As a result of the AMERICAN RESCUE PLAN ACT (a COVID related relief bill passed in March of 2021), these popular payment apps must report all transactions from accounts with over $600 commercial transactions in a year to the Internal Revenue Service (“IRS”). However, despite other sources claiming that the IRS is taxing these transactions, the reporting requirement simply provides the IRS with information that can be used to enforce existing rules (i.e., the requirement that taxpayers provide 1099s to individuals or businesses where the taxpayer paid over $600 in the taxable year).
In response to this new requirement, taxpayers should take care to correctly tag transactions, if possible, in their payment app. This is especially important when dealing with personal transactions on these platforms, as failure to do so could cause the transactions to be reported to the IRS as business related transactions.
While the impact of the new reporting will be minimal, it is causing disproportional concern to taxpayers because of inaccurate or misleading articles on the internet.
If you have any questions or concerns about this or any other legal or tax related issue, contact WEGNER LAW PLLC today at (239) 449-9200 or by email at email@example.com.
P. Christopher Wegner, Managing Attorney, Wegner Law PLLC, advised owners of a property management company on how best to sell their business to a publicly traded acquirer. This advice not only ensured that the clients received the most value from the sale of their business but also helped the clients significantly reduce their tax liabilities from the sale.
Mr. Wegner handles business sales and acquisitions for businesses of all sizes and in a variety of different fields. Whether advising in a $150 million purchase by a publicly traded agricultural concern or a $150,000 sale of an accounting practice, Mr. Wegner brings years of experience in law and in real world business to every deal. This combination of expertise and experience allows Mr. Wegner to deliver the best possible value to clients in any transaction.
For more information or to learn what Wegner Law PLLC can do for you, contact Mr. Wegner at (239) 449-9200.
Congress recently passed a new relief package to deal with the CORONA virus pandemic. This new bill includes a variety of programs for small and mid-sized businesses, including a revised version of the popular Payroll Protection Program (commonly known as “PPP”) from the original aide package in early 2020. The new version of the PPP is far more thorough and complex but we are ready to help you and your business apply for this relief.
Lawmakers in Washington D.C. reach deal to provide additional funds to the popular Payroll Protection Program (better known as “PPP”) after the program ran out of initial funding late last week. While there is a possibility of changes to any part of the program, businesses hoping to receive the forgivable loans should work with their bank to file an application ASAP.
Contact P. Christopher Wegner, Managing Attorney, Wegner Law PLLC, at 239.449.9200 or firstname.lastname@example.org for more information.
Three separate pieces of legislation went to effect over the past few weeks to offer a variety of assistance to businesses. Here’s a breakdown of what’s in those packages and how your business can take advantage of these relief efforts.
Coronavirus Preparedness & Response Supplemental Appropriations Act
The Coronavirus Preparedness and Response Supplemental Appropriations Act provides $8.3 billion in emergency funding for federal agencies to respond to the coronavirus outbreak and enabling the U.S. Small Business Administration to offer $7 billion in disaster assistance loans to small businesses.
What does it mean for small business?
• The SBA is offering designated states and territories low-interest federal disaster loans to small businesses suffering substantial economic harm as a result of the coronavirus.
• These loans may be used by small businesses to pay fixed debts, payroll, accounts payable and additional bills that can’t be paid because of COVID-19’s impact. The interest rate is 3.75% for small businesses without other available means of credit. The interest rate for non-profits is 2.75%. Businesses with credit available elsewhere are not eligible.
• The SBA loans come with long-term repayments, up to a maximum of 30 years, to keep payments affordable. Loan terms are determined on a case-by-case basis, according to individual borrower’s ability to repay.
• The SBA has amended its disaster loan criteria to help borrowers still paying back SBA loans from previous disasters. By making this change, deferments through December 31, 2020, will be automatic. Hence, borrowers of home and business disaster loans do not have to contact SBA to request deferment.
Families First Coronavirus Response Act
Signed into law on March 18, the Families First Coronavirus Response Act (FFCRA or Act) contains eight divisions designed to provide assistance to covered employees and households with eligible children affected by COVID-19. Key components of the Act include:
• Mandatory emergency paid sick leave for covered employees who, as a result of COVID-19, are quarantined, symptomatic or caring for a symptomatic individual, or caring for a child whose school has been closed.
• An expansion of unemployment benefits.
• Modifications to the USDA nutrition and food assistance programs.
• New requirements for coronavirus diagnostic testing.
• A temporary increase in the Medicaid federal medical assistance percentage (FMAP).
What does it mean for small business?
• Paid sick and family leave. The law requires all private businesses with fewer than 500 employees to provide emergency paid sick or family leave for employees affected by the coronavirus outbreak.
• Employer tax credits. The law provides employers with fewer than 500 employees with refundable payroll tax credits to cover the cost of providing the paid sick leave and the paid FMLA leave to their employees. Specifically, the law states that:
Employers will receive 100% tax credit against their payroll tax liability up to the capped amount of benefits they must pay.
Health insurance costs are also included in the credit.
Self-employed individuals receive an equivalent credit.
If an employer is owed more than the capped amount and a refund is owed, the IRS will send the refund as quickly as possible.
Reimbursement is promised to be quick and easy to obtain.
Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
The CARES Act has many components to help small businesses survive the coronavirus outbreak. Key components of the CARES Act include a loan program from the SBA, changes to unemployment benefits and changes to business tax filing requirements.
The legislation includes:
• Small Business Paycheck Protection Program: A new lending program that allows businesses to borrow enough to cover monthly payroll costs for businesses for up to 2.5 months. If used for payroll, mortgage interest or other qualified expenses, these loans will be forgiven as long as the employer continues to employ its workers or rehires them when they reopen for business.
• Business tax provisions: Employers can defer payment of the employer share payroll taxes.
• Payments for individuals: It is anticipated those who make less than $75,000 a year will receive direct payments of $1,200 per individual ($2,400 joint return) plus $500 per child. This will phase out for incomes above $75,000 ($150,000 joint filings).
• Unemployment assistance: If your business is closed because of coronavirus and your employees cannot work from home, or your employees are unable to work due to illness or the need to take care of someone who is ill with the virus, they can collect unemployment.
For additional information or help applying for any of the programs, contact P. Christopher Wegner at 239.449.9200 or by email at email@example.com.
On Monday, March 17, 2020, the State of Florida announced the availability of zero interest short term bridge loans for Florida small businesses impacted by the Coronavirus. These loans are generally available to any qualifying business regardless of current revenue or other similar concerns..
Qualifying businesses are simply any business in the State of Florida, established before March 9, 2020, with between 2 and 100 employees (with exceptions for businesses engaged in gambling, illegal activity, massage or escort type services).
The loans will typically be for $50,000 or less (though loans for more will be approved on a case by case basis) and have a zero percent interest for the first year (increasing to twelve percent per annum after the first year).
This means that a vast majority of small to medium sized business will be able to easily (and quickly) take advantage of this program by applying before May 8, 2020.
If you or your business need help determining if you qualify for this program or applying, please do not hesitate to contact us at 239.449.9200 today.
Another consequence of congress’s decision to rush the Tax Cut and Jobs Act of 2017 is the large number of ‘typos’ and errors in the actual statutory text. Normally, congress would pass a technical corrections bill in the aftermath of such a large piece of legislation but the political climate in the nations capital is making that much more difficult than normal. As a result, we are still finding and addressing many ‘glitches’ in the nearly two-year piece of legislation.
The must recent glitch concerns the retail sector and prevents the 100% first year expensing intended by the congress on certain property common in the restaurant and retail industries. While the IRS could have minimized the problem with new rules, the Service decided against addressing this issue effectively sending it back to congress for correction.
In the interim, taxpayers may be denied a popular tax incentive unless congress can pass corrections before taxes are due next year.
As the southwest Florida area begins preparing for “season,” I would like to take this time to remind anyone starting a new business that single member limited liability companies do not provide their member with any protection from liability. While most states do not make a distinction between single and multi-member LLC’s for purposes of liability, the Florida Supreme Court held in a case out of Miami that corporate creditors can “pierce the veil” of a single member limited liability company and collect from the member.
That said, there are a number of ways to insure that you do receive the liability protection you desire–most of which, do not raise the cost of formation–when forming a new LLC or business. From adding another member to organizing under the laws of a different jurisdiction, we can help you obtain the asset protection and piece of mind that you desire.
To learn more, visit the Wegner Law PLLC website at wegnerlawfirm.com or contact us today (phone: 239 449 9200 or email firstname.lastname@example.org)