IRA account value down? It might be a good time for a Roth conversion
The coronavirus (COVID-19) pandemic and the ensuing stock market downturn has caused the value of some retirement accounts to decrease. But if you have a traditional IRA, a downturn may provide a valuable opportunity: It may allow you to convert to a Roth IRA at a lower tax cost. Roth IRA qualified withdrawals are tax free and you don’t have to begin taking RMDs after you reach age 72. But if you convert to a Roth, you’ll owe income tax on the converted amount. If your traditional IRA has lost value due to a market downturn, converting to a Roth now will minimize the tax, and you’ll avoid tax on future appreciation. Interested? Contact us to see whether a conversion is right for you.
Adjust your expectations of business interruption coverage
If you maintain business interruption insurance for your company, you may wonder whether the COVID-19 pandemic is an “applicable event” that would enable you to file a claim and receive a payout. Many insurers are saying no, claiming the “force majeure” legal defense. This means unexpected external circumstances are preventing them from meeting their obligations. They also argue that the COVID-19 crisis doesn’t qualify as a physical loss. Lawsuits have already been filed challenging their position. To decide whether to proceed with a claim, review your policy carefully and be prepared to document the adverse financial impact of the pandemic on your company. Contact us for help.
IRS extends some (but not all) employee benefit plan deadlines
The IRS recently issued Notice 2020-23, expanding on previously issued guidance extending certain tax filing and payment deadlines in response to the novel coronavirus (COVID-19) crisis. The guidance applies to specified filing obligations and other “specified actions” that would otherwise be due on or after April 1, 2020, and before July 15, 2020. It extends the due date for specified actions to July 15, 2020. These include any “specified time-sensitive action” listed in Revenue Procedure 2018-58. Regarding employee benefits, the guidance addresses Form 5500 filings, retirement plan corrections and Health Savings Account rollovers. Contact us for more information.
Mapping Out Your SBA PPP Loan Forgiveness Strategy
So, you’ve applied for and been approved for a Payroll Protection Program loan. Now what? The next 8 weeks are crucial to maximize your eligible loan forgiveness. This is the time to map out your strategy! A few things to note and some things that still need to be clarified: For any amount of your […]
COVID-19: IRS announces more relief and details
In the midst of the coronavirus (COVID-19) pandemic, Americans are focusing on their health and financial well-being. To help with the impact facing many people, the government has provided a range of relief. On its Twitter account, the IRS announced that it deposited the first Economic Impact Payments into bank accounts on April 11. “We know many people are anxious to get their payments; we’ll continue issuing them as fast as we can,” the agency added. There’s also a new online tool on the IRS website for people who didn’t file a 2018 or 2019 federal tax return because they didn’t have enough income or otherwise weren’t required to file. You can access the tool here: https://bit.ly/2JXBOvM
What are the key distinctions between layoffs and furloughs?
As businesses across the country grapple with the economic fallout from the coronavirus (COVID-19) pandemic, many are facing the difficult choice of whether to lay off employees or furlough them. Layoffs are the ostensibly permanent termination of employees, while a furlough is a mandatory or voluntary suspension from work without pay for a specified period. Before furloughing workers, investigate whether you need to remit a “final” paycheck and how medical coverage is affected under COBRA and the Affordable Care Act. If you’re a midsize employer thinking about layoffs, be sure to comply with the Worker Adjustment and Retraining Notification Act. Contact us if you need assistance.
IRS announcing that second quarter estimates are extended from June 15 to July 15
IRS extends more tax deadlines to cover individuals, trusts, estates corporations and others IR-2020-66, April 9, 2020 WASHINGTON — To help taxpayers, the Department of Treasury and the Internal Revenue Service announced today that Notice 2020-23 (PDF) extends additional key tax deadlines for individuals and businesses. Last month, the IRS announced that taxpayers generally have until July […]
Relief from not making employment tax deposits due to COVID-19 tax credits
The IRS has issued guidance providing relief from failure to make employment tax deposits for employers entitled to refundable tax credits provided under two laws. The two laws are the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security Act. Under the laws, the penalty for failure to deposit the employer share of Social Security tax is waived in anticipation of the allowance of the refundable tax credits. IRS Notice 2020-22 provides that an employer won’t be penalized for failing to deposit employment taxes related to qualified leave or qualified retention wages in a calendar quarter if certain requirements are met. Contact us for more information.
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.
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