COVID-19 Business Update – 27 January 2021
For many of us, it was our networks that helped us get through the last year. That was one of the lessons that Ivan Meisner, founder of BNI, learned from 2020. He also learned the value of limiting exposure to bad news by picking up what he needed to know from news apps. One business owner struggled with the stress of working from home while overseeing remote schooling for his children until he switched his perspective to the opportunity of spending time with his children. Entrepreneurs who used fear to inspire focus transformed their fear into focus, which helped them survive and thrive during difficult times.
Reflecting on lessons learned can help us avoid making the same mistakes again and can help us to be proactive in creating a better tomorrow.
The Biden Plan
Economic Impact Payments
The IRS quickly geared up for the second round of $600 stimulus payments and sent out money in record time. But some people are still waiting for that payment. This article from CNet lays out the different scenarios and offers helpful tips on what to do if the IRS Get My Payment tool says your payment was mailed out weeks ago, but you still haven’t received it. If it’s been more than four weeks since your payment was mailed, you may need to ask the IRS to track it down, as described in this article. You can find more information on the current round of payments by checking the IRS Frequently Asked Questions.
If you’re eligible for a payment, but don’t receive it by the end of January, you may have to claim it as a Recovery Rebate Credit on your 2020 tax return. If you’re eligible for a bigger payment than you received, you can claim the difference on your 2020 tax return.
What about the next round of $1,400 payments in Biden’s stimulus plan? The Senate already has a full plate, with hearings for cabinet secretaries and an impeachment trial. President Biden wants to prioritize this, so those may go out as soon as February, but possibly not until March or April, if ultimately approved by Congress.
Paycheck Protection Program (PPP)
The SBA has been busy issuing guidance for the new round of payments through the PPP. As described in the Journal of Accountancy, guidance is out for:
- Second draw loans: how to calculate revenue reduction and maximum loan amounts plus required documentation.
- First draw loans under the new PPP: how to calculate maximum loan amounts and required documentation.
- What to do if a calculation error results in too big of a loan.
- How to resubmit a forgiveness application with the new form if an application with the old form has already been made.
Borrowers who received less than $150,000 can now apply for forgiveness with a new one-page form from the SBA, Form 3508S. This new form asks for the amount of loan proceeds spent on eligible expenses and the amount of the loan, and asks loan recipients to certify that they complied with the requirements of the program and that they are providing correct information. Applicants do not need to provide any documentation but need to retain it in case of an audit or review by the SBA.
More details are available at the SBA website.
A provision of former President Trump’s stimulus program offers extra benefits for low-income taxpayers who are eligible for the Earned Income Tax Credit. Those eligible for the EITC can choose between the income figures from 2019 or 2020 when they file their 2020 tax return. Whichever year’s income results in the biggest refund can be used. This may help people who were unemployed or underemployed in 2020, but whose income from 2019 makes them eligible for a bigger refund.
Will your stimulus payments increase the tax on your Social Security benefits? No, they will not, because they are not considered to be taxable income.
If you pulled money out of a retirement account to help you weather 2020, you may be eligible for tax relief. The usual 10% penalty on early withdrawals has been waived, and you have three years to repay the amount withdrawn. Even if you don’t put the cash back, you have three years to pay the additional income tax on the amount withdrawn. If you plan on repaying the amount you pulled out, it may be prudent to pay the tax on 1/3 of the amount withdrawn, and then request a refund by amending your return later.
LIVING WITH THE PANDEMIC
Can your employer force you to get the COVID-19 vaccine? The answer is yes, but there are some exceptions. People with certain medical conditions or religious objections can opt out, but that may mean that they will be required to work from home or take a leave of absence to protect others at the same workplace.
Working from home
We’ve all been on far more Zoom calls in the last year than in all previous years. This article in Forbes outlines four pointers for making yourself appear more professional.
- Prepare a space with good lighting, earbuds or a headset, and position yourself so your head appears in the center of the screen.
- Remove distractions by keeping pets and family members out of the room and leave a note for delivery people to either not ring the doorbell or to come back later.
- Get your electronics ready. Connect directly to your router if your wi-fi is unreliable and make sure everything is charged before you start. Put a clock where you can see it to keep track of time.
- Present a professional appearance. A suit or formal workwear isn’t required, but a neat appearance is.
Working from home will be part of the norm for the foreseeable future, so we might as well make the best of our online meetings.
- The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
- The CDC also has recommendations for businesses and employers
- Intuit QuickBooks has a dedicated page to help small businesses
- Entrepreneur put together a listing of free tech resources for remote work
- The Consumer Financial Protection Bureau has warnings about COVID-related scams
- Fast Company has a listing of the best productivity apps for 2020
- The New York Times has an online newsletter on K-12 and higher education
- The Wall Street Journal has a collection of articles on education
- The Atlantic has a state-by-state coronavirus tracker
We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!