In light of the recent COVID-19 threat, many small business owners are justifiably worried about the various government programs and deals that have already been put in place to help small businesses and mitigate any potential recession impact. There is reason to be concerned.
The restaurant industry, to cite just one example, has projected a loss of around six million jobs and a financial hit of approximately $225 billion during the next 90 days.
How do the new programs affect small business taxes, lighten the recession impact, and in general, assist small business owners with recovering from such a profound economic jolt? There are three main categories of deals available for companies who want to lessen the financial blow of the virus: loan deferment, direct financial assistance, and policies to help commercial tenants avoid eviction.
It's likely there will be a comprehensive package of small business tax credits delivered in the next few weeks as well.
What You Need to Know About a Recession
Amid the crisis, there will be many financial opportunities for small business owners who keep track of all the deals, savings advantages, and other government programs to help small businesses, make tax planning easier, and spur savings. Here are some of the key opportunities you should review with small business financial advisers in order to prevent potential losses:
- Federal Tax Credits: For sick-leave and paid leave, small business owners will get a 100 percent tax credit for verifiable expenses in this category.
- Payroll Tax Cut: No legislation has yet been forthcoming, but most expect a full or partial payroll tax break for small business owners.
- The SBA Economic Injury Disaster Loan Program: You can borrow up to $2 million in working capital and take up to 30 years to repay at low-interest rates. For many small business owners, this is the most effective and direct form of help.
- State Micro-loan Programs: There are already hundreds of micro-loan programs springing up in states and cities. All are geared to help small businesses that need low-interest working capital loans to weather the virus crisis.
- Federal Tax Payment and Filing Deadline Extension: Deadline for filing has been extended to July 15, for individuals and businesses.
- Bank-based Help: Numerous banks have begun offering forbearance and special deferment programs to their business customers. Ask your bank about their participation in these arrangements. Note that while some might say there's nothing available at the moment, it's quite possible that all the nation's larger financial institutions will eventually be offering something in the way of help for small business owners who owe on past loans.
A competent small business CFO advisory service, or an experienced CPA for small businesses, can help you minimize small business taxes and locate programs in your local area, many of which are ties to municipal, state, and regional loan opportunities.
When to Act
There's no point in waiting for the U.S. Congress to act. In order to take advantage of financial opportunities for small business, you need a small business CPA that fully comprehends the recession impact, potential tax planning techniques for this unique situation, and someone who is facile with small business bookkeeping and small business accounting methods.
Whatever small business tax credits materialize in the next few months, the assistance of a financial adviser and small business CPA will be essential. Our team at Fusion CPA has the tools to show you what you need to know about a recession and act as a financial adviser amid a turbulent time period. We are here to help. We offer small business accounting and small business bookkeeping, small business CFO advisory, and small business tax planning. Our goal is to be a partner you can trust and depend on while this unpredictable national crisis unfolds. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive