First, prayers continue for all impacted by the Coronavirus and any other severe trial. The stories of people helping each other are amazing!
Here is a quick hit of our suggested strategy for small businesses and self-employed individuals we covered in the webinar Friday.
- Survive until relief is available
- Contact vendors and your banker immediately to see if payment terms can be extended.
- Use existing lines of credit if you have to.
- Apply for an Express Bridge Loan (up to $25,000) with your existing bank.
- The bankers we have been in touch with are still working through the details. When you get information from your bank, please send it so us so we can share the information.
- Apply now for an SBA Disaster loan to cover NON-PAYROLL costs and for the up to $10,000 advance. https://www.sba.gov/page/disaster-loan-applications#section-header-0
- Apply for an advance on required sick and family leave costs (when available). Remember this goes into effect April 2 – see the information on our website.
- Apply for a CARE Act Paycheck protection loan (when available).
- Roll the disaster loan into the Paycheck loan.
- Here is the best explanation I have found from the U.S. Chamber of Commerce: https://www.uschamber.com/sites/default/files/023595_comm_corona_virus_smallbiz_loan_final_revised.pdf
- I have prepared an Excel spreadsheet you can use to calculate an estimate of your maximum loan amount. It is attached, but we are happy to help so contact us.
- Make tax free reimbursements to employees for telecommuting and child care costs. Here is an excellent article about that from Forbes. https://www.forbes.com/sites/anthonynitti/2020/03/23/little-known-tax-law-allows-employers-to-make-tax-free-payments-to-employees-to-cover-covid-19-expenses/?mkt_tok=eyJpIjoiT0RZNE9XUmtZbVl6WVRjMCIsInQiOiJHYmNiUEIyUjdNNTdDXC83NW5SXC9tXC9pajVxQW01Q0MyTktZUXNKaVplTGZ2Ujllbk4rTEZ4ZjNhMzVvVVBoVElod1wvQkIrS2p4T0VTaWQrcWZrTG9JdjZ0TE1TKzUyd1RRNFJvYzFuaXBTaXZoTnRcL2ZOcDN2QVhlUm9JNzFWWkNqIn0%3D#2ebc459c4cfc
- Starting with the pay period beginning today, March 30, do not include the 6.2% matching Social Security amount in your payroll tax deposits. Pay taxes due on prior payrolls as usual.
- Keep up with the rules about CARE loan forgiveness and try to re-hire laid off workers before June 30. More info to come about that.
Regarding the individual stimulus payments:
- Make sure your 2018 is filed. You do not have to file your 2019 return. The actual stimulus you qualify for will be calculated based on your 2020 tax return. Will you get more or have to pay some back? Don’t know yet.
- If you did not file a return because you don’t have to and you are receiving Social Security benefits (retirement or disability), don’t worry – you don’t need to file to receive a payment.
- If, on the other hand, you did not file a 2018 or 2019 return because you are under the income limits, you should file anyway to get in line. We will file these type of returns at our absolute minimum fee of $50 to cover our costs.
- Treasury Secretary Mnuchin said there will be a way to sign up online for direct deposits to expedite payment. Stay tuned for more info.
Finally, please keep sharing new information as you get it. Again, this is a fluid situation regarding details and we are trying to let you know as soon as possible.
Stay safe. Stay healthy. Hang in there. We can do this together.