In response to the COVID-19 crises, the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act gives business owners and individual taxpayers some relief from the sudden shock of a stalled economy. In addition to understanding resources available to you and your company, working with a tax attorney now may improve the resilience of your asset portfolio later.
We discussed earlier the stimulus checks and tax return postponement offered by the government to ease the financial shock and downturn caused by the COVID-19 pandemic. With financial markets careening up and down, predictions of rapid recession, and the daily dull drumbeat of death tolls, taxpayers are justifiably concerned—and panicked—by the challenge.
With the rapid deployment of legislation and action on the part of the Federal Reserve, it is difficult to know what aid is available in the long and short term and how that impacts your individual wealth profile. In addition, the global economy was cooling prior to the pandemic, what are the best tax tools and strategies for riding out this unprecedented moment in human—and financial—history?
Not just hype, now is a good time to check in with your tax lawyer for a critical evaluation of your tax status, liabilities, offshore tax interests, corporate concerns, and potential wealth safety nets. On the corporate front, you should be familiar with quickly upcoming tax benefits that include:
- Paycheck Protection Program (PPP): In place primarily for independent contractors and small business owners, the PPP provides forgivable loans for some payroll expenses incurred between February and June 2020. Be aware that while the loan is forgivable, interest may not be.
- Payroll tax issues: The CARES Act contains relief on employer payroll taxes. While business managers and owners must still submit the employee portion of their employment tax obligation, they may defer paying the employer portion—with half the deferred amount due by December 2021, and the remaining by December 2022.
Improving liquidity and deferring tax payments are just two of many initiatives to provide rapid relief to business owners, employees, and consumers during this public health emergency.
The instability borne of this pandemic will be long term. While a degree of normalcy will return, the economy, business, and life in the everyday will forever after bear witness to the need for operational readiness, continuity planning, and a vigilant flexibility in caring for individual wealth.
Speak with an experienced tax attorney concerning best practices in uncertain times. Panic is not called for--preparedness is.
Speak with skilled tax lawyers in Cleveland or Chicago
At Robert J. Fedor, Esq., LLC we provide confidential, strategic legal solutions to persons and corporations interested in fine-tuning tax strategies or if notified of an IRS audit or other tax controversy. With offices in Chicago and Cleveland, we serve clients and companies domestically and around the world. Contact us or call 800-579-0997 today.