COVID

The stimulus money is aimed at just that, stimulating the economy. Catskill needs to get that money in our hands sooner than later.

Are you a small business in Catskill that needs help? 

EMAIL: LDC@welcometocatskill.com

TEXT: 518.470.3508 or 518.291.2612

TELEPHONE: (518) 252-0324

Useful Documents

Cares - section by section 

Small Business Administration list of banks

Families First Coronavirus Response Act Poster

Content courtesy of Jeff Barrett, CPA

NEW DUE DATES

As you may be aware by now, tax filings and payments are not due April 15.  Forms 1040 and 1120 and payments due thereon normally due April 15, 2020 are now due July 15, 2020. This is not an extension; it is a one-time change in due date.

Now, July 15, 2020 is also the due date for all varieties of taxes reported on Forms 1040, 1041, 1065, 1120, 706, 709, 990-T, 990-PF, and the related estimated taxes due between April 1, 2020 and July 14, 2020. Deadlines falling between April 1, 2020 and July 14, 2020 for “1031 exchanges,” refund claims, and other time sensitive tax related actions have a new deadline of July 15, 2020. As of now, it seems Not-for-profit Returns are still due May 15, but an extension until November 15  is quick and easy. FBARs not filed by April 15, 2020 will get automatic extension until October 15, 2020.

 

ECONOMIC INJURY DISASTER LOAN $10,000 ADVANCE

It seems that the EIDL Advance is so popular they do not have enough money to fund it as originally portrayed – a $10,000 quick advance on a six month operating cost loan, which doesn’t have to be paid back..  The $10,000 for everyone in three days has turned into over two weeks, with no money for anyone, but a promise of  only $1,000 per employee. Any self-employed person who filed indicating -0- employees may need to refile with “1” employee (themself.) Partnerships should apply making sure to include active partners as additional employees. We will let you know.

 

PAYCHECK PROTECTION LOANS FOR PARTNERSHIPS AND SELF-EMPLOYED, PROPRIETORS, INDEPENDENT CONTRACTORS

PPP is 2 ½ times “monthly payroll cost” as defined by SBA rules. Is spent properly, this money does not have to be paid back. SBA has finally released PPP guidance for partners in partnerships and self-employed Schedule C filers, whether or not they have employees. With this guidance we have (nearly) the final piece of the puzzle, and are now able to begin to plan the optimal strategy to maximize the any of the eight forms of various payroll and self-employment Tax Credits, the Economic Injury Disaster Loan, the Economic Injury Disaster Loan Advance, the Paycheck Protection Program Loan, Paycheck Protection Loan Forgiveness, Unemployment, and other possible options.

 

The way your 2019 Form 1065 or Form 1040 Schedule C has been, or will be prepared can make a very large difference in the amount of money you can receive in a Payroll Protection Program Loan. PPP Loans for sole proprietors with no employees can range from zero up to $20,833.33, depending on how much money is reported on your 2019 taxes. As you know, there are various options, particularly surrounding depreciation, which can have a large impact on your business income. Whether or not you have employees, we will need to prepare your Partnership return or Schedule C in order to file for the Payroll Protection Program Loan. The deadline is June 30, 2020, so we will NOT be waiting until the tax return due date of July 15 or an extended due date of September 15 or October 15 to prepare tax return for ALL Schedule C or Partnership clients. We are hoping to have all Schedule C tax returns and Partnership returns completed as soon as possible so that PPP applications may be submitted to your bank on a timely basis. There is a chance the PPP program will run out of money, so it is important to not put off gathering your information to prepare your taxes, if you have not already done so.

 

  1. If you have already applied for PPP and have not included your Partnership or Self-Employment income in your total “Monthly Payroll Costs,” it would be wise to check with you bank to see if you application can be amended. If not, we will have to explore other avenues.

 

  1. If your business or partnership began before February 15, 2020, but you were not in business in 2019, we will have to wait for additional guidance.

 

  1. If your 2019 tax return has already been completed, you may contact us if you need assistance in determining your optimal strategy and applying for EIDL or PPP.

 

  1. If we have your tax information we will be contacting you in order to determine optimal filing strategy for your Schedule C or Form 1065.

 

  1. If you have a partnership or small business and we do not have your tax information, please gather it and forward to us as soon as possible by email, or mail to Barrett CPA,  PO Box 288, Catskill, NY 12414.

 

ECONOMIC IMPACT PAYMENT

The $1200 payments should be arriving in your bank accounts on April 15, 2020 IF: You receive Social Security or Railroad Retirement or you filed a 2018 or 2019 Return with income below a certain ceiling and the IRS has your bank account information. If the IRS does not have your bank account information, there will be a web site available in the coming weeks to provide bank account information. We will let you know when this opens. If you have not filed taxes 2018 or 2019, we will work to complete as soon as possible. If you have not filed a return because you are below the filing threshold and do not collect Social Security or Railroad Retirement, there is  a web site https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here where you can enter your information to receive the Economic Impact Payment. If you do not provide a bank account,  and the address the IRS has is no longer valid, we would recommend filing a Form 8822  https://www.irs.gov/pub/irs-pdf/f8822.pdf as soon as possible to notify the IRS of your new address if you do not want to give them your bank account information. We can assist with Form 8822 or non-filer information if you need us to.

 

MORTGAGE and OTHER forbearance

Remember, you can contact your lenders, insurance companies, landlord, and utilities and ask for forbearance. This means you will not have to make payment for up to three months, without penalty or negative credit rating impact. Most Federal student loan forbearance is for six months.

 

As you may already know, there are more relief measures in the works, and more guidance yet to come for the various Credits, Loans, Grants, Payment,  Advances, and new (or returning) allowable deductions. We will let you know as information becomes available.

All Small Businesses and Non Profits

Including Corporations, proprietors, partnerships, associations, or faith-based organizations, but not government entities, which means housing authorities

  1. Gather Revenue and Cost of Goods Sold information for the period from February 1, 2019 to January 31, 2020, as well as other basic business information, most of which shows on your latest tax return.

  2. Landlords will also need to determine amount of lost rent.

  3. If a nonprofit entity you will also need all costs of operation for February 1, 2019 to January 31, 2020.

  4. If a faith based entity you will need secular social services operating expenses (e.g.-day care center, basketball program, food bank, etc. only - not Sunday school) for February 1, 2019 to January 31, 2020. We can help you with this.

  5. You will also need detailed information on the major owners, whether people or businesses. For nonprofit and faith based entities, SBA has told me you can leave it blank, but I actually believe you will need to put someone’s information there to be able to move to the next screen.

  6. Go to https://covid19relief.sba.gov/#/ and complete the application SBA Economic Injury Disaster Loan (EIDL). Be sure to indicate you want $10,000, and provide bank information. This $10,000 is a grant, and does not have to be paid back, even if you do not end up getting a larger loan. MAKE SURE YOU ARE ON THE covid19relief.sba.gov/# SITE BEFORE YOU PUT IN ANY PRIVATE INFORMATION. Also, make sure you answer question above Owner/Agent Info.

  7. For further instructions go to  https://www.uschamber.com/co/start/strategy/applying-for-sba-disaster-relief-loan

  8. If you need assistance in completing EIDL application, please email us. We will be following up with all clients who file an 1120, 1120S, 1065, 990, or 1040 Schedule C, E  or F, as well as church clients to make sure you have applied for this $10,000.

  9. If you are a proprietor, you are now able to claim unemployment. Please apply for it if you are out of work. There is a special way to determine your eligible income.

  10. If you are a proprietor with no employees, you are considered as having yourself as an employee, so please follow Action Items under EMPLOYERS.

  11. If you have no employees, you may actually want to get the SBA EIDL in excess of $10,000. The loan terms are very favorable, but will require more that just what was submitted on the SBA website.

Land Lords

Individuals, Partnerships, Multifamily Project owners, housing authorities

  1. We have not found anything barring indirect self-renters.

  2. Contact your lender and request mortgage forbearance.

  3. Realize you cannot evict – the courts are closed for this sort of thing anyway.

  4. If not a government, apply for EIDL – see  ALL SMALL BUSINESSES and NON-PROFITS

  5. If you have employees, see EMPLOYERS.

NON-PROFITS

and faith-based organizations

  1. If you have not yet received your Determination Letter from the IRS notifying you of your 501(c)(3) status, you may wish to apply now. We can help you with that. (Churches do not need this letter.)

  2. For 2020 Individuals may deduct up to $300 in money donations even if they don’t itemize on their taxes. Corporations may deduct up to 25% of their income on donations.

  3. Retirees over 70 ½ can make tax-advantaged donations up to $100,000 directly from their IRA, and any individual may now deduct 60% or their income.

  4. Refer to ALL SMALL BUSINESSES and NON-PROFITS and EMPLOYERS Action Items as applicable.

  5. If you have questions, please email us.

Employers

Under 500 employees, per site if hospitality industry. Includes self-employed, even if had no employees.

  1. CHANGED If you laid off employees since February 29, hire them back within 30 days of layoff. We will get into how to pay them later.

  2. CHANGED Keep track of hours paid but not worked since March 12, and reason employee did not work.

  3. Determine if you have funds to make next 941 Deposit. If not, don’t worry.

  4. Make sure NYS withholding is made if over $700.

  5. NY Payroll Reports are due on time. Proceed as usual. 

  6. CHANGED In addition to Action Item 2) gather all payroll data, by employee, by date, hours worked, hourly rate, tips collected, for the last year up to current. We will let you know what to do next. If you have a payroll company contact them to make sure they will be able to manipulate the appropriate payroll data for getting grants, loans, or credits.

  7. NEW Payment of employee student loan in 2020 is now an allowable cost for an employer’s educational assistance program, and is not taxable as income to the employee.

  8. NEW Determine if business receipts from January 1, 2020 to March 31, 2020 are less than 50% of business receipts from the first quarter of 2019. If so, please email us.

  9. NEW If you have not received any other grants or loans yet, and you have paid employees who did not work due to COVID-19, please email us ASAP. You may be eligible for Employee Retention Credit. This Credit also applies to employees you have hired back from layoff, even if they did no work (see Action Item 1.) This is funded by NOT making your 941 payments. It is not available to self-employment earnings, even though self-employment counts for other grants, loans, or unemployment.

  10. NEW If you are not a government entity and have not applied for the EIDL – see ALL SMALL BUSINESSES and NON-PROFITS and follow instructions to apply.

  11. NEW Have all above steps completed ASAP. The Payroll Protection Program (PPP) may be open as sone as April 2. PPP money is two and one half times your average monthly wages, as calculated by special formula. The $10,000, and any other EIDL loan is rolled into the PPP Forgivable Loan

  12. NEW There is a LOT going on with employees right now. The Labor Department is not engaging in enforcement actions if you act in good faith, in a reasonable manner. In fact, for 30 days the Labor Department is to be helping employers, not fining them. If you have questions, email us.

INDIVIDUALS

Recovery Rebate of $1200 each for taxpayer and spouse, $500 per dependent are on the way, adjusted down for income over limit-

  1. If you have not yet filed your 2019 return check your 2018 return- if Adjusted Gross Income, Line 7 on your Form 1040, is less than $75,000 for singles, $112,500 for heads of household, and $150,000 joint returns,  you will receive full rebate.

  2. Or, if 2019 return is filed, use Adjusted Gross Income found on  Line 8b on your Form 1040 or 1040-SR.

  3. If you had a tax refund deposited in bank account, insure account is still active and open, so Rebate can be deposited there.

  4. If you received a tax refund check, or paid amount due, verify your address showing on return. You will receive a check there.

  5. CHANGED If you have not needed to file a tax return, but receive Social Security or Railroad Retirement, do nothing – you will still receive Rebate. We have heard some sources saying you need to file a return to get the rebate, but that is not what the law says, and the IRS has NOT indicated that.

  6. If you have not yet filed 2019 taxes, and have not filed 2018 return, gather your tax  information and email it to us or send it to us at: Barrett CPA PO Box 288 Catskill, NY 12414. If you have already sent the information, we will be planning on finishing the return this week.

  7. If you were a dependent in 2019 or 2018, moved, changed bank accounts, or changed family size or status, please wait for further guidance. STILL NOTHING

Welcome To Catskill

422 Main Street

Catskill, NY 12414

ldc@welcometocatskill.com

518-470-3508