NEW SCAMS TARGETING COVID-19 ASSISTANCE PROGRAMS
SBA Economic Injury Disaster Loans and Loan Advance
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides for an emergency advance of $10,000 to small businesses and private non-profit organizations affected by COVID-
19. In order to receive the advance, you must apply for the Economic Injury Disaster Loan (EIDL) and request the advance at the end of the application process. The loan advance funds will not have to be repaid even if the EIDL application is denied. The EIDLs are up to $2 Million with terms up to 30 years and interest rates of 3.75% for small businesses and 2.75% for non-profits. EIDLs requesting funds up to $200,000 can be approved without a personal guarantee and do not require real estate as collateral.
The following are eligible for SBA disaster loans:
- Business entities with 500 or fewer employees.
- Sole proprietorships, with or without employees.
- Independent contractors.
- Cooperatives and employee owned businesses.
- Tribal small businesses.
- Private non-profits of any size.
In addition, you must have been in business as of January 31, 2020 to be eligible for the loan. You are not eligible for SBA disaster loans if:
March 28, 2020
As mentioned in our previous email and blog post, on Friday President Trump signed a $2 trillion stimulus package. In a move designed to keep small businesses afloat, the CARES Act allocates $349 billion to loans the Paycheck Protection Program loans under the Small Business Administration. We provided details on the Program in a previous post.
Lenders are working out the final details with the Small Business Administration (SBA), but you can take steps now to prepare for the application process to avoid delays. Applications may be ready to be processed as early as next week. We suggest that you contact your bank and ask if they are qualified SBA 7(a) lenders and participating in the Payback Protection Program. Inform them of your interest in applying and ask how you can prepare. Please feel free to reach out to our team with questions.
March 27, 2020
March 26, 2020
Federal Coronavirus Aid, Relief and Economic Security (CARES) Act
As of today, the Coronavirus Aid, Relief and Economic Security (CARES) Act has been passed by the Senate. As of this writing, the CARES Act still requires approval from the House and the President’s signature before becoming law. Included in this Act is the authorization of $349 billion of federally guaranteed loans to qualifying small and medium sized businesses through the expansion of the SBA 7(a) with the “Paycheck Protection Program.” The Senate debated the legislation before it was approved late last night and the House is expected to vote on it tomorrow.
The CARES Act provides more significantly expanded options for relief to both individuals and businesses, including changes to tax policy.
Some key provisions include:
Paycheck Protection Program
Under the current draft of the Cares Act is a potential for major economic relief for impacted businesses. The SBA is authorized to guarantee up to $349 billion in 7(a) loans to businesses with not more than 500 employees or the applicable size standard established by the SBA for the industry in which the business operates, if greater. The loan period for this program would begin on February 15, 2020, and end on December 31, 2020.
Operational on February 15, 2020, and had employees for whom the borrower paid salaries and payroll taxes, or paid independent contractors, and is substantially impacted by public health restrictions related to COVID-19. (Eligible borrowers would be required to make good faith certification that they have been affected by COVID-19 and will use funds to retain workers and maintain payroll and other debt obligations.) There is no requirement to evaluate the borrowers’ ability to repay the covered loan or that the borrower not be able to find credit elsewhere, unlike the normal 7(a) requirements.
Pennsylvania COVID-19 Working Capital Access Loan Information
- SBA Economic Relief for Businesses Impacted by Coronavirus (COVID-19)
In response to the Coronavirus (COVID-19) outbreak, city, state and national governments are offering various types of relief for small businesses. Below is a summary related to relief offered by the Small Business Administration (SBA) related to the epidemic, we suggest you apply as soon as possible as processing delays are expected. The SBA has indicated that online application will result in the fastest method to receive a decision.
The SBA has made Economic Injury Disaster Loans (“EID Loans”) available for qualifying small businesses and non-profit organizations that have suffered economic injury as a result of the Coronavirus epidemic. The loans may be used to pay fixed debts, payroll, accounts payable and other ordinary expenses that are not able to be paid as a result of the epidemic.
The interest rate is 3.75% for small businesses and 2.75% for non-profits. Terms are decided on a case by case basis and long term payments (up to 30 years) are available.
• Must be located in a declared disaster area recognized by the SBA. Current qualifying geographic areas can be found here: https://disasterloan.sba.gov/ela/Declarations
The state of Pennsylvania and areas of Delaware, Maryland and New Jersey were approved this week.
• Must qualify as a small business. The SBA definition of a small business varies by industry but can generally be defined as less than eight million dollars in gross revenue. Please see the SBA interactive website at the below link to determine if your business qualifies (or contact us for help) https://www.sba.gov/size-standards/
• Must demonstrate that it has suffered “substantial economic injury” as a direct result of the disaster. Substantial economic injury can generally be defined as an inability to meet its obligations or pay ordinary and reasonable expenses incurred in the normal course of business.
Application Process (recommended browser is Internet Explorer; Chrome users reporting issues)
• Complete application online http://disasterloan.sba.gov/ela/ or by paper using SBA Form 5
We suggest you answer every question; there is a narrative section to document specific issues related to the epidemic
• Required documents include the following:
1) Tax Information Authorizations or 4506-T’s to authorize the SBA to request for tax return transcripts for the applicant, majority owners, and affiliate businesses
2) If applying online, option to sign electronically / or upload as an attachment
3) Asset and liability information for completing the Personal Financial Statement within the application
Following the application submission, the SBA will conduct a credit check and verify the submitted information.
The SBA may reach out for additional information or with questions.
The SBA stated goal for application review and decision is 2-3 weeks. We expect delays as a result of anticipated volume.
Additional information on the Three step Process for Disaster Loans can be found here: https://www.sba.gov/sites/default/files/files/Three_Step_Process_SBA_Disaster_Loans.pdf
We are monitoring updates and changes and will continue to provide information as it becomes available.
The SBA disaster assistance customer service center can be reached at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail email@example.com.
For questions or assistance with the application, contact Kristen McCabe at firstname.lastname@example.org or 610-885-0971.
Yesterday, Treasury Secretary Mnuchin announced plans for the federal government to allow a deferral of tax payments for individuals up to $1 million and Corporations up to $10 million originally due April 15th to be paid by July 15, 2020 without incurring penalty and interest charges. The filing deadlines of those returns have not been automatically extended, so individual and C Corporation returns without a filing extension, are still due on April 15th .
Business clients often ask us: Should we outsource our accounting needs? What exactly are the benefits we can expect?
As we near the end of 2019, we are sharing an overview of the most significant changes under the Tax Cuts and Jobs Act (TCJA) and other key tax provisions you need to be aware of moving into 2020 with strategies for your individual and business situation. For a copy of our planning guide, contact us at email@example.com.
As we near the beginning of the end (of 2019), it is crucial that employers account (literally and figuratively) for changes in the law.
These summer activities can affect next year’s tax returns. Here are some things taxpayers do during the summer along with tips they should consider now:
Scam artists don't take summer vacations! With scam artists hard at work all year, taxpayers should be on the lookout for a surge of evolving phishing emails and telephone scams.
Here’s what taxpayers should know if they get a notice from the IRS
Love is in the air and the wedding bells are ready to ring! The big day is right around the corner. All of the details are in place... or are they?
Have you found that collecting on your accounts receivables has become more challenging? If so, strengthening your collection procedures may allow you to improve collection rates and shorten the aging days of your accounts receivables.
Monday, April 15, 2019, was the tax deadline for most taxpayers to file their tax returns. If you haven't filed a 2018 tax return yet, it's not too late.
Starting May 13, 2019 only individuals with tax identification numbers may request an Employer Identification Number (EIN) as the "responsible party" on the application. An EIN is a nine-digit tax identification number assigned to sole proprietors, corporations, partnerships, estates, trusts, employee retirement plans and other entities for tax filing and reporting purposes.
As a reminder, individuals with "seriously delinquent tax debts" are subject to a new set of provisions courtesy of the Fixing America's Surface Transportation (FAST) Act, signed into law in December 2015. These provisions went into effect in February 2018.
In 2017, there were 16.7 million victims of identity fraud. A terrifying number, but there are steps you can take to prevent and report this criminal act.
The Tax Cuts and Jobs Act has resulted in questions from taxpayers about many tax provisions including whether interest paid on home equity loans is still deductible.
Tax credits can reduce your tax bill or give you a bigger refund, but not all tax credits are created equal. While most tax credits are refundable, some credits are nonrefundable, but before we take a look at the difference between refundable and nonrefundable tax credits, it's important to understand the difference between a tax credit and a tax deduction.
If you are living or working outside the United States, you generally must file and pay your tax in the same way as people living in the U.S. This includes people with dual citizenship.
In addition, U.S. taxpayers with foreign accounts exceeding certain thresholds may be required to file Form FinCen114, known as the "FBAR" as well as Form 8938, also referred to as "FATCA."
Like clockwork, every year, there's a new twist on old scams. This year, it is the IRS phone scam whereby criminals impersonate IRS agents and make fake calls from the Taxpayer Advocate Service.
As the driving force in today's economy, small businesses benefit from numerous tax breaks in the tax code. One of these, the Qualified Small Business Stock (QSBS), was made permanent by the PATH Act (Protecting Americans from Tax Hikes Act of 2015). If you're a small business investor, here's what you need to know about this often-overlooked tax break.
Social Security benefits include monthly retirement, survivor, and disability benefits; they do not include Supplemental Security Income (SSI) payments, which are not taxable.
Tax reform eliminated a number of deductions that many taxpayers counted on to reduce their taxable income. Here are four that could affect you.
In most cases, taxpayers who turned 70 1/2 during 2018 must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Monday, April 1, 2019.
In 2019, Americans around the world began filing their taxes under the new Tax Cuts and Jobs Act. Some tax breaks have been eliminated or capped, while others have been expanded or introduced.
The complexity of the tax code generates a lot of folklore and misinformation that could lead to costly mistakes such as penalties for failing to file on time or, on the flip side, not taking advantage of deductions you are legally entitled to take and giving the IRS more money than you need to. With this in mind, let's take a look at seven common small business tax myths.
Providing tax benefits to investors who invest eligible capital into distressed communities throughout the U.S. and its possessions, Qualified Opportunity Zones (QOZs) were created under the Tax Cuts and Jobs Act of 2017 to spur economic development and job creation. If you're considering investing in a QOZ, here are five facts you should know:
January 28, 2019, marked the start of this year's tax filing season, and it's the first time taxpayers will be filing under the new tax reform laws, most of which became effective in 2018. Complicating matters is a newly revised Form 1040, U.S. Individual Income Tax Return, as well as the partial shutdown of the federal government. With more than 150 million individual tax returns expected to be filed for the 2018 tax year, here's what individual taxpayers can expect:
Many people use IRAs, SEP Plans, SIMPLE IRA plans, and employer-sponsored retirement savings plans such as the 401(k) to save money for their retirement years, but what if you need to tap that money before age 59 1/2?
The estimated tax penalty has been waived for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year; however, there is a catch:
Most people file a tax return because they have to, but even if you don't, there are times when you should--because you might be eligible for a tax refund and not know it. The six tax tips below should help you determine whether you're one of them.
Starting January 1, 2019, the standard mileage rates for the use of a car, van, pickup or panel truck are as follows:
The Tax Cuts and Jobs Act, passed in December 2017, made tax law changes that will affect virtually every business and individual in 2018 and the years ahead. One tax provision that taxpayers should be aware of is that like-kind exchanges are now generally limited to exchanges of real property. Here's what you need to know:
The 2019 tax season is quickly approaching and with it an increase in identity theft and W-2 scams. Small business identity theft is big business for identity thieves. Just like individuals, businesses may have their identities stolen, and their sensitive information used to open credit card accounts or used to file fraudulent tax returns for bogus tax refunds.
Every year, it's a sure bet that there will be changes to current tax law and this year is no different, now that the tax provisions under the Tax Cuts and Jobs Act of 2017 (TCJA) are in full effect. From standard deductions to health savings accounts and tax rate schedules, here's a checklist of tax changes to help you plan the year ahead.
If you've lost your job you may have questions surrounding unemployment compensation, severance, and other issues that could affect your tax situation. Here are some answers:
Everyone wants to save money on their taxes, and older Americans are no exception. If you're age 50 or older, here are six tax tips that could help you do just that.
Dollar limitations for pension plans and other retirement-related items for 2019 are as follows:
Taxpayers should be aware of a new round of fraudulent emails that impersonate the IRS and use tax transcripts as bait to entice users to open documents containing malware. The scam is especially problematic for businesses whose employees might open the emails infected with malware as it can spread throughout the network and may take months to remove.
The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated or modified numerous tax provisions starting in 2018. Here's what businesses need to know as they get ready for tax season. Here's what business owners need to know about tax changes for 2018.
The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated or modified numerous tax provisions starting in 2018. Here's what individuals and families need to know as they get ready for tax season.
Taxpayers born before July 1, 1948, generally must receive payments from their individual retirement arrangements (IRAs) and workplace retirement plans by December 31.
Tax reform legislation passed in December 2017 included numerous changes that affect businesses this year. One of them allows businesses to write off most depreciable business assets in the year they place them in service. Here are five facts to help businesses better understand this deduction:
If you have children, you may be able to reduce your tax bill using these tax credits and deductions.
While similar to FSAs (Flexible Savings Plans) in that both allow pre-tax contributions, Health Savings Accounts or HSAs offer taxpayers several additional tax benefits such as contributions that roll over from year to year (i.e., no "use it or lose it"), tax-free interest on earnings, and when used for qualified medical expenses, tax-free distributions.
Thanks to tax reform legislation passed in December 2017, eligible taxpayers may now deduct up to 20 percent of certain business income from qualified domestic businesses, as well as certain dividends. Eligible taxpayers can claim the deduction for the first time on the 2018 federal income tax return they file in 2019.
There are a number of end of year tax planning strategies that businesses can use to reduce their tax burden for 2018. Here are a few of them:
Once again, tax planning for the year ahead presents a number of challenges, this year, primarily due to tax laws changes brought about the passage of the Tax Cuts and Jobs Act of 2018. These changes include the nearly doubling of the standard deduction, elimination of personal exemptions, and numerous itemized deductions reduced or eliminated. Let's take a closer look.
Lending money to a cash-strapped friend or family member is a noble and generous offer that just might make a difference. But before you hand over the cash, you need to plan ahead to avoid tax complications for yourself down the road.
Social Security Administration recently announced a 2.8 percent increase in benefits in 2019. This increase in benefits will impact 63 million beneficiaries and is the largest annual cost-of-living adjustment since 2012. Impacted by this change are retirees, disabled workers, their eligible dependents and surviving family members.
Tax withholding can be complicated, and with the passage of the Tax Cuts and Jobs Act (TCJA) legislation, it's even more so since a number of tax provisions have changed. As such, it's important to make sure the right amount of tax is withheld for your particular tax situation.
With health care, housing, food, and transportation costs increasing every year, many retirees on fixed incomes wonder how they can stretch their dollars even further. One solution is to move to another state where income taxes are lower than the one in which they currently reside.
If you employ someone to work for you around your house, it is important to consider the tax implications of this type of arrangement. While many people disregard the need to pay taxes on household employees, they do so at the risk of paying stiff tax penalties down the road.
Starting a new business is an exciting, but busy time with so much to be done and so little time to do it. Also, if you expect to have employees, there are a variety of federal and state forms and applications that will need to be completed to get your business up and running. That's where a tax professional can help.
Selecting your business successor is a fundamental objective of planning an exit strategy, but it requires a careful assessment of what you want from the sale of your business and who can best give it to you.
Taxpayers with school-age children should be aware of three recent tax law changes affecting 529 education savings plans.
If you want to save money on your tax bill next year, consider using one or more of these tax-saving strategies that reduce your income, lower your tax bracket, and minimize your tax bill.
Of all the retirement plans available to small business owners, the SIMPLE IRA plan (Savings Incentive Match Plan for Employees) is the easiest to set up and the least expensive to manage. The catch is that you'll need to set it up by October 1st. Here's what you need to know.
Though it's never too late to start, the sooner you begin saving, the more time your money has to grow. Gains each year build on the prior year's gains--that's the power of compounding--and the best way to accumulate wealth.
At some point, most small businesses owners will visit a bank or other lending institution to borrow money. Cash flow is the key to business success. Understanding what your bank wants, and how to properly approach them, can mean the difference between getting your money for expansion and having to scrape through finding cash from other sources.
Cash flow is the lifeblood of every small business but many business owners underestimate just how vital managing cash flow is to their business's success. In fact, a healthy cash flow is more important than your business's ability to deliver its goods and services.
Natural disasters such as hurricanes are more common in summer, but tornadoes, floods, and fires can strike at any time. As such, it's always a good idea to plan for what to do in case of a disaster. Here are some necessary steps you can take right now to prepare:
Tax rules on rental income from second homes can be complicated, particularly if you rent the home out for several months of the year and also use the home yourself.
As a small business owner, figuring out which form of business structure to use when you started was one of the most important decisions you had to make; however, it's always a good idea to periodically revisit that decision as your business grows.
Under tax reform, taxpayers who itemize should be aware that deductions they may have previously counted on to reduce their taxable income have disappeared in 2018.
The new tax act established new limitations on the deductibility of certain business meals and entertainment expenses. Beginning January 1, 2018, entertainment expenses are nondeductible unless they fall under the specific exceptions under the new tax law.
Many parents are looking for ways to save for their child's education and a 529 Plan is an excellent way to do so. Even better, is that thanks to the passage of tax reform legislation in 2017, 529 plans are now available to parents wishing to save for their child's K-12 education as well as college or vocational school.
If you're thinking about hiring new employees this year you won't want to miss out on tax breaks available to businesses with employees.
Finished filing a tax return? What should you do if you already filed your federal tax return and then discover a mistake? First of all, don't worry. In most cases, all you have to do is file an amended tax return. But before you do that, here is what you should be aware of when filing an amended tax return.
Many students will be starting summer jobs…from working at a summer camp to being an office intern. The IRS reminds students that not all the money they earn may make it to their pocket. That’s because employers must withhold taxes from the employee’s paycheck. Here are a few things these workers need to know when starting a summer job:
During the summer, taxpayers often rent out their property. They usually think about things such as cleanup and maintenance, but owners also need to be aware of the tax implications of residential and vacation home rentals.
If you're like most small business owners, you're always looking for ways to lower your taxable income. Here are five ways to do just that.
Selling a small to medium-sized business is a complex venture, and many business owners are not aware of the tax consequences.
With the price of Bitcoin hitting record highs in 2017, many Bitcoin holders cashed out not realizing the impact it could have on their tax bill.
If you donated a car to a qualified charitable organization in 2017 and intend to claim a deduction, you should be aware of the special rules that apply to vehicle donations.
The Form W-2 scam has emerged as one of the most dangerous phishing emails in the tax community. During the last two tax seasons, cybercriminals tricked payroll personnel or people with access to payroll information into disclosing sensitive information for entire workforces. Read on to learn more about this recent scam...
Recent tax reform legislation affected many provisions in the tax code. Many were modified, either permanently or temporarily, while some were repealed entirely. Here are five that survived.
Taxpayers may sometimes find themselves in situations when they need to withdraw money from their retirement plan early. What they may not realize is that taking money out early from your retirement plan may trigger an additional tax. Here are 10 things taxpayers should know about early withdrawals from retirement plans:
When you decide to start a business, one of the most important decisions you'll need to make is choosing a business entity. It's a decision that impacts many things--from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you face, and with the passage of the Tax Cuts and Jobs Act of 2017, it's more important than ever to choose the business entity that benefits your business.
As the New Year rolls around, it's always a sure bet that there will be changes to current tax law and 2018 is no different now that many of the tax provisions pursuant to the Tax Cuts and Jobs Act of 2017 (TCJA) are in full effect. From health savings accounts to tax rate schedules and standard deductions, here's a checklist of tax changes to help you plan the year ahead.
Many current deductions will save you little or no tax if paid in 2018 based on the 100% proposed increase in the standard deduction, along with repeal or restriction of many itemized deductions, made by the House and the Senate.
Tax breaks for charitable giving aren't limited to individuals, your small business can benefit as well. If you own a small to medium size business and are committed to giving back to the community through charitable giving, here's what you should know.
There are a number of end of year tax planning strategies that businesses can use to reduce their tax burden for 2017. Here are a few of them:
Once again, tax planning for the year ahead presents a number of challenges: What tax reform measures (if any) will actually become legislation--and when they take effect (e.g. retroactive to January 1, 2017, or a future date); A number of tax extenders expired at the end of 2016, which may or may not be reauthorized by Congress and made retroactive to the beginning of the year?; And there are the normal variations in individual tax circumstances such as the sale of a home that could bump up income into another tax bracket. With this in mind, let's take a look at some of the tax strategies you can use given the current uncertainties.
What is Tax Planning?
Tax planning is the process of looking at various tax options to determine when, whether, and how to conduct business transactions to reduce or eliminate tax liability.
If you're looking to save money on your taxes this year, consider using one or more of these tax-saving strategies to reduce your income, lower your tax bracket, and minimize your tax bill.
Equifax is one of three major U.S. credit reporting bureaus. The other two are TransUnion and Experian. There is also a smaller, less well-known credit-reporting agency called Innovis (aka CBCInnovis) that operates slightly different in that its main purpose is to provide mortgage credit reporting services to the financial services industry.
While The IRS, state tax agencies and numerous people in the tax and accounting industry are working together to warn tax professionals and their clients about phishing scams, they are still all too common. Here's what you need to know about the two most recent scams: fake charities that take advantage of people's generosity during times of natural disasters and IRS/FBI-themed ransomware.
Of all the retirement plans available to small business owners, the SIMPLE IRA plan (Savings Incentive Match PLan for Employees) is the easiest to set up and the least expensive to manage. The catch is that you'll need to set it up by October 1st. Here's what you need to know.
From declining sales at local retail establishments to brick and mortar store closings, almost everyone would agree that the rise of Internet sales has transformed the retail landscape. One consequence of this uptick in online sales is lost revenues in states that collect sales (or use) tax.
This Friday, September 8, 2017, 10am - 2pm, Neumann University's Center for Leadership will be hosting an open house for the public to provide support and assistance to Delaware Valley residents in need of workplace suitable clothing but who may face a variety of financial challenges. The program, Wardrobes for Work, offers a range of men's and women's business suits, dress suits, and casual workplace attire.
IRS warns people to avoid a new phishing scheme that impersonates the IRS and the FBI as part of a ransomware scam to take computer data hostage.
Tax-related identity theft typically occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Anyone can fall victim to identity theft. Here is an important reminder of how to protect yourself from identity theft, what to watch out for, and what do if your identity has been compromised: