CARES ACT changes retirement plan and charitable contribution rules
The CARES Act contains a range of relief, notably the “economic impact payments” that will be made to people under a certain income threshold. But the law also makes some changes to retirement plan rules. The additional 10% tax on early distributions from IRAs and 401(k) plans is waived for distributions made between Jan. 1 and Dec. 31, 2020 by a person who (or whose family) is infected with COVID-19 or is economically hurt by it. Penalty-free distributions are limited to $100,000, and may, subject to guidelines, be re-contributed to the plan or IRA. Income from the distributions may be spread out over 3 years. Other rules may apply. Contact us with any questions.
Paycheck Protection Program Loan (PPP) Application from Small Business Association (SBA) – Now Open as Updated Guidance Becomes Available
After much discussion the SBA has now opened its application process for SBA lenders to begin enabling small business owners to begin applying for the Paycheck Protection Plan Loan. As this the program opened additional final interim guidance was issued clearing up several key ambiguities in the program and its process.
You should note that most lenders are handling the loan requests prioritizing their current lending relationships first, so that is the best place for you to start.
Economic Injury Disaster Loan (EIDL) Grant Application from SBA Now Open as Updated Guidance Becomes Available
The Economic Injury Disaster grant is now available, and, in most cases, we recommend that qualified businesses apply for this grant. The process is very easy and straightforward and normally takes less than 30 minutes, but you should be prepared before you apply. Here is some quick information that might be useful SBA ECONOMIC INJURY DISASTER (EIDL) ADVANCE […]
Answers to questions about the CARES Act employee retention tax credit
The recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the COVID-19 pandemic. The employee retention credit is available to employers, including nonprofits, with operations that have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis. The IRS released FAQs about the credit. Here’s a link: https://bit.ly/2R8syZx . Contact us if you need assistance.
Using your financial statements during an economic crisis
The coronavirus (COVID-19) pandemic has forced business owners to reevaluate their operations and make difficult decisions. One place to look for information to help keep your business afloat during the crisis is your financial statements. Your cash flow statement can help determine whether your revenue will cover ongoing operating expenses. If not, consider applying for an SBA loan. Your balance sheet can reveal assets that need to be written down and the potential for insolvency, which happens when liabilities exceed assets. And your income statement can provide insight into potential cost-cutting measures. We can help you evaluate your financial statements and update the numbers.
The new COVID-19 law provides businesses with more relief
On March 27, President Trump signed into law another coronavirus (COVID-19) bill, which provides extensive relief for businesses and employers. The new law provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the crisis. It also allows eligible taxpayers to defer paying the employer portion of Social Security taxes through Dec. 31, 2020. Instead, employers can pay 50% of the amounts by Dec. 31, 2021 and the remaining 50% by Dec. 31, 2022. In addition, there are changes to net operating losses, the business interest expense deduction and more. Other rules and limits may apply. Contact us if you have questions about your situation.
Cash payments and tax relief for individuals in new law
A new law signed March 27 provides a variety of tax and financial relief to Americans during the coronavirus (COVID-19) pandemic. The CARES Act provides an eligible individual with a cash payment of: $1,200 ($2,400 for eligible married couples filing jointly) plus $500 for each qualifying child. The payment is reduced by 5% of adjusted gross income (AGI) in excess of: $150,000 for a joint return, $112,500 for a head of household, and $75,000 for all other taxpayers. Under the rules, the payment is completely phased-out for a single filer with AGI exceeding $99,000 ($198,000 for for joint filers with no children and $146,500 for a head of household with one child). Contact us with questions.
Brief recap of key provisions of the CARES Act
Here is our brief recap of just some key provisions of the CARES Act, signed into law by President Trump This past Friday March 27th, that may be of immediate help to you during these trying times. The Paycheck Protection program is an SBA Loan program which offers loans for small businesses with fewer than […]
Extension of April 2020 Michigan income tax filing deadlines
The novel coronavirus (COVID-19) is a respiratory disease that can result in serious illness or death. It is caused by a new strain of coronavirus not previously identified in humans and easily spread from person to person. There is currently no approved vaccine or antiviral treatment for this disease. On March 10, 2020, the Michigan […]
Filing and Payment Deadlines Questions and Answers
In Notice 2020-18 (PDF), the Treasury Department and the Internal Revenue Service (IRS) announced special Federal income tax return filing and payment relief in response to the ongoing Coronavirus Disease 2019 (COVID-19) emergency. Below are answers to frequently asked questions related to the relief provided in the Notice. These questions and answers will be updated periodically […]