Yes, it’s caught everyone off guard and something like no one has ever experienced in the day and age, but the question is how do so many business owners, self-employed individuals, and everyday workers deal with just basic survival. At the time of this writing, these two highlighted economic options have likely been more fine-tuned, but the purpose is just to make you aware of what you should be investigating because no one’s answer is going to be a “one size fits all.
”Tax Deadlines, Filing Penalties and Interest Charges
Per Tax Talks, “President Trump declared a national emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the coronavirus. This declaration allows the Treasury Department at the IRS to extend the deadline for certain taxpayers and small businesses to pay taxes until December 31, 2020 as Treasury Secretary Steven Mnuchin suggested earlier this week.”
Per Bloomberg Law News in the same declaration, “the IRS can choose from a range of powers: abating penalties for failing to file or pay taxes, or postponing federal tax filing and payment deadlines without interest or penalties accruing, according to the agency’s Internal Revenue Manual posted on its website.”
This has not taken effect as of yet, March 13, 2020, and there are a number of major accounting organizations which are working to help formulate a plan for the Internal Revenue Service to work on formulating a plan which would be beneficial for all Americans. In the meantime, make sure all of your extensions have been filed on time, your returns are filed on time if at all possible, and if you need to set-up an installment agreement, then you complete it now instead of waiting for the government to take action on this issue.
SBA Disaster Assistance Loans
The Economic Injury Disaster Loans offer up to $2 million in assistance to small business, as a result of the COVID-19, upon a request received from a state’s or territory’s governor. This includes small businesses and private, nonprofit organizations in designated areas of a state or territory to help alleviate economic injury caused by COVID-19. Once a declaration is made for designated areas within a state, the information on the application process will be made available. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%. These loans will be available with terms of up to a maximum of 30 years, determined on a case-by-case basis, based upon each borrower’s ability to repay.
What does this ultimately mean to you? Nothing in life is ever free and there are going to be hoops that you need to jump through. In the end there’s going to be qualifiers that everyone is going to need to be addressed, and whether it’s being able to file your tax returns late, or consider a SBA loan, it doesn’t mean a free pass not to have adequate financials that you can defend. Again the challenge is that if you feel you can bypass performing your due diligence, it can potentially cause you more harm than good later on.
Dwayne J. Briscoe