus Disease 2019 (COVID-19) emergency.

The Treasury Department and IRS are providing relief to all taxpayers who have Federal income tax returns and Federal income tax payments due on April 15, 2020. The April 15, 2020 deadline is postponed to July 15, 2020. Associated interest, additions to tax, and penalties for late filing or late payment will be suspended until July 15, 2020.

Affected Taxpayers do not have to file Forms 4868 or 7004. There is no limitation on the amount of the payment that may be postponed.

Time to Buy?

At the time of this writing we are in the midst of a stock market downturn, do to the coronoavirus, even so many financial pundits advise this might be a time to buy stock. It seemed like a good time to explore the how.

Like banking, investing in stock has gone online. You can invest in the stock market without ever having spoken to another human being. We are not saying that is good or bad, just that it is possible. If you want financial advice in person there are still a wealth of resources for you out there.

First thing you must have is some sort of brokerage account. If you do a little research you will find that there are several apps available now. Among them TDAmeritrade, and e-trade. What to look for? Which stock market will the app allow you to purchase on? The market we most commonly think of is the New York Stock Exchange (NYSE). But there are several worldwide and even in the US, such as commodities markets. On the NYSE you will have a wide range of companies to choose from. But first you have to set up an account.

Once you have selected the app you would like to use, you will set up an account and then link a bank so you can fund your purchases. Usually the app will require your banking information and then send you a few cents to test the link. Then except those cents to be clawed back. Now you can send money electronically to your trading account.

Next research. You should do some research on every company you might want to purchase stock from. You will want to look at the company’s annual report – you may even be able to look at this through your app – and determine what the company has been up to and whether you believe they are headed in the right direction. As we have seen, markets can fluctuate for reasons not having anything to do with the company itself, so best to use your own judgment and values to determine if the company seems like they are doing well. Do you like their product? Do you like their CEO? Have they had a good year so far?

Once you determine what company you want to buy into then you will determine how much you want to put in. Usually you will put in a market request to buy – so, say you decided to invest in Bob’s Company, and the shares sell at $100 per 100 shares. If that is OK with you, you go ahead an put in your buy order at market price. If, however you like Bob’s Company but you think 100 shares are only worth $90 then you can put in a limit order. And usually you can select a time frame – so when the stock goes to that number or lower your purchase will kick in.

Then once you have stocks, hold on. Generally speaking, stocks are investments for the long term. Even in a downturn such as we are experiencing. Given enough time stocks will recoup and go back to the price at which you purchased. And, in time, can exceed your purchase price.

Day traders and stock brokers may engage in the dramatic day to day buying and selling of stocks, but in general that is not for us mortals, we buy and hold on and hope for a pretty good increase round about the time we need to retire or invest in our own company or a home or whatever the goal.

Tax Filing Payment Extension

Every year taxes are due by midnight April 15, unless that date falls out on a weekend or holiday, in which case it’s pushed back a number of days. Who doesn’t remember the lines to the mailbox at 11:58pm? If you can’t make the deadline though you can request an extension, which buys them an additional six months to submit their returns without facing a failure-to-file penalty. That extension request must be received by April 15th however.

But this year, because of the coronavirus response, filers can take an extra three months to pay the IRS any amounts due. That could be a lifeline for the millions of Americans who are currently scrambling to hang onto their paychecks, or those who have already taken a hit on their income. Your filing or extension however it still due by April 15th.

Using one of the IRS resources for preparing and filing your taxes can make it easier. You can go to IRS.gov and find easy ways to file online, find help, find a tax preparer and even links to software so that you can file on your own.