By Debbie Gregory.

The year 2020 has been a very shaky on numerous levels.   Many small businesses have been negatively impacted by the COVID-19 pandemic. There are some that have continued to operate profitably and even experience growth with the help of government loans, tax credits, and payroll deferrals.

All have seen drastic changes to their income, workforce, supply chains, and customers. As we head into the holiday season and New Year it is time to focus on what your potential tax liabilities for 2020 will be. What are the questions you should discuss with your accountant or tax professional to plan appropriately and not be surprised?

Below are five tax related issues that immediately come to mind that you will want to discuss:

1.) Will the government stimulus check impact my taxes?

The answer is both yes and no.  It depends on the programs and assistance you may have taken or not taken.  Below are three of the most popular COVID assistance programs and if they will help or harm your taxes for 2020:

• If you participated in the Paycheck Protection Program (PPP) you will not be taxed on any loans you took under that program. However, any expenses incurred that are eligible for forgiveness are not tax deductible that may create a tax liability for you.
• If you paid any employees for time off under the Families First Coronavirus Relief Act, you will be entitled to a tax credit once this year ends.
• If you deferred payroll taxes, you will still owe them; you simply delayed when you needed to pay them.

2.) How does working from home impact taxes?

You and your employees who are working from home may be able to deduct expenses incurred from running an office out of your homes.  Some of the expenses may include such items as the space you used, equipment, utilities, etc. However, if your employees are working from home out-of-state you may be liable for higher payroll taxes than your home state charges. It really depends on the makeup of your company and employees if you may be facing any potential tax liabilities or benefits.

3.) Should I be saving more for my retirement?

Most of the current workforce working from home has seen a dramatic decrease in the amount of money they spend on food, going out to restaurants, entertainment and other consumer goods that may translate into building greater savings.   Now is a very good time to put those savings away for the future. Consider contributing more to your 401(k) or IRA accounts.

4.) Is now a good time to invest in capital equipment?

Right now, there are a lot of outstanding deals out there and interest rates are very low too. Lots of businesses are taking advantage of that fact and are buying needed equipment, furniture, technology, and other capital items at steep discounts. A lot of these purchases are deductible and can equal huge tax savings.

5.) Can I estimate my 2020 taxes based on last year?

Candidly, 2020 has been so chaotic and unprecedented that your estimation based on the prior year should be tossed out the window! You may have made way less this year than anticipated, or way more, and your actual tax implication may not even properly reflect the reality of your income. Take a close look at how your business did this year overall to make a better estimation of what your taxes may be.

Taxes are an unavoidable and annual huge expense for all of us. This year taxes are going to be more confusing and difficult than ever before. The earlier you can get together with your accountant or tax professional to go over what your potential tax liability will be, the better it will be, and you can prepare accordingly.   These are questions that you need to address with your account or tax professional.

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By James Pruitt, Senior Staff Writer

Just when we thought we were “over the hump,” coronavirus cases spiked. Many brick-and-mortar stores took fatal blows trailing the last wave of shutdowns. Hopefully, the lessons from the first wave may cushion the impact of the next.

The necessary steps include education about the necessary measures to protect customers and staff, and to balance this information with the needs of your business. Then business owners can plan the necessary steps for reopening in a safe manner.

Always ensure that information sources are reliable. Some of the best sources for information include the CDC:

• at cdc.gov, Guidelines for Opening Up America Again, https://www.whitehouse.gov/wp-content/uploads/2020/04/Guidelines-for-Opening-Up-America-Again.pdf.
• gov, OSHA, www.osha.gov, and the World Health Organization, which has a coronavirus information site at: https://www.who.int/emergencies/diseases/novel-coronavirus-2019?gclid=CjwKCAiAzNj9BRBDEiwAPsL0d__FIHt2u10uM-dKWoXQl4IBp3X91iqydExOfZ9XS0g9XCYolOYN7RoCgKcQAvD_BwE

Misinformation abounds about coronavirus, and the importance of accurate information about this crisis cannot be overstated.

We can expect another spike in coronavirus cases over the winter. Brick-and-mortar businesses will face a larger impact than online businesses. Brick-and-mortar stores should consider the following:

• the ability to enforce proper social distancing
• any lockdown orders that may exist within that locality
• the severity of the pandemic within your locality
• the level of contact with customers.

Examples of businesses facing the worst impact include gyms, restaurants, and beauty establishments.

Depending on the structure of the business, human resources issues may prove tricky. For example, last spring, a business had to shut down for two weeks because an employee called in to lie about having coronavirus: https://www.thestate.com/news/coronavirus/article241351951.html.

The company’s facility needed a thorough cleaning, that led to huge financial losses in the meantime. Other, more small-scale companies may have the flexibility to deal with such issues on a case-by-case basis, given the management’s closer relationship with the employee. The ABA (American Bar Association) notes the importance of input from both employees and clients. They also note that each reopening plan will be different, given the circumstances of the company. For example, some businesses may require brief health screenings by qualified health professionals, such as quick temperature checks.

The ABA notes that “[r]eopening a business during the pandemic is essential and inevitable but it will certainly be a daunting process that will require consideration of how workers can be brought on safely, how customer concerns will be addressed, and how everything can be done in a way that allows the company to survive financially.”

https://www.americanbar.org/groups/business_law/publications/blt/2020/10/protecting-workers/.

On the plus side, news is positive about defeating the pandemic in the next several months. Recently, several companies and institutions have developed several vaccines with amazing success rates. On the negative side, winter promises to bring a spike in cases before return to a semblance of normal. Dr. Anthony Fauci estimates a rollback of coronavirus measures sometime in April:

https://www.deseret.com/u-s-world/2020/11/13/21562555/coronavirus-dr-anthony-fauci-covid-19-vaccine.

In the meantime, small businesses can use this next spike as an opportunity to expand their horizons, build their online presence, and augment their human resources expertise. This pandemic will not last forever, and resources abound for struggling business owners, despite its devastating impact. Such a crisis arises once in a blue moon. Hopefully we will be able to strike a balance.

By Debbie Gregory.

Acts of kindness are therapeutic and will make you feel good and empower you.   Your acts of kindness will also inspire others to be kind.   We are learning that what we do impacts others and we are all in this together.  Kindness has an amazing domino effect that is so positive and will impact our small business.   VAMBOA, the Veterans and Military Business Owners Association h is providing a list of kind acts for small businesses to consider.

Some wonderful Acts of Kindness:

• Donating to Food Banks- donate some of the extra non-perishable foods in your pantry. If you are able make a monetary donation to fund meals.
• Donating meals to essential workers.
• Donating meals to students especially with schools being closed, it has been impacting many needy families that receive meals at schools for their children.
• Deliver meals – organizations that are preparing meals need help to deliver them to needy families.
• Donating Face Masks to hospitals and organizations
• Write notes and cards to elderly and shut ins to brighten their days.
• Donating Care, Food and Goodie Packages: Put together these packages for those in need in your community, elderly shut-ins, first responders, essential workers and military and veterans.
• Buy a bushel of apples, cases of water or drinks, boxes of packaged snacks, candies, gum, etc. and take them to your local fire or police station.
• Books and magazines are meant to be passed on and shared. Go through read magazines and books and donate them to homes for elderly with shut-ins to help them pass the time.
• Make handmade items that come from the heart. These can be knitted handmade items, greeting cards, paracord bracelets and special notes.
• Purchasing needed items such as sanitizer and cleaning items. These might be nice to send to your remote workers and those in need.
• Gift cards for those who are having hard times to markets and stores.
• Providing Free Advice to Impacted Businesses: Many small businesses are affected and hurting from the pandemic.  They need help and often do not know where to find it.  Volunteer to provide advice in areas of your expertise.   You may find that those with expertise you need will help you.   You might join forces with others and form a task force of sorts to offer free advice and consulting.
• Hosting Virtual Classes: Perhaps the expertise you possess is needed and can can best be presented and utilized in a virtual class.
• Create COVID Survival Guides for Small Businesses and to share and play forward what you have learned so others can benefit with Real time, actionable. advice and present it in zoom sessions.
• Teaching and/or tutoring others. With so many children and young people having to learn virtually, someone to help is a blessing.  Many parents are doing triple duty, parenting, teaching, and working so this can be a huge relief.
• Small Businesses “lending” staff to other small businesses providing a win/win for all.
• Patronizing local restaurants – ordering meals to go to help them stay in business.
• Tipping generously at restaurants or to the barista who prepares your latte to go.
• When you go to market or store, ask neighbors what you can get for them, especially your elderly neighbors and friends.
• Organize zooms or Facetime to spend time with those friends, family and neighbors who feel isolated and are able to simply click on a link.

These are such challenging times for all of us including small business owners.  Helping others can come back to you and is a wonderful way to feel like you are making a difference and to be positive.  We all need to work together for everyone.

By Debbie Gregory.

To overcome the economic impact of the COVID-19 pandemic, many small businesses are being forced to seek external funding through alternative funding sources, government grants, and loans from traditional banking institutions.

You may whether small businesses normally applied for loans or is this a new behavior in response to the pandemic?

Earlier this year, Small Biz Ahead surveyed small business owners across the country to learn exactly how the pandemic was affecting their use of both traditional and alternative funding. Here is what the survey found:

Starting a New Business:

Prior to the pandemic, most small business owners were hesitant to use external funding sources.

• Less than 1% used a federal or state grant to start their business.
• 60% of all small business owners used their own personal savings to start or run their businesses.

Running an Established Business:

• 85% of small businesses sought zero external funding in the last three years.
• 28% of small business owners use their personal credit cards to pay for business expenses.
• If the business did need money, they were more likely to seek out traditional funding sources as 41% stated they would go to their main bank first.
• 25% stated that they would simply use credit cards or existing funds.

Does age affect the business owner’s thoughts on external financing?

They found that younger generations tend to be more open to applying for financing or loans though they are still a bit hesitant. However, they do typically turn to friends and family for loans first. The study found that about a third of small business owners between the ages of 18-34 currently use friends and family as their main source to finance their business. This drops dramatically for generations older than 34, just over 10% of 35-44 year olds and less than 2% of 45-54 year olds stated that they seek out loans from friends or family.

What do small business owners look for when selecting a financial provider?

The small business owners surveyed:

• 38% stated that interest rates are the most important factor in choosing where to obtain funding.
• 38% stated that the terms and conditions were the most important factor.
• 34% prefer a financial provider who they know and have a relationship.

Does gender affect where the business owner will look for financing?

The study found that men (38%) are much more likely to view an existing relationships as the most important factor when selecting a financial provider, whereas women (41%) typically go out of their way to look for less expensive funding and lower interest rates.

How Does Age Impact Funding Choices?

There was also a clear divide between the age groups:

• The 18-34 age group favored institutions that offered easy applications,
• The 35-64 age group favored institutions with less expensive loans and more competitive rates
• The 65 and over age group favored institutions that they had a prior financial relationship.

What about alternative funding (such as crowdfunding or peer-to-peer)?

According to the study, alternative financing is not used very often by small business owners in the USA:

• 2% of small businesses have used equity financing.
• 4% have used P2P (peer-to-peer) lending.

However, this is changing. Many small business owners (42%) stated that they were open to the possibility of using alternative financing in the future should the need arise. The 18-34 age group were the most comfortable with alternative financing options:

• More than 10% stated that they have used P2P lending.
• A bit over 5% stated that they have used crowdfunding.
• All in this group stated that they would consider using alternatives to traditional finance in the future.

VAMBOA, the Veterans and Military Small Business Owners Association wants to learn your opinions on financing and small business funding.  Have you needed to turn to external financing to survive the pandemic?   Please let us know by emailing us:

info@vamboa.org

If you are not yet a member of VAMBOA, we invite you to join.  There are not any fees or dues and you may use our seal on your collateral and website.   Below is a link to register to become a VAMBOA member:

https://vamboa.org/member-registration

By Debbie Gregory.

The federal Small Business Agency known as the SBA has a few new ways to help small businesses stay in business while we all navigate the COVID crisis. Thanks to H.R. 748 the SBA has been able to expand their loan programs with new offerings for small businesses as well as some specific options for large corporations.

What Other Assistance does H.R. 748 Provide?

The program also provides $17 billion dollars to small businesses that have existing SBA loans. These funds can be used to pay six months of principal and interest payments on existing SBA loans.

1.) Additionally, the program provides $10 billion dollars for disaster loans and emergency grants. Each of these types of loans are limited to $10,000 per small business. These types of loans are quite like the Paycheck Protection Program or PPP described in part one of this mini article series.  They can be used for other operational expenses beyond payroll, mortgage or rent, and utilities.   In theory, any small business that applies for an economic injury disaster loan receives an advance, within 3 days, of $10,000 regardless of whether they eventually are approved for the loan. This $10,000 advance does not need to be repaid either. The loan itself can be for up to $2 million dollars at a low interest rate (currently it is 3.75% for small businesses and 2.75% for nonprofit organizations). Repayment terms vary. You can apply for this loan directly from the SBA here> https://covid19relief.sba.gov/.

2.) The program also provides $265 Million dollars for SBA business development services. The SBA offers Small Business Development Centers (SBDCs) that provide no-cost services for small businesses and entrepreneurs that will assist in critical business areas such as:

• Consulting
• Mentoring
• Training services
• Business development services
• and much more

What Other Financial Assistance Programs Have Been Added for Businesses that Do Not Qualify for Other SBA Programs?  

The COVID-19 pandemic is having severe economic consequences all over the United States. Many larger businesses are ineligible for SBA programs. However, the goal of H.R. 748 is to assist large employers as well. Some of the additions that can help larger companies include:

1.) H.R. 748 states that the Federal Reserve can now make loans, as well as loan guarantees, to businesses not covered by other programs.  They can also now make loans to state and local governments. Unlike the SBA programs for small businesses, the Fed cannot forgive these loans and borrowers must repay them.

2.) H.R. 748 also provides the federal -19 pandemic. The funds are as follows:

• $25 billion for loans to passenger air carriers
• $4 billion for loans to cargo air carriers
• $17 billion for loans to businesses critical to maintaining national security
• $32 billion for additional financial assistance to air carriers and related employers (such as caterers and airport contractors)

Small Business or Large Corporation – if you need help to keep your business afloat while the COVID-19 pandemic continues to rage across the United States, then check out what is available to you from the SBA and H.R. 748.   We advise that patience is in order.

If you are not yet a member of VAMBOA, the Veterans and Military Business Owners Association, we invite you to join.  Please be advised that there are not any dues or fees and you can use our seal on your collateral and website.   You may register for membership here:   https://vamboa.org/member-registration/ ‘’

Everyone stay safe and healthy!