One day after the old US tax deadline — Thursday, April 16, Mark Zandi Chief Economist at Moody’s Analytics projects the U.S. might peak at 23 million unemployment claims just one month after the outbreak. We at Sugaberry know that the new coronavirus has ravaged the economy and many of our sisters, friends, aunties, elders and their counterparts are hurting and hustling to make ways out of seemingly no way. Compelled to provide our community with solutions to help contractors, employers and employees alike, our Co-Founder Thai sat down for a quick and highly effective Q&A with leading financial and small business expert, Shannon Nash to give you, our valued readers trustworthy and reliable fiscal information during this time.
Shannon has been featured as a tax, finance and legal expert on CNN’s Newsroom with Carol Costello, Essence, LA Parent Magazine, Woman’s Day, and The Washington Times – to name several of her long list of appearances.
Life Lines (and links) for Small Businesses
Thai: Thank you so much for doing this! Black women are starting businesses at the fastest clip of any racial group, according to research by American Express. With this in mind, we may be disproportionately impacted by the economic downturn. What resources are available for small business owners during this time?
Shannon: These are my go-to resources for female small business owners and all small business owners:
- Women’s Business Enterprise National Council (WBENC) – Provides resources for Women-Owned Businesses in Response to COVID-19
- National Association of Women Business Owners – Provides weekly webinars on COVID-19 support for women business owners.
- IRS – Gives current tax rules and guidance.
(Note: Sugaberry staff has successfully and personally tested this link several times at different times of the day because site crashes have been widely reported by major news outlets.)
- US Chamber of Commerce Coronavirus Small Business Guide – Lists funding resources by state and articles/guidance to help small businesses operate through this pandemic
- America’s SBDC – Provides webinars and resources for small business to navigate COVID-19 news and funding programs
- Small Business Administration (SBA) – Provides funding information and other resources for small businesses
- Small Business Majority – Daily updates and webinars by state on new funding opportunities and policy developments. Daily Updates for Small Businesses
- Gusto – Provides a small business resource hub with state and local grants and funding from private resources.
- LISC – Provides COVID-19 resources and local funding opportunities for small businesses by state.
Taking the Guesswork Out of these Stimulus Checks
Thai: Stimulus checks have started rolling out – what can moms expect to receive and how do they go about accessing this benefit?
Shannon: Quick background and numbers recap on the stimulus checks:
- Single people earning up to $75,000 a year get $1,200
- Married couples earning $150,000 a year get $2,400
- Parent receive an additional $500 for each child under 17
- This is a one-time payment and phases out when your income reaches certain thresholds
- If your income is greater than $99,000 for a single filer and $198,000 for married couples you will not get a stimulus check.
- Your income was reviewed based off of your tax return for 2019 or if you haven’t filed yet then 2018’s tax return.
Some 150 million Americans will receive a stimulus check. The first wave of around 80 million people will see these funds via direct deposit this week, with many hitting bank accounts by April 15.
Bank information was aggregated based on tax returns for 2018 or 2019 where you gave the IRS your direct deposit routing and account numbers. For those who didn’t provide the IRS with banking details, they should start getting checks in the mail in a few weeks.
The good news is you don’t have to do anything. The federal government will send it without further action from you.
Please be careful of scams. The IRS will not call or text you about this check. Please don’t give out your banking information, social security number, credit card or any personal financial information to anyone claiming to be contacting you about your stimulus check.
For more information and to get the status of your stimulus check visit: Economic Impact Payments
The CARES ACT with New Provisions
Thai: April 15 is usually the tax deadline, however the federal government has extended the deadline this year. What do our readers need to know about tax implications or provisions in the CARES Act?
Shannon: The CARES Act includes several new tax nuggets to help people. Here are some of the highlights:
- The IRS (and most states) have extended tax deadlines:
- Individuals and C corporations can defer filing their 2019 taxes and making tax payments until July 15.
- Nonprofits with tax returns due on May 15, now have until July 15 to file.
- Contributions for the 2019 tax year for IRA’s and HSA’s (health saving accounts have contributions) have also been moved to July 15.
- Borrowing and Hardship Distribution rules for 401k/IRAs are relaxed.
- You can take up to $100,000 out of your 401k/IRA without paying the 10% early withdrawal penalty and spread out paying any ordinary income taxes owed on that withdrawal over 3 years.
- You can borrow up to $100,000 from your 401k/IRA tax free as long as you pay it all back within 3 years.
- Taking money out of your 401k/IRA should really be a last resort and I highly recommend you speak with your financial advisor before doing so.
- For cash donations made in 2020, the law added a charitable contribution deduction up to $300 for people who take the standard deduction and people who itemize their deductions (on Schedule A of Form 1040) can now deduct up to 100% of their cash donations (previously this was limited to 60% of your adjusted gross income).
- Through December 31, Businesses can reimburse employees up to $5,250 for student loan payments and these payments are tax free for the employee.
- Businesses can take Net Operating Losses on their tax returns generated in 2018, 2019 or 2020 retroactive up to five years.
More Assistance with Payroll Taxes
- Multiple changes were made to help businesses with payroll taxes.
- Employee Retention Credit – Businesses that keep employees on payroll may be eligible for an Employee Retention Credit. This is a refundable tax credit equal to 50% (up to $5,000) of qualifying wages paid to employees from March 13th through the end of the year.
- COVID-19 Employment Tax Credit – In addition to the Employee Retention Credit, businesses may qualify for a tax credit under The Families First Coronavirus Response Act (FFCRA). This credit allows businesses to retain certain employment taxes and instead of paying them to the IRS, keep the funds to cover coronavirus-related paid sick and family leave expenses required by the FFCRA.
- Payroll Tax Payment Delay – Businesses can also delay payment of the employer’s share of social security taxes (6.2%). This delay is spread out over two years, with half due on December 31, 2021, and the other half on December 31, 2022.
- Be warned, businesses that take the Employee Retention Credit or Payroll Tax Payment Delay will not likely be able to take funds under the Paycheck Protection Program (PPP) loan program.
- For more information on these tax rules please visit: Coronavirus Tax Relief and Economic Impact Payments.
Accessing Unemployment Benefits
Thai: We’ve been seeing unprecedented unemployment rates across the country – how do those impacted get info on extended unemployment benefits programs?
Shannon: Although every state has its own unemployment rules and procedures, The CARES Act made some important expansions to unemployment benefits:
- Anyone collecting unemployment can receive an additional $600 per week through July 31.
- They can also receive an additional 13 weeks of unemployment benefits over the total weeks your state offers (in most states that is 26 weeks).
- Unemployment benefits are extended to include those who are self-employed, independent contractors or gig workers. You also don’t have to be actively looking for another job to qualify for unemployment benefits.
For more information visit: How Do I File for Unemployment Insurance?
There is also an app called DoNotPay that is offering a free service to file your unemployment application for you. DoNotPay – The World’s First Robot Lawyer
Shannon is a C-suite leader with deep experience in financial and legal operations, fundraising, treasury and cash management. She was featured in the San Francisco Business Times as one of the most influential women in the Bay Area in 2019. Shannon is an attorney and a CPA, who is passionate about building companies, teams, and people. She began her career as a corporate and tax attorney with KPMG, K&L Gates LLP, and Cooley LLP. She has also served as a senior attorney with Amgen, CFO of Sunseeker Media, COO of Aspire University, and VP Finance/Head of Human Resources for Cumulus Media’s San Francisco market. She was most recently the CFO of Insidesource, a global space design company, where she served on the Executive Management Team and Board Treasurer. Shannon holds a bachelor’s degree in accounting from University of Virginia McIntire School of Commerce and a J.D. from the University of Virginia School of Law.