5 Ways to maximize your Cash Flow NOW: Relevant Strategies under the Coronavirus Aid, Relief, and Economic Security Act, a.k.a. the “CARES Act”

1) Stimulus Checks = Money Now

Individuals making up to $75,000 a year would receive checks for $1,200, with an additional $500 per child. The payments would progressively decrease for individuals making more than $75,000, with an income cap of $99,000.

The catch: in most cases, you must file your tax returns for 2018 and/or 2019 to receive the check. Eligibility for the check is based on the latest tax return on file. Please contact us if you need to have your tax returns prepared.

2) Amend your Prior Tax Returns for expanded Net Operating Loss Provisions. Result = Tax Refunds, to Provide Cash Flow in a Time of Need

The CARES Act allows for a five-year carryback of net operating losses arising in 2018, 2019, and 2020.   It also allows net operating losses to offset 100% of income (expanded from 80% income offset). This means that you can carry losses back for 5 years potentially resulting in tax refunds, and thus, providing cash flow relatively quickly.

What to do now:   Contact us to discuss all of your business activities over the last few years and see if you NOW qualify for tax refunds.

3) Employer Credits for Retention of Employees

There is a refundable payroll tax credit for 50% of wages paid if your operations have been suspended or you have had more than a 50% reduction in quarterly receipts. If you have fewer than 100 employees, you calculate the credit based on all your employees’ wages.

What this means is that you may realize a payroll tax refund and the funds can be utilized NOW.

4) Delay of Employer Payroll Taxes

The social security taxes that employers pay and the self-employment tax paid by self-employed individuals due between March 27, 2020, to December 31, 2020, are delayed. These amounts can now be paid over 2 years.

5) Business Loans

If you have fewer than 500 employees or are self-employed, you are eligible to apply for a business loan of up to $10 million.   Interest rates max out at 4% and some of the loan amounts may be forgiven if used within 8 weeks for the following costs: payroll (including health care and independent contractors) mortgage or rent and utility payments.

Please give us a call or shoot us an email to schedule a time to talk about your finances. Our thoughts are with the sick and their families and we extend our heartfelt gratitude to the healthcare workers, first responders, and essential service providers throughout the United States and around the world. Moskowitz LLP and I are grateful for our amazing clients.