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Severn MD: Introduction to Relief Offered from COVID-19

By Lisa Church

Services for Real Estate Pros with Lisa D Church CPA, EA, MBA, NTPI Fellow

April 04, 2020 11:23 AM

The following is a brief introduction to just some of the US Government stimulus funding from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that provides relief from the COVID-19 impact.

Relief for Individuals:

All individuals with a Social Security Number who do not exceed income limits shown in brackets “[ ]” will receive rebates as follows:

1) Individuals = $1,200 [if income < $75K (single) or $112.5K (HOH)]

2) Couples = $2,400 [if income < $150,000 (married filling joint)]

3) Per Child under 17 = $500

For example, a family of five can receive:

$2,400 couple + 3children*$500/child = $3,900

Each member of your family must have a Social Security Number (included on your last tax return) to claim a rebate. People receiving Social Security or Supplemental Security Income (SSI) are eligible.

If the IRS has your direct deposit details from your 2019 or 2018 tax return you do not need to do anything, and your rebate will be deposited into your checking account. The IRS is developing a “web-based portal” for those who did not provide the IRS deposit details or whose details have changed.

Relief for taking Early distributions from Retirement plans

If you are under 59 ½ and you, your spouse, or child tested positive for the coronavirus, or if you lost income because of the virus (i.e., laid off, furloughed, lost hours, could not work due to child care, had to reduce business hours) the 10% additional tax for early distributions from IRAs, 401K plans, and defined contribution plans does not apply to you. For more details go to https://www.irs.gov/

Relief for Student Loans

Students with federally backed student loans will be allowed to defer making payments for six months, without interest or other penalty, through Sept. 30, 2020. However, student borrowers must request the option to defer payments from their loan provider

For more details go to: https://studentaid.gov/announcements-events/coronavirus

Relief for Small Businesses

Some of the relief provided by the Small Business Administration (SBA) includes:

(1) Existing loans with the SBA are relieved of loan payments for the next 6 months (this includes relief from principal, interest, and fees)

(2) Paycheck Protection Program (PPP) provides small businesses (and other entities) zero fee loans of up to $10million (i.e., up to 2.5X your average total monthly payroll costs for the 12 months prior to loan origination minus exclusions)

If the small business retains its employees and their salary levels they can be forgiven (not pay back) up to 8 weeks of the average payroll costs. (75% of loan must be used for payroll)

The principal and interest on the loan can be deferred up to 1 year (all borrower fees are waived)

Those eligible for the PPP include small businesses, nonprofit organizations, and veteran’s organizations that have no more than 500 employees. It also includes sole-proprietors, independent contractors, and other self-employed individuals.

(3) The Economic Injury Disaster Loan (EIDL) Emergency Advance provides loan advances up to $10,000 to small businesses experiencing loss of revenue from COVID-19. The advance up to $10K is considered a grant and will not have to be repaid. The rest of the EIDL loan that caps out at $2million is not forgivable but is a low interest (3.75% cap) 30 year loan.

(4) SBA Express Bridge Loan provides quick access to $25K to fill in the gap for business applying for the SBA EIDL.

I provide significantly more information in a “Small business Information Guide” in an easy to download PDF that does not ask for your email and provides helpful information for small businesses on eligibility, what lenders are looking for, how much can you borrow, exclusions, what qualifies for loan forgiveness, and frequently asked questions. This free pdf file download is located on my home page at: https://www.waterfronttax.com/home/

The following link provides guidance for applying for the SBA loans:

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

How can I help you?

I’m a fixed-fee consultant, not a lender agent working with a bank. My goals are to:

* understand each of the products so that I can advise you as to which one is more advantageous for you

*help you calculate an estimate of the loan amount for which you’d qualify and how much could be forgiven

*know what amount to include in payroll for a Schedule C filer versus a Partnership versus a Corporation

*assist you in gathering the information necessary for completing the loan application(s)

determine if your business needs a combination of the relief programs and loans offered

My job is to advise you as my client on the best route to pursue in taking advantage of the relief programs offered. Check out the “Small business Information Guide” at the bottom of my website homepage. If you’d like more assistance with the process of obtaining a loan or a credit and are interested in pursuing a fixed fee engagement with a trusted advisor, you can reach me directly at (931) 267-3071 or lisa@waterfronttax.com.

My practice is in Severn, MD.

I specialize in the following services for both businesses and individuals:

Tax Services:

Tax Preparation & Tax Planning

Virtual Tax Preparation

Audit Protection

IRS Tax Problem Resolution

Accounting & Bookkeeping Services:

Outsourced Accounting and Bookkeeping

Payroll Services

Business Consulting

Outsourced CFO Services