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Get Your Money: Ensure You Recieve a Stimulus Payment

Non-filer tool launched by IRS

The IRS recently announced the launch of web sites for non-tax filers to register to receive their economic impact payment and a new Get My Payment tool. Here is what you need to know.

Background

As a response to the coronavirus pandemic, the government is sending $1,200 to single taxpayers with income less than $75,000 ($98,000 with phase outs). $2,400 is being sent to married taxpayers with income less than $150,000 ($198,000 with phase-outs). An additional $500 is being sent for each child under the age of 17.

The Problem

The payments are being made based on 2019 or 2018 tax returns. If you do not need to file a tax return, you run the risk of not receiving this payment. Additionally, getting payments out to everyone is technically complex. The IRS must look at both this years and last years tax filings PLUS they are directed by Congress to match these files against two years of Social Security filings for seniors. Not an easy task!

The Solution

The IRS worked to launch a way to create a way to register to receive your payment and to determine the status of your payment. You can find the sites here:

For non-filers: Submit information to receive Economic Impact Payment

Payment status and direct deposit registration: There is also an IRS provided Get Your Payment tool to register to receive your payment via direct deposit.

It can be found here: Get My Payment Tool

This tool will also be used to search on the status of your payment.

Who should use

If you fall into one of these cases, you need to review whether it makes sense to use this site.

Not required to file. If you have not filed a tax return in either 2018 or 2019, using this tool or other tax filings is the only way to receive the payment.

College students. If you are not a dependent on someone else’s tax return, you need to look into using the tool. If you are a dependent, It may also be worth a conversation to see if you can or should change your filing status in 2019 in order to receive this payment.

Non-filer. Even if you know you need to file a tax return, but have not yet done so, consider using the tool. You will still need to file a tax return, but in the meantime, you can receive your payment.

Seniors. Seniors that do not file tax returns in 2018 or 2019 will eventually receive the payment based upon their form 1099-SA or railroad retirement information. The site asks you not to register, but you may receive the payment sooner AND protect your identity from would be thieves by filing a tax return.

To check on status or speed things up. Want faster payment? Payment not yet received? Use the Get My Payment tool.

The Economic Impact Payments are now officially being sent out, so the sooner you let the IRS know that your payment should be included, the sooner your payment will arrive.

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Stimulus Payments are Underway

Taxpayers are beginning to receive their $1,200 one-time Economic Impact Payment plus $500 for each dependent under the age of 17.

First round of payments are underway

Payments have begun hitting the checking accounts of taxpayers who included their bank’s routing and account numbers on their 2019 and 2018 tax returns. So now is the time to starting checking your bank account to see if your payment is processed.

IRS launches new simple filing site

For those who have not filed a tax return for 2019, there is an opportunity to receive your stimulus payment a bit more quickly. There is a new simple filing site with a link to a simple filing form. This will provide the IRS with the information necessary to issue your stimulus check via direct deposit. The alternative is waiting up to several months to get your stimulus payment via mail in the form of a physical check.

Who should use the simple tax filing site site

Consider using the simple file site to provide direct deposit information in the following situations:

  • You have not filed a 2018 or 2019 tax return.
  • You have not yet filed a 2019 tax return.
  • You are not required to file either a 2018 or 2019 tax return. In this case, you will never receive your stimulus check unless you use this new simple filing form.

A special note for non-filing seniors

The Treasury has directed the IRS to provide payments to seniors based on Form 1099-SSA reporting as well as tax filings. This creates an added level of complexity for the IRS to figure out who to pay and who has already been paid. While they are requesting SSA-1099 recipients without 2018 and 2019 tax returns to hold off filing a simple tax return, you may still wish to do so if you need your payment more quickly. Remember, this filing also protects your Social Security number from being used by identity thieves! Just be prepared to return an extra payment should your tax filing confuse their systems and create a double payment.

Remember, it is going to take some time for the IRS to process all these payments, especially when their data is constantly shifting as people continue to file tax returns, including their new simple filing form.

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Second Quarter Estimated Payments Delay

June 15 deadline moved to July 15

The IRS recently announced a delay in the deadline to file 2nd quarter estimated tax payments.

Background

The IRS issued a tax filing and tax payment delay due to the coronavirus pandemic, from April 15, 2020 to July 15, 2020. Many payments are included in this delay for both individuals and small businesses. It includes filing of all tax returns, the related payments and all estimated payments typically due on April 15.

The problem

By moving the 1st quarter estimated tax payments from April 15 to July 15, the 1st quarter estimated payments were then actually due one month later than the 2nd quarter estimated payment deadline!

Current situation

With IRS notice 2020-23, the 2nd quarter estimated payment due date is now moved July 15, 2020. So you will need to plan accordingly. This includes both individual and corporate payments.

Reminder, just because the IRS grants a payment delay, does not ensure your state will follow suit. So pay attention to the state's filing situation as well.

Should you have any questions, please call.

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Trying to Save a 2016 Tax Refund? Read This!

In recent IRS notice 2020-23, the IRS is granting a delay in claiming 2016 tax refunds until July 15, 2020.

The problem

If you do not claim a refund in time, you lose it forever. So on April 15, 2020 if you are owed a refund for 2016 and do not file a tax return to receive it, you lose your money forever!

More time to file

Because of the coronavirus pandemic, the tax filing date for 2019 is moved from April 15 to July 15. What is now clear, is that with this filing date move, it also includes the statute of limitations to claim any unclaimed refunds for the 2016 tax year.

What to do now

If you did not file a tax return for 2016 and you believe you are owed money, you now have 90 more days to claim it. But don’t delay! The IRS is very strict on these dates. If you are even a day late, your money is lost forever.

While the IRS is granting this delay, it is not clear if states are following suit. So, if you have a state tax refund you need to understand their deadlines as well.

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Key Coronavirus Tax Changes

What every taxpayer should know

In addition to filing delays and a one-time stimulus payment, the IRS is implementing many changes in response to the coronavirus pandemic. Here are some of the major topics that could affect you and your family.

Early distribution penalty waived

The 10% early distribution penalty on up to $100,000 of retirement withdrawals for coronavirus-related reasons is waived during 2020. New provisions allow tax liabilities on these distributions to be paid over a three-year period. The new rules also allow individuals to return these distributions to the retirement account over a three-year period and not be subject to annual contribution limits.

Action: This could be a great way to handle emergency payments until you receive a stimulus check, unemployment payments, or a pending small business loan.

Required Minimum Distributions (RMDs) waived for 2020

Required minimum distributions (RMDs) in the year 2020 for various retirement plans is suspended. The corresponding 50% penalty associated with not taking an RMD is also suspended in 2020.

Action: Taking out distributions when the market takes a tumble can hurt future retirement income for many years. This change allows you to wait to let the value in your retirement account rebound before you withdraw funds.

IRS Installment agreement suspension

The IRS announced suspension of payments of all amounts due from April 1 through July 15, 2020 and will not default any installment agreement during this period. Interest will continue to accrue on all installment agreements.

Action: Being on the bad side of the IRS in never fun. If you currently have an IRS installment agreement, look to take advantage of this delay.

Offers-in-compromise

The IRS will allow you until July 15, 2020 to provide additional requested information for any pending offers-in-compromise (OIC) and will not close out the OIC during this time without your consent. The IRS is also suspending any payments due under an OIC until July 15, 2020.

Enforcement Activities Suspended? Not so fast...

The filing and enforcement of liens and levies will generally be suspended. However, IRS Revenue Officers will continue to pursue high income non-filers and initiate other actions when warranted.

No new audits

The IRS will not initiate new audits during this time, but will act to protect the statute of limitations.

Much is happening during this unique time in our country's history. Rest assured, as changes are made you will be informed. In the meantime, please keep yourself and your family safe.

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Stimulus Payments: The Senior Problem

Help seniors get paid. Read this NOW!

There is confusion regarding whether seniors who receive Social Security have to file a simple tax return to get their $1,200 stimulus check. The answer from the U.S. Treasury Department is NO.

So if you received a 1099-SSA or RRTA in 2019 or 2018, the payment will be automatic….eventually.

The problem

The IRS challenge is to send out one-time coronavirus stimulus payments quickly. Using 2018 and 2019 tax-filing information is the easiest way to do this. So if you haven’t had to file a tax return in either 2018 or 2019, you won’t receive a payment. The IRS solution to this problem is to have you file a simple tax return. Unfortunately, the bill and the Treasury Department state that the IRS must also use form 1099-SSA (Social Security Retirement payment) filings by themselves to automatically send payments.

So how does the IRS make sure they do not double pay? This could happen since those seniors who DO file a tax return (and receive a 1099-SSA) will already be paid. The answer? A massive undertaking to match two large databases and identify those that STILL NEED TO BE PAID!

Can you image the cost and delays this is going to present to the IRS?

YOUR solution: File a tax return!

If you want to ensure a speedy payment, file a tax return - even if you do not need to do so. This will effectively solve the IRS system problem for your account. The worst-case scenario is you are paid twice and then you simply return the extra payment.

So consider filing your tax return or helping a senior citizen who does not file taxes, file a simple tax return. Plus there is the added benefit of protecting their IRS tax account from potential identity thieves!

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Tax Deadlines Move from April to July

What you need to know now!

Tax deadline announcements move tax filing and payments from April 15th to July 15th, per U.S. Treasury Secretary Steven Mnuchin. These announcements were made on Tuesday, March 17, 2020 and Friday March 20, 2020, with payment and penalty delays confirmed by an IRS notice.

Here is what you need to know

  • While the filing deadline for individual income tax returns, Form 1040, is April 15, 2020 per IRS notice 2020-17, published this Wednesday, the Treasury Secretary announced moving Tax Day to July 15, 2020 on Friday March 20, 2020.*
  • Individuals who owe the IRS money will be able to defer up to $1 million in payments for 90 days without interest or penalties. The new effective payment due date is July 15, 2020.
  • Corporations who owe the IRS money will be able to defer up to $10 million in payments for the same 90 days without interest or penalties.
  • The delay also includes first quarter, 2020 estimated tax payments for individuals. These payments are now due on or before July 15, 2020. This estimated payment delay DOES NOT apply to corporations.

* Late Breaking Alert: At 9:30 CST, Friday March 20, 2020 Treasury Secretary, Steven Mnuchin tweeted the following: "At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties." The IRS retweeted this message.

What it means for you

While the federal government grants you an additional 3 months to pay your 2019 taxes, you may wish to file an extension or still file your tax return by April 15. Here are some thoughts on different situations.

You anticipate a refund. For now, the IRS is issuing refunds as normal. For e-filers, refunds are often sent in less than three weeks. If the IRS is forced to scale back its operations for safety reasons, your refund could be delayed.

A better solution: file an extension. If you cannot complete your tax return by April 15, consider filing an extension, even with the Treasury Secretary's announcement. This moves your filing deadline to October 15. In the case of an extension under these new rules, your tax return would be due on or before October 15, 2020, but your tax payment is now due on or before July 15, 2020.

What about the audit window? The IRS normally has three years to audit a tax return. The three-year window to audit a return typically starts on either the tax return due date or the filing date, whichever is later. If shortening the audit window is important to you, consider filing sooner versus later as no one is clear what these delays in filing will do to audit rights.

What will states do? States are rolling out their own guidelines for extensions. Some are waiting on the IRS, while others are acting independently. Since most states require copies of federal tax return information, be prepared to still file by April 15. Remember, even if you wait until later to file your federal return and pay your tax, you may have to file your state and/or local return sooner.

What if I get a penalty anyway? Affected taxpayers subject to penalties and additional tax despite this relief may seek a waiver of them.

Rest assured, as the rules and deadlines change, updates will be provided. In the meantime, please stay safe during this challenging time.

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COVID-19 Stimulus Payments. READ THIS NOW!

The Coronavirus Aid, Relief, and Economic Security (CARES) Act recently signed into law provides a one-time payment, among other items, to individuals to help ease the economic strain caused by the coronavirus epidemic.

Here are the details of the stimulus payment initiative.

  • WHO QUALIFIES TO RECEIVE A PAYMENT? A one-time payment of $1,200 will be sent to most adults. For every qualifying child under age 17, families will receive an additional $500. Retirees and people on disability are also eligible to receive a payment.
  • WHEN WILL I GET MY PAYMENT? The IRS hopes to get the first batch of payments out the week of April 6. It may take some time for everyone to get their checks, assuming everything goes as planned.
  • HOW ARE PAYMENTS BEING MADE? If you included your bank account and routing information on your 2019 tax return, you will receive your stimulus payment via direct deposit. If you haven't filed your 2019 tax return, the IRS will use information from your 2018 tax return. If you did not include your bank account and routing information on either your 2019 or 2018 tax returns, the IRS will allow you to request direct deposit from a screen (under development) from their website. All others will receive their payment via a check in the mail.

Alert! Invalid bank information. If you have not filed your 2019 tax return AND the direct deposit information on your 2018 tax return is no longer valid (i.e. you opened a new bank account), you will need to take action immediately! If you do nothing, the bank deposit will, hopefully, be rejected and you will receive your check in the mail. Expect a delay, however, as it may take several months to receive a check by mail. You can also try calling the IRS to update your information.

  • WILL I GET THE ENTIRE AMOUNT? As with other government programs, there is an income phaseout. Here are the thresholds:

Single adults with income of $75,000 or less get the full $1,200. The $1,200 payment is reduced by $5 for every $100 in income above $75,000. Full income phaseout is $99,000.

Married couples with income of $150,000 or less get the full amount of $2,400. The payment is reduced by $5 for every $100, making the full payment phased out at $198,000.

Head of Household adults (normally single adults with children or other dependents) will receive the full $1,200 payment if they earn less than $112,500. Reduced amounts will go out to Head of Household adults who earn up to $136,500.

  • HOW WILL MY INCOME BE CALCULATED? Your 2019 tax return will be used to determine your income for purposes of whether you receive the full amount of the stimulus check and how many qualifying children you have. If you haven’t filed your 2019 tax return, your 2018 tax return will be used.

Alert! Don't use my current situation. It may make sense to get your 2019 tax return in immediately. Figure out if phaseouts using last year's information lowers your payment amount. If so, you may wish to file your 2019 now. So pull out last year's return and take a look!

Senior Alert! Seniors who did not file a tax return in 2018 or 2019 will automatically receive the payment based upon forms 1099-SSA and RRB-1099s. ( An April 1, 2020 U.S. Treasury press release clarifies much confusion on this topic.)

Alert! File a tax return. If you have low income or someone who does not typically file a tax return, you may wish to do so. A simple tax filing is all that is needed to ensure you receive the stimulus payment. Eventually, instructions to do this will be available on www.irs.gov/coronavirus.

  • ARE THE PAYMENTS TAXABLE? No. These payments are not taxable.

Remember, this is only one of the many relief components in recently passed legislation. There are also unemployment benefits, small business benefits and much more to come.

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COVID-19 Bill Enhances Your Unemployment Benefits

What you need to know!

The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act provides individuals and businesses significant financial relief from the financial strain caused by the coronavirus epidemic.

Here is a snapshot of the unemployment benefits section of the bill and how it affects individuals and businesses.

  • WHO QUALIFIES TO RECEIVE STATE UNEMPLOYMENT BENEFITS? In addition to full-time workers who are laid off or furloughed, the Act provides individuals who are not already eligible for state and federal unemployment programs, including self-employed individuals and part-time workers, a set amount of unemployment compensation.
  • HOW MUCH WILL I RECEIVE?There are two different components to the new law’s unemployment benefits:
    1. Each worker will receive unemployment benefits based on the state in which they work, and
    2. In addition to their state unemployment benefits, each worker will receive an additional $600 per week from the federal government.
  • HOW WILL BENEFITS FOR SELF-EMPLOYED WORKERS BE CALCULATED? Benefits for self-employed workers are calculated based on previous income and are also eligible for up to an additional $600 per week. Part-time workers are also eligible.
  • HOW LONG WILL THE STATE UNEMPLOYMENT PAYMENTS LAST? The CARES Act provides eligible workers with an additional 13 weeks of unemployment benefits. Most states already provide 26 weeks of benefits, bringing the total number of weeks that someone is eligible for benefits to 39.
  • HOW LONG WILL THE FEDERAL PAYMENTS OF $600 LAST? The federal payment of $600 per week will continue through July 31, 2020.
  • HOW DO I APPLY FOR UNEMPLOYMENT BENEFITS? You must apply for unemployment benefits through your state unemployment office. Most state applications can now be filled out online. Workers who normally don't qualify for unemployment benefits, such as self-employed individuals, need to monitor their state's unemployment office website to find out when they can apply, as many states need to update their computer systems to reflect every type of worker who is eligible to collect unemployment benefits under the CARES Act.

What to do NOW!

If you have lost your job, you must file for unemployment with your state as soon as possible. State offices and websites are being slammed, so the sooner you get in the queue the better for you and your loved ones.

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Additional Paid Leave for Workers Affected by COVID-19

What you need to know!

The Families First Coronavirus Response Act is a new program that offers COVID-19 assistance for both employees and employers.

This new law provides businesses with fewer than 500 employees the funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members.

Here is a summary of the new law’s benefits for employees and employers:

  • Paid sick leave for workers. The new law provides employees of eligible employers two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay ($510 daily limit applies) where the employee can’t work because the employee is quarantined and/or experiencing COVID-19 symptoms and seeking a medical diagnosis.
  • Paid leave for workers. Employees can receive two weeks (up to 80 hours) of leave at two-thirds of the employee’s pay ($200 daily limit applies) if they need to care for someone in the following situations: The need to care for an individual subject to quarantine, to care for a child whose school is closed or childcare provider is unavailable for reasons related to COVID-19.
  • Extended leave. In some instances, an employee may receive up to an additional ten weeks of expanded paid family and medical leave at two-thirds the employee’s pay ($12,000 overall twelve week payment limit applies).
  • Companies will get paid back. Businesses who pay employees the mandatory sick and childcare leave according to the new law will get reimbursed through a payroll tax credit.

What it means for you

  • Employees can take the necessary time to recover from being infected with COVID-19, or to care for a loved one, without fear of losing their job or salary.
  • Employers can help their employees financially while navigating COVID-19 related shutdowns.

What you need to do now

EMPLOYEES. To take advantage of the Act's paid leave provisions, you must provide your employer with documentation in support of your paid sick leave. There is yet no official application that needs to be completed. If you believe that your employer is required to provide paid leave but is not making paid leave available, or for other questions or concerns, you may call the Department of Labor's Wage and Hour Division at 1-866-4US-WAGE or visit www.dol.gov/agencies/whd.

EMPLOYERS. While the details are being worked out on how to implement these new rules, here is what you need to do now:

  1. Keep detailed records - Be prepared to defend your request for federal assistance. Keep good records of who's asked for paid time off because of COVID-19 related circumstances. Ask your employee to provide a doctor's note when appropriate, along with a narrative written by the employee describing who in their family is infected or suspected of being infected with COVID-19 along with symptoms. Make sure the note is dated and relates to an approved reason for leave.
  2. Talk to your payroll provider - If you have someone doing your payroll, they are often the first ones who will know how you will receive reimbursement. This new law will take time to fully roll out. Payroll companies will eventually issue guidance on how to report paid leave provided under the Families First Act and which forms need to be completed to obtain the corresponding tax credits.
  3. Post this notice! - Employers MUST post a notice of the Families First labor requirements in a conspicuous place on its premises. Click here to download and print this notice.
  4. E-mail the notice! - An employer may satisfy the posting requirement by e-mailing or direct mailing the notice to employees, or by posting this notice on an employee information internal or external website. If your employees are working from home, this may be the only way to let them know the benefit exists.

Remember, there are upper limits to compensation that you may need to review and there are many other federal programs being rolled out. It will take time to implement them. Be patient, be safe and stay alert for any updates.

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Solving Problems with your PPP Loan Application

Source free money to help your business survive

Many small businesses have their Payroll Protection Program Loan (PPP Loans) applications already approved by their bank and the Small Business Association (SBA). However, there are just as many small businesses that are confused, frustrated, and stuck! Here are some ideas to help:

Background

As part of the coronavirus stimulus package, the federal government is offering loans up to 2.5 times your monthly payroll and related expenses in a fast track loan. If you retain your employees, much of the loan can be forgiven. Unfortunately, the high demand and rushed process to set up the program is creating havoc.

Some ideas to unplug your process

Remove the application plug. If you don’t have the required information, make collecting it a priority and get it done! Here are common things you need:

  • 2019 quarterly payroll 941 reports or the equivalent
  • 2019 financials proving payroll, and other core expenses
  • 2019 1099 filings and related form 1096
  • Bank provided excel or similar file that calculates the loan limit and # of full time employees (FTE)

Remember this could be FREE money! Make getting information a priority …TODAY!!

Unplug the bank bottleneck. Is your bank the hold up? Here are the common problems.

  • Your bank is not an approved SBA lender
  • Your bank is focusing on large customers first
  • You don’t have a business banker that knows you
  • You don’t have an account at the bank
  • Your bank is unsure about what they will require
  • Your bank is too small

Your action:

1st: Understand your bank’s status. What problem is holding up your request?

2nd: Determine if the problem can be immediately solved. If so, stay on it and keep communicating with your lender until they confirm your application has been submitted to the SBA.

3rd: If not solved OR you get the run around, MOVE! Look for a bank or former bank that is using this situation to build their new customer base. The U.S. Treasury has also approved non-banks to participate in the lending program, such as Cross River, Divvy, Quickbooks Capital and Ready Capital. If you can't find a bank to take your application, consider these non-bank options.

4th: Don’t confuse the SBA by having multiple loan requests. It could knock you out, so keep your efforts coordinated.

I don’t think my business will benefit. Too many small businesses don’t think the PPP loan will work for them because they don’t think they will have enough future payroll to translate the loan into repayment forgiveness. This is a big mistake. Here is what to do now:

  • Apply anyway. You are not committed to the loan until you are approved and sign loan papers. So the no go loan decision should be made AFTER you apply, not before.
  • Do the math. Remember there are no costs to apply for this loan. Your cost will be the deferred interest until payments are required. Remember, you can repay what you don’t use without penalty. So, if your interest cost is lower than the amount of loan forgiveness, it might still provide your business with free funds. Plus if you re-hire employees by the end of June you can still benefit.

It’s not too late attitude. The worst bottleneck of all is thinking it is too late to apply. Yes, it is possible that the funds will be used up if you come late to the party. But don’t give up until the funds are gone. And even then, get your application approved by a bank. Who knows, if you miss this round, you will be at the head of the line if additional funds are made available.

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Second Quarter Estimated Payments Delay

June 15 deadline moved to July 15

The IRS recently announced a delay in the deadline to file 2nd quarter estimated tax payments.

Background

The IRS issued a tax filing and tax payment delay due to the coronavirus pandemic, from April 15, 2020 to July 15, 2020. Many payments are included in this delay for both individuals and small businesses. It includes filing of all tax returns, the related payments and all estimated payments typically due on April 15.

The problem

By moving the 1st quarter estimated tax payments from April 15 to July 15, the 1st quarter estimated payments were then actually due one month later than the 2nd quarter estimated payment deadline!

Current situation

With IRS notice 2020-23, the 2nd quarter estimated payment due date is now moved July 15, 2020. So you will need to plan accordingly. This includes both individual and corporate payments.

Reminder, just because the IRS grants a payment delay, does not ensure your state will follow suit. So pay attention to the state's filing situation as well.

Should you have any questions, please call.

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Must Read for Small Business Coronavirus Loans

The PPP loan launches April 3, 2020

Beginning April 3, 2020, your small business can apply for a PPP loan funded as part of the coronavirus CARES Act. The great thing about these loans, is that they are low cost and some or all of it can be forgiven.

The problem

The rush to get this program up is understandably confusing and chaotic. If you wish to get your small business application into the program here are some suggestions.

Small Business Administration (SBA) is administering. Not the Treasury Department or other government agency. So the SBA and your bank are the best places to get first hand information on the program. While banks have information, they are swamped... so check with SBA first! Here is a link: PPP loan information

Example: For a number of days there were two versions of an application form; one from Treasury and one from the SBA. Though similar, banks will need to follow SBA guidelines!

SBA banks are on the front line. This is where YOU go to get an application filed for loan approval into the program. So work with a bank that is good at this process. Start with your business banker and go from there.

The risk to your bank could be high! The SBA loan guarantee is critical for your bank. If they mess up, the guarantee goes away, and they are on the line for the loss. So the risk is high for your bank and the reward is low. Do not forget this. Give them exactly what they need!

High demand, means low availability. The SBA loan processing system is not developed to handle the volume they are receiving. This includes banks handling SBA transactions. So be patient and for goodness sake DO NOT become the bottleneck. Turn their requests around as quickly and as accurately as possible.

And remember to ask for help. You want to do this right the first time, even with change rules and constantly evolving requirements.

COVID-19 Relief articles summary

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Questions about your financial situation?

Contact Executive Tax Solution

Executive Tax Solution

5250 TX-78 Suite 750 • Sachse, TX 75048

Phone: 469-262-6525

allen@executivetaxsolution.comwww.executivetaxsolution.com


COVID-19 Relief

COVID-19 Relief articles summary

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A Lifeline for Small Businesses - The PPP Loan

URGENT information for all small businesses

Action items:

April 3, 2020. Beginning application date for the new coronavirus business loan program. Sole-proprietors and independent contractors can begin applying April 10.

Time is of the essence. If used properly, some or all of these loans can be forgiven (free money?), but demand will be high.

Contact your bank or lending institution ASAP. This loan process is being handled by banks set up to handle SBA loans.

Go to www.sba.org to get details and application information.

Starting Friday, April 3, small businesses in the U.S. can apply for loans through the Small Business Administration (SBA) to help stay afloat during the COVID-19 pandemic.

The Paycheck Protection Program (PPP) provides loans of up to $10 million to qualified small businesses. Better still, some or all of the PPP loans will be forgiven if a business meets certain criteria.

Who Qualifies

If your business was open on or before February 15, 2020 and has 500 or fewer employees or independent contractors for whom the business paid salaries, compensation and payroll taxes, you qualify. Businesses with more than 500 employees are eligible in certain industries. One such example is the hospitality and food sectors that have multiple locations. These companies can have up to 500 employees per physical location.

Good faith certification required

In addition to the aforementioned qualification criteria, in order to participate in the PPP program a business is required to certify the following:

  • That the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient;
  • Acknowledging that funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments;
  • That the business does not have an SBA 7(a) loan pending for the same purpose and duplicative of amounts applied for or received under a covered loan;
  • During the period beginning on February 15, 2020 and ending on December 31, 2020, the business has not received amounts under the Paycheck Protection Program for the same purpose or duplicative amounts applied for or received under a covered loan.

Attractive loan provisions

This loan has very few strings attached compared to other SBA loans.

  • No collateral is required.
  • No personal guarantees are required.
  • No up-front or back-end loan fees are applied.
  • If you keep your employees on payroll, some or all of the loan is forgiven.
  • The forgiven portion of the loan is NOT considered taxable.
  • For the portion of the loan that is not forgiven, repayment terms are up to 10 years at not more than 4% interest.
  • Initial loan payments are deferred for a period of six months to one year.
  • There is no prepayment penalty.
  • You can borrow up to 2.5 times your average payroll costs, excluding pay over $100,000 to any one person.

How funds are used is important

These loans are meant to help your business stay afloat during the pandemic. In addition to using the funds for payroll you can use them for:

  • Health care benefits; paid sick, medical or family leave; and insurance premiums;
  • payments of interest on any mortgage obligation;
  • rent;
  • utilities and
  • interest on any other debt obligations that were incurred before the covered period.

Loan forgiveness is the key

What makes this loan unique is that if you keep your employees hired, some or all of the loan will be forgiven. There are many parts to the calculation of the forgiveness, but the primary two are employee retention and at least 75% of the forgiven loan amount must be used for payroll.

But even if you lay off employees, there are clauses that allow you to rehire those employees.

Check with the source!

The rules and application of the rules is rapidly changing. So check with your bank and visit Small Business Administration paycheck program for more up-to-date information.

Questions about your financial situation?

Contact Executive Tax Solution

Executive Tax Solution

5250 TX-78 Suite 750 • Sachse, TX 75048

Phone: 469-262-6525

allen@executivetaxsolution.comwww.executivetaxsolution.com

December 6, 2019 What is a Statutory Installment Agreement and Can I Get One When I Owe Money to the IRS?

There’s a lot of confusion out there about what an installment agreement really is and how does a tax payer get one. Let’s start with the types, first. There are three types of installment agreements: Statutory, Streamlined and Partial Payment Installment Agreements. This blog will only cover the Statutory.

The Statutory Installment Agreement is the least used because this is where the tax payer’s representative proves that the IRS did something wrong while assessing the fines for the taxpayer. Something went amiss and the taxpayer’s rights have been violated. This could be anything from mis-identity to statute of limitations running out.

According the Internal Revenue Code (IRC Sec. 6159(c)) the IRS is required to enter into an installment agreement with the taxpayer if –

a) the tax liability is $10,000 or less. minus penalties and interest;

b) the taxpayer has not failed to file or pay nor entered into another installment agreement under this provision ;

c) the installment agreement provides for full payment of the liability within three years;

d) the taxpayer agrees to comply with the tax laws and the terms of the agreement for the period that the agreement is in place;

e) if requested by the IRS, the taxpayer submits financial statements, and the IRS determines that the taxpayer is unable to pay the tax due in full.

The last point is pretty much mute, however. As a matter of policy, the Service grants guaranteed agreements even if the taxpayer is able to pay it all at once.

There are a couple of things to keep in mind for those taxpayers considering bankruptcy or for those who already in bankruptcy. If you already have a standing installment agreement, a bankruptcy will not make that agreement go away. This is a contract with the government – much like a promissory note, that you are expected to fulfill. Any agreement you make the IRS whether an installment agreement, an offer in compromise or any of the rest, is considered a sworn statement and violation will be punishable to the full extent of the law. Does that mean you could end up in jail, I guess it could, but more than likely it will mean the IRS would start reinforcing liens and levies of your bank accounts, accounts receivables and properties.

If you have any questions about or would like to get more information about a statutory installment agreement please schedule a 15-minute call with us by clicking HERE, or write us a brief note @ services@executivetaxsolution.com. Tell your friends about us and watch out for the video on this lesson, coming soon.

December 6, 2019 How to Protect Your Social Security Number from Theft

With the dramatic increase in identity theft, what can be done to protect your Social Security Number (SSN) from these would-be thieves? Here are some ideas.

Do not carry your Social Security Card with you. Your parents were encouraged to do this, but times have changed. You will need to provide it to a new employer, but that is about it.

Know who NEEDS your Social Security Number. The list of those who need to have your number is limited. It includes:

· Your employer. To issue wages and pay your taxes.

· The IRS. To process your taxes.

· The State Revenue department. To process your state taxes.

· The Social Security Administration. To note your work history and record your benefits.

· Your retirement account provider. To enable annual reporting to the IRS.

· Banks. To enable reporting to the IRS.

· A few others. Those who need to report your activity to the government (example: investment companies.)

Do not use any part of your Social Security number for passwords or account access. Many retirement plans use your Social Security Number to enable you to access their on-line tool. When this happens, reset the login and password as soon as possible.

Do not put your Social Security Number on any form. Unless a business has a legal need for your number, do not provide it. Common requestors of this number are insurance companies and health care providers. Simply write, “not available due to theft risk” in the field that requests your number. If the supplier says they need it, ask them why.

Do not note your full Social Security number on any form. If you are required to give out your number, try marking out the first five numbers. (xxx-xx-1234)

Do not put your Social Security Number on your checks. Certainly not on your pre-printed checks. If requested by the government to place your number on your check to apply your payments, simply put the last four digits on the check.

Never give your number out over the phone or in an email. The only exception is when you make the phone call to a valid source that will need the number to access your account.This list is very limited. It includes calls you make to the IRS, Social Security, your state government, and limited partial numbers to your bank and health care insurance company.

Remember to periodically check your credit with the major agencies to ensure your data has not been stolen. Once stolen, it is often difficult to get a new SSN issued.

May 2, 2019 Baby Boomers Become the Sandwich Generation

Sandwich Generation - Financial Tips

The "baby boomers," Americans born between 1946 and 1966, are moving like a wave into their fifties and sixties. Unfortunately, many of them are facing new financial pressures. Their kids are likely to need help paying for increasingly expensive colleges. Their folks are getting older and living longer. Boomers are digging into their wallets to make up the shortfall in their parents' retirement income, and many are trying to help cover the costs of long-term care. On top of that, they're struggling to save for retirement and pay for the groceries. No wonder they feel squeezed.

If you're part of the "sandwich generation," take heart. Careful planning and a little diligence can help to alleviate some of this pressure.

First, you need to identify your priorities. How important to you are such things as setting aside funds for retirement, paying for your kids' schooling, and helping your parents with the cost of long-term care? Once you've identified your priorities, you can set realistic goals to address them, putting the bulk of your financial resources and energy toward meeting the most important goals first.

Retirement. Many people would like to retire at a relatively young age. But some may have to rethink that goal in light of other financial demands like college tuition and care for elderly parents. Working longer can have distinct benefits. Besides funding an accustomed lifestyle for a few more years, working longer and leaving your retirement accounts intact will give the funds more time to grow.

Education. Many families want to help finance the education of their children. Tuition, books, and other college costs can eat up tens of thousands of dollars. If your child is still young, it's a good idea to start saving early and invest for growth. If your child is ready to start college but isn't financially prepared, you might consider letting him or her finance a portion of the cost by working or obtaining loans. College-age kids have their working lives ahead of them. Their income, including their ability to repay loans, should increase.

Parents. For many in the sandwich generation, helping to pay for the high cost of a parent's long-term care is a priority. For example, a year in a nursing home can cost $30,000 to $50,000. At some point, your parents may need financial help to cope with such high expenses. In the meantime, you may be able to help them manage their finances and consider options such as long-term care insurance. You might want to meet with their banker, lawyer, and accountant to look over your parents' financial status and review legal papers, including such documents as power of attorney, wills, and trusts.

Feeling squeezed? Call if you wish a review of your situation.

If you have more questions about your taxes or tax-related payroll or bookkeeping issues give us a call @ (469) 262-6525

April 25, 2019 Debt reduction may be your best investment

Debt Reduction - Tax accounting services specializing in small business.

Investors are increasingly uneasy about the ups and downs of the stock market. If you're worried about your investments and want to reduce your debts, you're in luck. Debt reduction gives you a guaranteed rate of return. By paying off a typical credit card, you'll save about 18 percent interest on the amount you retire. Where else can you earn a guaranteed return of 18%?

Debt reduction also buys security. A low-debt family earning $80,000 a year can be financially stronger than many high-debt families earning twice as much. If you lose your job, your level of debt can make the difference between temporary discomfort and financial ruin.

To reduce debt, you should first avoid buying anything you can't pay for in 30 days. Then start working on your existing debts. Each month, pay as much as you can on the debt with the highest nondeductible interest rate, covering only minimum payments on the others. When you've retired the first debt, start on the one with the next highest rate. Continue the process until you've paid off everything but your home mortgage.

Naturally, this is a simplified approach, and individual circumstances vary. A professional can help you set realistic goals and work with you at achieving them.

If you have more questions about how to chip away at your debts or for any help with your taxes or tax-related payroll or bookkeeping issues give us a call @ (469) 262-6525

April 18, 2019 Don't Be a Victim of "Ghost"​ Tax Return Preparers

WASHINGTON – Today, towards the end of the second full week of the 2019 tax filing season, the Internal Revenue Service warned taxpayers to avoid unethical tax return preparers, known as ghost preparers.

By law, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid 2019 Preparer Tax Identification Number, or PTIN. Paid preparers must sign the return and include their PTIN.

But ‘ghost’ preparers do not sign the return. Instead, they print the return and tell the taxpayer to sign and mail it to the IRS. Or, for e-filed returns, they prepare but refuse to digitally sign it as the paid preparer.

According to the IRS, similar to other tax preparation schemes, dishonest and unscrupulous ghost tax return preparers look to make a fast buck by promising a big refund or charging fees based on a percentage of the refund. These scammers hurt honest taxpayers who are simply trying to do the right thing and file a legitimate tax return.

Ghost tax return preparers may also:

Require payment in cash only and not provide a receipt.

Invent income to erroneously qualify their clients for tax credits or claim fake deductions to boost their refunds.

Direct refunds into their own bank account rather than the taxpayer’s account.

The IRS urges taxpayers to review their tax return carefully before signing and ask questions if something is not clear. And for any direct deposit refund, taxpayers should make sure both the routing and bank account number on the completed tax return are correct.

The IRS offers tips to help taxpayers choose a tax return preparer wisely. The Choosing a Tax Professional page has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification.

Taxpayers can report abusive tax preparers to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.

If you have more questions about how to avoid tax fraud tricksters or for any help with your taxes or tax-related payroll or bookkeeping issues give us a call @ (469) 262-6525

April 11, 2019 Satisfied customers create higher profits

Customer service

In some industries, service has become a quaint memory, and customers are reduced to selecting the provider that costs or annoys them the least. But the golden rule has not been repealed, and pleasing your customers can create a powerful competitive advantage. A few simple changes may well increase your bottom line.

We all hate having our time wasted, and businesses are among the worst offenders. To distinguish your firm from the rest, establish the following customer service policies and procedures.

  • Communicate with your customers. Return calls promptly, update customers about matters in progress, and explain delays as soon as you can.
  • Don't make your customers jump through hoops. Offer discounts at the point of sale, rather than giving out coupons or making buyers apply for mail-in rebates. If you employ an automated phone system, provide a simple method for reaching a live person.
  • Don't worry about trying to save face. If you're even partly wrong, apologize and proceed to a resolution. Train your employees to do the same, and reward them for positive outcomes.

Let customers know you're there for them and that you regard them as more than mere cash cows. Listen to their concerns, and address them promptly. If someone is unhappy with a purchase (whether product or service), fix it, replace it, or refund the payment in full. At worst, the loss won't be compounded by damage to your reputation. At best, the money will come back multiplied by repeat business and referrals.

Quality service is a powerful marketing tool that's surprisingly easy to deploy. Simply imagine how you would want to be treated, and provide that treatment to your customers. As their satisfaction increases, your profits will follow.

Pay attention to your customers' needs. You'll enjoy higher profits as a result.

If you have more questions about how to improve your customer service or for any help with your taxes or tax-related payroll or bookkeeping issues give us a call @ (469) 262-6525

April 4, 2019 Where to get money for a growing business

Financing Growth

The following sequence of events is common to many new and expanding businesses.

The Short-Term Squeeze

You start your business with a limited amount of capital and an abundance of good ideas and ambition. The sales activity has been adequate to produce a net profit. Your inventory is about twice as large as you intended. Your accounts payable are past due to the point where some creditors want to ship C.O.D. only. To keep your creditors happy, you have been overdrawing your checking account to the dissatisfaction of your banker. You have a short-term note past due at the bank.

These are all symptoms of a very common business ailment - too much short-term debt.

This type of cash squeeze can be avoided if you confine your company's growth to that which can be handled from retained earnings. If the cash retained in the business from last year's profits is $25,000 and inventory grows by twice that amount, somebody (you, your banker, or a new partner) has to fund the expansion that cannot be funded by the retained earnings.

Long-Term Funding

If you can't provide additional capital and you don't want a partner, you need to look for long-term funding from one of the following sources:

  • Funds from Owner - Studies indicate that as much as 60% of all small business funding comes directly from the owner or his/her immediate family. Outside of your immediate family or friends, you may find funding from other private parties or from financial institutions.
  • Private Lenders - There are some problems with outside private lenders. First, they are few and far between. Second, they generally demand a higher rate of interest and/or want to own a percentage of the business.
  • Financial Institutions - The main problem in using financial institutions for small businesses is that banks are not in the "risk" business. Although you may be very optimistic about your company's future and have a glowing cash flow projection, the banker is not likely to rely on it for loan purposes. You may have adequate collateral in terms of inventory, real estate, etc., but if the banker feels that you will not have adequate after-tax net profits to service a loan, he/she is not likely to lend you money. Bankers do not want to liquidate your assets in satisfaction of their loan.
  • Small Business Administration - If financing is not otherwise available on reasonable terms, the Small Business Administration may be available to assist with its various loan programs.
  • Money Brokers - There are "money brokers" who advertise in various newspapers and business publications. Many of these brokers want to be paid in advance to locate possible lenders for you. Be very cautious of any broker and ask for references and credentials. Any proposal by such brokers should be reviewed by both your attorney and your accountant before you sign anything.

If you would like more information on the business funding options available in your situation, please feel free to call.

If you have more questions about how to raise more capital or for any help with your taxes or tax-related payroll or bookkeeping issues give us a call @ (469) 262-6525

March 28, 2019 Alert! Beware the Telephone Scam

Top IRS dirty dozen tax scam

Each year the IRS announces a dozen tax scams they call the “dirty dozen”. One of them - telephone scams - is on a huge upswing RIGHT NOW. Here is what you need to know.

“The aggressive, threatening phone calls from scam artists continue to be seen on a daily basis in states across the nation. The IRS urged taxpayers not give out money or personal financial information as a result of these phone calls or from emails claiming to be from the IRS.”

Source: IRS.gov

What to do

  • No information. Do not provide information to someone who calls you by phone. This includes your name, social security number, address, or any financial information.
  • No confirmation. These thieves often have stolen information of yours. It might include your name, address and social security number. By providing this information to you, they hope you will think they are legitimate. Do not fall for this trap.
  • Get information. So are they the real deal? Get the name of the person, their id number, and your case number. Have them provide you with a phone number to call them back. Then hang up. Do not call them, but contact the authorities.
  • Do not get bullied. These thieves are aggressive, may have fake caller id’s and may threaten you with asset seizure or jail time. Do not be harassed. Hang up.
  • Report the incident. Contact the IRS via their direct phone number found on irs.gov and tell the representative what happened.

For more information on this scam and on what to do if this happens to you, please read this IRS announcement: IRS sees phone scams as a serious threat.

If you have more questions about how to avoid telephone scams or for any help with your taxes or tax-related payroll or bookkeeping issues give us a call @ (469) 262-6525