SBA reopens EIDL program to small businesses and nonprofits
The EIDL program may not have received as much attention as the PPP, but it’s equally valuable to small businesses and nonprofits striving to remain operational during the ongoing public health and economic crisis. We can help you determine whether you’re eligible and, if so, complete the application process.
What qualifies as a “coronavirus-related distribution” from a retirement plan?
The CARES Act allows qualified people to take “coronavirus-related distributions” from retirement plans without paying tax. So how do you qualify? You can take up to $100,000 in coronavirus-related distributions made from an eligible retirement plan between Jan. 1 and Dec. 30, 2020. If you repay the distribution to your IRA or plan within 3 years, you can treat it and the later recontribution as a tax-free rollover. In Notice 2020-50, the IRS explains that a qualified person is one who is diagnosed (or whose spouse/dependent is diagnosed) with COVID-19. Alternatively, it is someone who experiences adverse financial consequences due to COVID-19. For more details: https://bit.ly/37STcwK
Re-evaluate your company’s competitiveness in a changed economy
Just about every business owner’s strategic plans for 2020 look far different now than they did heading into the year. The COVID-19 pandemic has changed the economy in profound ways. As your business moves forward in this uncertain environment, re-evaluate its competitiveness. Start by objectively examining the successes, failures, strengths and weaknesses of leadership. Also review and discuss the state of relationships with customers, suppliers, lenders, advisors and the local community. Examine your supply chain and access to cutting-edge technology. Finally, identify how COVID-19 and the resulting economic fallout is affecting your industry’s outlook. Contact our firm for assistance.
If you’re selling your home, don’t forget about taxes
Traditionally, spring and summer are popular times for selling a home. Unfortunately, the COVID-19 crisis has resulted in a slowdown in sales. The National Association of Realtors reports that existing home sales in April decreased 17.2% from April 2019. Still, many people are selling this year. If you’re one of them, it’s a good time to review the tax implications. If you’re selling your principal residence, you can exclude up to $250,000 ($500,000 for joint filers) of gain, so long as you meet certain tests. For example, you must have owned the property for at least 2 years during the 5-year period ending on the sale date. A loss generally isn’t deductible. Contact us with questions.
Good records are the key to tax deductions and trouble-free IRS audits
If you operate a small business, you need to keep records of your income and expenses. You should carefully record them in order to claim the full amount of tax deductions to which you’re entitled. You also want to make sure you can defend the amounts on your tax returns if you’re ever audited by the IRS. Certain expenses, such as automobile, travel, meals and office-at-home expenses, require special attention because they’re subject to special recordkeeping requirements or limits on deductibility. Contact us if you need assistance retaining adequate business records. Taking a meticulous approach to how you keep records can protect your deductions and help make an audit much less painful.
PPP Flexibility Act eases rules for borrowers coping with COVID-19
The Small Business Administration launched the Paycheck Protection Program (PPP) back in April to help companies reeling from the economic impact of the COVID-19 pandemic. Created under a provision of the CARES Act, the PPP is available to U.S. businesses with fewer than 500 employees. On June 5, the president signed into law the PPP Flexibility Act. This new law makes a variety of important adjustments that ease the rules for PPP borrowers. These include extending the covered period that partly determines 100% loan forgiveness and reassuring borrowers that delayed payment of employer payroll taxes is still available to businesses that receive a PPP loan. Contact us for more information.
Rioting damage at your business? You may be able to claim casualty loss deductions
The recent riots around the country have resulted in many storefronts, office buildings and business properties being destroyed. In the case of stores and businesses with inventory, looters stole products after ransacking property. A commercial insurance property policy should generally cover some, or all, of the losses. But a business may also be able to claim casualty property loss or theft deductions on its tax return. Here’s how a loss is figured for tax purposes: Your adjusted basis in the property MINUS any salvage value MINUS any insurance or reimbursement you receive or expect to receive. It’s important to have proof of losses. Contact us for more information about your situation.
Seniors: Can you deduct Medicare premiums?
If you’re age 65 and older, and you have basic Medicare insurance, you may need to pay additional premiums to get the level of coverage you want. The premiums can be costly, especially if you’re married and both you and your spouse are paying them. But there may be a silver lining: You may qualify for a tax break for paying the premiums. However, it can be difficult to qualify to claim medical expenses on your tax return. For 2020, you can deduct medical expenses only if you itemize deductions and only to the extent that total qualifying expenses exceeded 7.5% of adjusted gross income. Contact us if you want more information about deducting medical expenses, including Medicare premiums.
Paycheck Protection Program (PPP) Update
Paycheck Protection Program Flexibility Act Signed Into Law President Trump signed into law the Paycheck Protection Act on Friday, June 5th addressing some concerns of the Paycheck Protection Program and its procedures. Here are the meaningful adjustments that have now been made to the program: Extension of time to use funds from 8 to 24 […]
Does your company have an emergency succession plan?
Succession planning is ideally a long-term project. But, as the novel coronavirus (COVID-19) pandemic has made clear, a business owner can suddenly vanish because of an illness or other disaster. That’s why every company needs an emergency succession plan. Doing so starts with identifying an emergency successor who can take on a credible leadership role. Consider the “domino effect;” that is, who will take on your emergency successor’s role when he or she is busy running the company? An emergency succession plan also needs to be transparent. Thoroughly discuss the role with your successor, and create a communications strategy for employees, customers and suppliers. Contact us for help.
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