• Bsquared

    Customized Solutions for Your Accounting & Business Needs

    Offices in St. Louis, MO & Panama City Beach, FL

    MO (636)-333-3339 & FL (850)-775-1675


  • In the first installment of this guide, we explored what the government has done in a long list of Coronavirus relief measures aimed at disaster relief and economic stimulus. Now, it’s time to take a look at what individuals and business owners need to be doing right now to stay compliant with the rules set forth for those who benefited.

    File a Personal Income Tax Extension

    The Internal Revenue Service officially extended the 2020 income tax return filing deadline to May 17, but that’s not a guarantee that you won’t be penalized for failing to file an extension. Today is the day to file that extension without the IRS assessing a penalty.

    Contact your tax preparer if you have questions or need to file an extension.

    Unemployment forgiveness

    There will be some forgiveness, but no need to file an amendment! The IRS or state agency will handle refunding said forgiveness, as applicable.

    One note about unemployment forgiveness: 13 states are not allowing the American Rescue Plan tax break on unemployment benefits up to $10,200 for individuals and couples making less than $150,000. If you work in these states and received unemployment benefits in 2020, be prepared to pay state taxes on the total amount you received:

    • Colorado
    • Georgia
    • Hawaii
    • Idaho
    • Kentucky
    • Massachusetts
    • Minnesota
    • Mississippi
    • North Carolina
    • New York
    • Rhode Island
    • South Carolina
    • West Virginia

    Apply for a Targeted EIDL Advance Grant

    The Small Business Administration earlier this month notified Economic Injury Disaster Loan (EIDL) recipients that they may be eligible for additional grand funds through the Targeted EIDL Advance program. Recipients of less than $10,000 in EIDL grants in 2020 can apply for a new grant, but the total from 2020 and 2021 will not exceed $10,000.

    Businesses that apply must:

    • Be located in a low-income community (check the map to see if your business qualifies);
    • Have suffered more than 30 percent economic loss in a single 8-week period starting March 2, 2020, or later; and,
    • Must have 300 or fewer employees. That includes sole proprietors, independent contractors, and private nonprofits.

    Apply for (Additional) EIDL Loans

    EIDL loans administered by the SBA in 2020 were capped at $150,000 for six months of demonstrable economic injury. The administration changed that policy and notified loan recipients April 7 that increased loan amounts of up to $500,000 will take into consideration up to 24 months of losses.

    In addition, COVID-19 EIDL payments are in forbearance until 2022 or 24 months from the date of the note you signed in 2020. New loans taken in 2021 won’t require a first payment until 18 months after the date of the note. Interest will accrue during the entire period between the date of the note and the first payment due date, and with your business (for loans greater than $25,000) and unsecured personal guarantee (for loans more than $200,000 to owners with 20 percent or more ownership) as collateral, it’s important to keep track of when your note comes due.

    If you did receive an EIDL loan in 2020 and receive a second loan in 2021, your payment deferment period is 24 months from the date of your 2020 loan. It won’t change with the second loan payment.

    Call for Backup

    Now more than ever, there’s a lot riding on compliance with government tax and stimulus policy. If you need help sorting through all of the immediate and downstream effects these measures will have on your personal and business taxes, contact us today to make sure you’ve checked all the boxes and are making an actionable plan for 2021, 2022, and beyond.

Powered by WP Robot