Many of you are adjusting to the changes all of us are making because of the Covid-19 crisis. The leadership at Stableford continues to monitor the rapidly changing situation as it evolves and we remain vigilant in our ongoing efforts to help you navigate the unprecedented challenges we all face.
Below is a summary of some of the most important information that we believe you will want to know.
Stableford Capital Tax Updates
The key information regarding tax deadlines and credits according to Mark Barone, CPA, who heads up Stableford Tax include:
Tax Deadlines Extended
The deadline for contributing to IRA’s and Health Savings Accounts (HSA) have been extended to July 15th which is in line with the individual tax return due date. This will also include contributions to other plans such as SEP’s, Simple and Keogh plan contributions. Due dates for 2020 federal estimated tax payments have changed as well – the 1st quarter payment has been pushed back to July 15th.
State Tax Credits
Most states have already updated their deadline to match federal but may not have changed the deadline to contribute to the state tax credit programs. Therefore, as of now these amounts still need to be contributed by April 15th.
Mark Barone has been a tax and accounting specialist for over 20 years. After graduating from the University of Iowa, he joined KPMG as an associate in Chicago before moving to Phoenix in 1998 to work with Deloitte. Barone then transitioned into private practice for several years prior to opening his own firm. In 2016, he partnered with Stableford Capital Founder Andy Brinkman and fellow CPA Jane Hemminger to launch Stableford Tax. As a leader in the active advisory firm’s tax division, Barone looks forward to helping Stableford’s clients gain access to asset management, financial planning, and tax services. under one roof.
Retirement Accounts
According to a Bloomberg Law article (posted March 25), Retirement account holders affected by the new coronavirus wouldn’t owe 10% penalties for early emergency withdrawals and could take up to $100,000 out of their 401(k)s and other retirement accounts under a proposed U.S. stimulus package.
Retirement Changes Would Include:
* Pension payments: Single employers can delay making pension plan funding contributions due this year until January 2021.
Cares Act Update
Friday, March 27th, 2020 the president signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the largest stimulus package ever in order to address the unprecedented public health and economic crisis related to COVID-19. Here is a brief summary of what it includes.
The 880-page document includes a provision called the “Paycheck Protection Program” (section 1102, page 9). This is the section outlining the forgivable loans business owners can access, so they effectively function as grants. This program is designed to assist businesses and nonprofits to pay payroll and overhead costs for eight weeks.
These loans will be available through FDIC banks and FCUA credit unions. Funds are available to cover payroll costs and overhead costs and can include payments to independent contractors, sick leave, the FMLA-style requirements recently placed on employers under 50 employees, health insurance premiums, retirement benefits, so long as those individuals are not earning more than $100k and are living in the US.
These funds are to be used for the following purposes:
- Rent
- Utilities
- Payroll costs
- Health insurance
- Mortgage interest on real estate debt (not principal)
- Interest on other debt incurred before February 15, 2020. (Section 1102, p. 20)
The loan proceeds used for these purposes are eligible to be forgiven. However, you will be required to present the amount that you expect to be forgiven to the lender within 90 days (It’s the borrower’s responsibility to track all eligible expenses). (Section 1106, p. 41.)
To receive loan forgiveness, you will need detailed records of employee’s pay rates, payroll tax filing reports, unemployment filing and canceled checks for rent and utilities. Be aware that you will need to produce documentation to have your loan forgiven.
Any forgiven loan is taxable income.
Federal Employment Insurance and Stimulus Checks
The U.S. government is about to send checks (or direct deposits) to many Americans to help people during the financial volatility caused by the Covid-19 crisis. Treasury Secretary Steven Mnuchin has set a goal of getting the first payments out the door the week of April 6. Many experts agree that it is an ambitious timetable and that it will likely be pushed back to later in April.
If you’re curious about how much you might receive try this stimulus check calculator.
Here are details about the unprecedented Federal employment insurance plan.
As it is with any new legislation, more guidance will become available in the coming weeks as to what types of expenses are or are not eligible to be forgiven. We will continue to monitor the situation.
From all of us at Stableford Capital – Be well and stay safe.
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