Covid 19, Your Taxes, Money & Business

Hello everyone! I hope we’re doing okay and everyone is staying safe & healthy. It's been a pretty crazy couple of weeks and it seems that the crazy won't be dying down anytime soon. Don’t need us to tell you that but you may have some questions regarding taxes and how it all affects you, so I’ve done my best to answer some below. Let us know if they’re of any help, and if there’s anything we could do.

When the heck are taxes due?

First off, the bill to extend taxes has been signed making the official due date July 15, 2020. This is for both, the filing of Individual & Corporation returns, as well as the any tax payments that are due, interest & penalty free. If there’s a tax case, or tax debt negotiation that you’re undergoing, then expect those to be on pause as those dept’s definitely seem to be.

If you’re making estimated tax payments every quarter, then you could continue to do so if possible, but if you want to pause because of financial uncertainty, then we’d recommend holding off on payments and look to fight them on a reasonable cause if they do decide tack charges on.

If we’re expecting a refund, the IRS is still processing returns and paying out refunds - in fact the Treasury is encouraging it so americans have funds to navigate these turbulent times. Just log into your portal and upload any tax documents you may have, and we’ll get in touch once we get the ball rolling. If you’re new, and want to sign up with us, let us know and we’ll get you set up with our secure online portal. We make the whole process easy and painless, feel free to email us with your full name, and phone number and we'll have you set up in no time!

So now that I’m “working from home” – can I take advantage of home office expenses?

Unfortunately, no. If you’re an employee and working from home, the TCJA (Trump tax code passed couple years back) took out the home office deduction, so all “work from home” expenses are not deductible and the government essentially expects you to be reimbursed through your employer for said expenses. This doesn’t mean however that all hope is lost, since some of these deductions might still be available if we’re itemizing our deductions.

Okay - What about everything else going on regarding my money? The markets? Are we getting checks? I have so many questions!

I know, and we in the tax world have a lot of questions too. You would think we’d have an easier and assured time getting the information we need, after all people’s lives and livelihoods are at risk, but alas what we’re being fed with is drips of information and nothing concrete.

For instance, last year Congress modified the tax code to offer reprieve from all taxes during national disasters, which would mean a blanket suspension of all tax payments until the disaster is over plus 60 days. The IRS so far has argued that it doesn't apply to the novel corona virus pandemic, but members of Congress are saying that it should. Here's a great write-up by Richard Rubin on the matter in this WSJ Article, and if you're so inclined, maybe write to or call your local Congress person since it seems they’re the only ones who can fix it, ask them to fight the matter on your behalf.

Regarding your money, the market has been taking a brutal beating the last couple of weeks. If you bought in recently, and your positions have gone down, then it might not be a bad time to sell and do some tax-loss harvesting. Essentially, selling an equity to claim a loss and then buying the same security or something similar after 30+ days to avoid wash sales. Check with your financial adviser or your investment strategy to see if this is a suitable route for you to take at this stage.

Now there’s been a lot of chatter through the grapevine that we’re all going to be getting checks of some sort from the government. Many versions of these drafts have stipulations that are going to be tacked to our tax returns of either 2018, 2019 or 2020. No bill is confirmed, but it seems tax returns may or may not be a factor on who get’s money, and how much. We’ll keep you posted as they happen.

That is what it is- But what about those of us that have businesses, we’re being hit hard and so are our employees! Anything we could do for them?

These are particularly tough times for business owners, and their employees. If you have employees on payroll, and want to support them some way but don’t quite know how with business shutdown, we might want to make use another rule that was added after our last national disaster on 9/11, the Sec. 139 Disaster Payments for employees. These are payments you could make to employees that are tax free for them, but tax deductible for the company. There are few limitations, for instance they can’t be payments you receive from an Insurance policy for your employees, but besides that, it’s a great way to help out in a time of need.

Speaking of helping out, businesses could all use some help in this current climate. The house is currently going back and forth on an aid package, but it seems like there’s a lot of pork and barrel being added to the legislation that could significantly alter the landscape for small businesses as a whole to survive.

If we’re in a state that’s declared a disaster or emergency, and have all non-essential businesses shutting down, then we should first see whether or not we qualify as one. Here’s a list of qualified essential businesses for the State of New York, check here to see if your business type is on the list. Note that if you only have 1 employee, then you might have some reprieve. Government agencies are trying to do the best they can to soften the blow to businesses in these tough times.

· NYC Assistance & Guidance for Businesses Impacted Due to Novel Coronavirus.

· SBA Economic Injury Disaster Loan Program For Select Disaster designated States.

Check back on here often, and we'll be sure to keep everyone updated with what they can do. Hope everyone stays safe out there!

Best,

-Haziq Inayat

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