COVID-19 caught most people and businesses off-guard and unprepared. This newsletter provides you with some additional resources as well as timely information regarding Estate Planning Opportunities and Tax Matters.
We are hearing from most businesses and individuals that cash flow has dried up. Interestingly, so far there do not appear to be significant supply chain problems (other than personal protection items). However, taking advantage of the CARES Act has been a daunting endeavor. Some common issues:
PPP / EIDL Loans Requiring Recent Books and Accounting
Many businesses struggle with their accounting needs during the best of times. In our firm, it is not uncommon for business records to be missing or unavailable – this makes applying for a CARES ACT loan, such as PPP or EIDL impossible.
We have solutions. For instance, for some we have been able to support lender packages by providing information such as Certificates of Good Standing or explanations of accounting irregularities. We’ve also been able to quickly construct necessary Income and Expense Statements, as well as provide payroll calculations.
Payroll and Self-Employment Tax Relief
If you are in business for yourself, payroll and taxes and self-employment taxes are big burdens. While the CARES ACT does provide significant relief, some of our clients have had issues because of the salary cap. We have been providing calculations for the loan requests, as well as advising our clients on how to maximize the forgiveness of the loans.
The IRS is still issuing tax refunds: Look at Cost Segregation and Unfiled Tax Returns
Because of the cash crunch and since the IRS is still issuing tax refunds, we have been busy looking for additional tax refunds for clients. Some of areas of investigation are:
- Cost segregation analysis studies to take advantage of depreciation. These may create losses and thus result in overpaid prior tax. See our Cost Segregation PDF for more information regarding cost segregation including some examples. Some clients have saved over $400,000 in tax using this technique and it is relatively inexpensive, as well as quick to implement.
Tax return preparation
In our line of work, it is not uncommon for several years of tax returns to be unfiled. Surprisingly, we often find that once the tax returns are prepared, tax refunds are due to our clients. If you have unfiled tax returns, do not delay in having those tax returns prepared and filed.
Help with IRS Stimulus Check
- First Go to IRS.gov
- Enter your information:
The SSN must be entered WITHOUT any dashes. The date of birth must be entered WITH slashes. The address and ZIP code (5 digits only) must match the return exactly. The AGI must be entered in whole numbers only WITHOUT the comma(s).
- Have your 2018 and/or 2019 tax return handy: If you need another copy of it and our office prepared it, please contact me.
- Department of Labor’s page on COVID-19 and the American Workplace. On April 1, 2020 the U.S. Department of Labor announced policies on how American workers and employers benefit from protections and relief offered by the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act.
FFCRA will help the United States combat and defeat COVID-19 by reimbursing American private employers that have fewer than 500 employees with tax credits for the cost of providing employees with paid leave taken for specified reasons related to COVID-19.
- Equifax’s Knowledge Center is a good resource to find unemployment information for relative to COVID-19, as well as other links to state-by-state Departments of Labor & Employment.
- California Employment Development Department provides online benefit applications and additional resources specific to California.
- U.S. Chamber of Commerce does a good job summarizing options for self-employed clients without work—from gig workers and independent contractors to small business owners.
- Credit Cards and Corona. This Bankrate webpage provides information about credit cards and credit scores during this time.
- Navigating Stress During Financial Crisis. A good reminder that financial distress can aggravate anxiety and depression. Remember you are not alone. We will get through this. Never, hesitate to reach out to us during this time. We can help you make a plan.
Moskowitz LLP Estate Planning Practice
Now is the time to revisit your Estate Plan and Get your Plans in Order. Estate planning is not only for the wealthy – everybody can benefit by ensuring that your instructions as to your assets, health, and finances are followed. Without the planning and documents, your intentions may not be realized. This could mean that health care decisions are made for you that you may not otherwise desire or an uneven distribution of assets.
Moreover, estate planning includes providing instructions to family members or a trusted person to carry out your wishes if you become incapacitated. It is also important that you know what your documents mean so that your instructions can be followed.
Please see our short Estate Planning Video for more information.
In these trying times, the strength of our community has been inspiring. It is a pleasure to be of service to you. Please do not hesitate to reach out to us.
Steve Moskowitz, Founding Partner