Categories for

Economists are predicting that 58 percent of unemployed workers who were laid off as a result of COVID-19 lockdowns are likely to return to their old jobs, according to the Brookings Institution. But with the majority of laid-off workers facing an uncertain employment future, the question remains: How will workers and employers transition into a post-coronavirus world of work?

The Committee for Economic Development (CED) explains that employers are a major source of ongoing training for employees. With events like the COVID-19 pandemic, laid-off workers have been dislocated from an upward career path.

According to the CED and the Bureau of Labor Statistics, during June 2020, approximately one-third of unemployment insurance went to the self-employed—individuals who do not benefit from employer-based training. This presents a challenge for those workers, who might require more training in order to enter the market as an employee.

One potential scenario for these pandemic-dislocated workers, according to the CED, is through “publicly supported training in a time of crisis.” The recommendation, especially for individuals on the bottom earning tiers, is for increased public investments in community colleges. Providing virtual training could help these individuals learn new skills and become employable again. Be it a community college or similar, the CED explains that it could be subsidized by either a modified Pell Grant or direct payments to the individual who is taking classes to become a member of the workforce again.

As the course of the pandemic is uncertain, only time will tell how these newly created job problems will be addressed.

Sources

https://www.brookings.edu/research/turning-covid-19s-mass-layoffs-into-opportunities-for-quality-jobs/

https://www.ced.org/2020-solutions-briefs/meeting-the-upskilling-challenge-training-in-the-time-of-covid-19

When Congress initially authorized the Paycheck Protection Program, its intent was to provide loans that would be partially or completely forgiven if used for the intended purposes of helping businesses affected by COVID-19 stay afloat and to help those businesses maintain payroll. As part of the Small Business Administration’s (SBA’s) loan application, Form 2483 or lender’s equivalent form, borrowers had to certify under penalty of imprisonment and monetary penalties to the following:

• Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.
• The funds will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule; I understand that if the funds are knowingly used for unauthorized purposes, the federal government may hold me legally liable, such as for charges of fraud.

Needless to say, the contemplation of free money had businesses scrambling to take out PPP loans, whether they were impacted by economic effects of COVID-19 or not.

The secretary of the treasury had initially indicated the need for all PPP loans to be audited, but later specified only those of $2 million or more would be subject to audit.

After a long wait, and as long anticipated, the SBA has initiated a compliance program to evaluate the good-faith certifications that borrowers made on their PPP Borrower Applications stating that economic uncertainty made the loan requests necessary. Accordingly, each borrower that, together with its affiliates, received PPP loans with an original principal amount of $2 million or greater will be required to participate in this compliance program, and will soon be receiving one of the following multi-page forms from their lender:

• Form 3509, for For-Profit Borrowers, or
• Form 3510, for Non-Profit Borrowers.

Sometimes referred to as a “loan necessity questionnaire,” the form and requested supporting documents must be submitted to the lender servicing the borrower’s PPP loan. The completed form is due to the lender within ten business days of receipt. Among other things, the forms request:

• Whether the borrower’s business was shut down as a result of a government order.
• Whether any of the business’s owners were compensated in excess of $250,000.
• The borrower’s liquidity before and after receipt of the loan funds and during the covered period.
• The business’s gross revenue amounts for 2019 and 2020.

The SBA says it is reviewing these loans to maximize program integrity and protect taxpayer resources. The information collected will be used to inform SBA’s review of each borrower’s good-faith certification that economic uncertainty made their loan request necessary to support ongoing operations. Receipt of this form does not mean that SBA is challenging that certification. After this form is submitted, SBA may request additional information, if necessary, to complete the review. The SBA’s determination will be based on the totality of the borrower’s circumstances.

Failure to complete the form and provide the required supporting documents may result in SBA’s determination that the borrower is ineligible for either the PPP loan, the PPP loan amount, or any forgiveness amount claimed, and SBA may seek repayment of the loan or pursue other available remedies.

If you have any questions related to this issue or need assistance completing the form and assembling supporting documentation, please give our office a call.

If you are a small business owner, every penny of your income counts. This means that you not only want to optimize your revenue, but also minimize your expenses and your tax liability. Unfortunately, far too many entrepreneurs are not well-versed on the tricks and tools available to them and end up paying far more than they need to. You don’t need an accounting degree to take advantage of tax-cutting tips. Here are a few of our favorites.

THINK ABOUT CHANGING TO A DIFFERENT TYPE OF TAX STRUCTURE

When you started your business, one of the first decisions you needed to make was whether you wanted to operate as a sole proprietor, partnership, LLC, S corporation or C corporation. But as more time goes by, the initial reasons for structuring your business the way that you did may no longer be applicable, or in your best interest from a tax perspective. There is no requirement that you stick with the business structure you initially chose.

Ever since the Tax Cuts and Jobs Act of 2017 (TCJA) changed the highest corporate income tax rate from 35% to 21%, sole proprietorships, LLCs, partnerships and S corporations can realize significant tax savings by electing to be taxed as a C corporation. This simple change can make sense if the owner of these pass-through businesses is taxed at a high tax bracket. If so, all you need to do is fill out and file Form 8832. Before doing so, make sure that the tax savings you can realize are a reasonable tradeoff for the other reasons that you may have originally selected the structure you are currently in.

PASS THROUGH BUSINESSES CAN GET A 20% TAX BREAK

One of the most impactful changes that the TCJA made for pass-through businesses whose income is passed through for taxation as their owners’ personal income is a valuable tax break known as the qualified business income (QBI) deduction. For those that are eligible, this deduction is worth a maximum 20% tax break on the income they receive from the business – but determining whether or not you are eligible can be a challenge.

There are several restrictions on taking advantage of the deduction, particularly with reference to specified service trade or businesses (SSTBs) whose owners either earn too much income or rely specifically on their employees’ or owners’ reputation or skill. Though architecture and engineering firms escape this limitation, other business models – including medical practices, law firms, professional athletes and performing artists, financial advisors, investment managers, consulting firms and accountants – fall into the category that lose out on the deduction if their income is too high. In 2019 single business owners of SSTBs began phasing out at $160,700 and are excluded once their income exceeds $210,700, while those who are married filing a joint return phase out at $321,400 and are excluded at $421,400. To calculate the deduction, use Part II of Form 8995-A.

Businesses that are not SSTBs are eligible to take the deduction even when they pass the upper limits of the thresholds, but only for either half of the business owners’ share of the W-2 wages paid by the business or a quarter of those wages plus 2.5% of their share of qualified property.

These limitations and specifications for what type of business is and is not eligible are head-spinning, and though it is tempting to simply take the deduction, it’s a good idea to confirm whether you qualify and how to claim it with our office before moving forward.

KNOW HOW YOU’RE GOING TO PAY YOUR TAXES

It is incredibly rewarding to live the dream of owning your own small business, but the hard work required to generate revenue makes paying taxes extra painful. This is especially true because of the “pay as you go” tax system that the United States uses, which asks business owners to make quarterly estimated payments. While employees pay their taxes ahead via payroll deductions withheld by their employers, there is no such automatic system set up for small business owners, and that leaves many with the temptation of delaying making payments in order to maintain liquidity.

Unfortunately, failing to pay taxes quarterly can put you in the uncomfortable position of still having to pay at one point, with the additional burden of penalties and interest as a result of your delay. Though setting aside the money to pay taxes requires discipline, doing so will save you from the penalties charged by the IRS, which are calculated based on the amount you should have paid each quarter multiplied by both your shortfall and the effective interest rate during the specific quarter (established as 3 percent over the federal short-term rate – C corporations pay a different rate). Even if you don’t calculate your quarterly estimated rates correctly, the safe harbor rule allows small businesses to pay the lower amount of either 90% of the tax due on your current year return or 100% of the tax shown on your last filed tax return. For those whose AGI was over $150,000 in the previous tax year, the safe harbor percentage is 110% of the previous year’s taxes.

While it is always a good idea to increase the amount you send in if you are having a higher-income year, by doing a simple calculation of your safe harbor number and dividing it by four, you have a reasonable quarterly payment that you can safely send in on the due dates (April 15th, June 15th, September 15th and January 15th of the following year). By setting aside the appropriate percentage that you will owe from each payment you receive, you can easily set aside the money you will need to pay and entirely avoid concerns about penalties or interest. Payment is most easily submitted using the online link for IRS Direct Pay, though many people opt for sending in the paper vouchers for IRS Form 1040-ES, along with a check. There is also an EFTPS system available for C Corporations’ use.

CHOOSE YOUR ACCOUNTING METHOD CAREFULLY

Each small business owner calculates their income and revenue differently, with many using a method of accounting that is based on when money is received rather than when an order is placed and counts expenses when they are paid rather than the item or service ordered. This is known as the cash method of accounting.

Whatever method of accounting you use, smart business owners can strategically adjust their approach, reporting their annual income based on cash receipts in order to reduce their end-of-year revenues, especially if there is reason to believe that next year’s income will be lower or, for some other reason, they anticipate being in a lower tax bracket.

An example of how this approach would be helpful can be seen in the case of a business that expects to add new employees in the new year. Between that expense and other improvements planned, it makes sense to anticipate that net income will be down and the tax bracket for the business will be lower, so any work done or orders placed towards the end of the current tax year should be accounted for when payments arrive so that the income can be taxed at a lower rate. The contrast to this is if you are anticipating your business revenue increasing and being forced into a higher tax bracket in the new year: in that case it makes sense to try to collect monies for work done in the current year early, so that you can take advantage of your current, lower tax rate. The same can be done for business expenses such as office supplies and equipment, which can be deferred and accelerated in the same way so that you can take advantage of tax deductions in the way that is most advantageous.

ESTABLISH AND MAKE DEPOSITS INTO A 401K OR SEP

One of the smartest ways to lower your taxable income is to contribute to a retirement account. Not only does doing so lower your business’ tax liability, but also ensures a more secure future. As a small business owner, either a 401(K) plan or a Simplified Employee Pension (SEP) plan will do the trick while benefiting both you and those who work for you in the future.

While a 401(k) that is established prior to year-end will let you deduct any contributions you make (with contributions limited to the lower of $57,000 or the employee’s total compensation), business owners who fail to set up this type of plan by December 31st can still turn to the SEP as an alternative. Though SEP contributions are restricted to 25% of the business owner’s net profit less the SEP contribution itself (technically 20%), a SEP can be established, and contributions made up until the extended due date of your return. If you obtain an extension for filing your tax return, you have until the end of that extension period to deposit the contribution, regardless of when you actually file the return.

IF YOU TOOK OUT A PPP LOAN, PLAN ON IT BEING FORGIVEN

Many small businesses took advantage of the PPP loans that were offered by the government in the face of the COVID-19 crisis. While these loans were attractive because they are forgivable and gave businesses a chance to survive the dire circumstances, in April of 2020 the IRS issued Notice 2020-32, which indicated that despite the fact that the forgivable loans can be excluded from gross income, the expenses associated with the moneys received cannot be deducted. This effectively erases the tax benefit initially offered because losing the employee and expense deduction increases the business’ income and profitability.

There is some chance that this issue will be resolved by Congress, as it clearly contradicts the original intent of the tax benefit that accompanied the PPP funds, but that action has not yet been taken. It’s a good idea to talk to our office about this as soon as possible, as having to pay taxes on expenses incurred may be particularly challenging in the face of the difficulties the pandemic has imposed. Being financially prepared to pay more taxes than you originally intended may be a bitter pill to swallow but will still be better than having to pay penalties and interest if you fail to pay what the government says that you owe.

Though all of these strategies can be helpful, they may not all be appropriate for your situation. Keep them in mind as you go into the end of the year and be prepared to ask questions to determine which apply to you when you speak with our office. Contact us to discuss tax planning for your business today.

On November 18, the Internal Revenue Service (IRS) released Revenue Ruling 2020-27 and Revenue Procedure 2020-51. The two releases offer clarification regarding the non-deductibility of expenses that contribute to the forgiveness of loans from the Paycheck Protection Program (PPP).  Author Sally Schreiber breaks down the contents and significance of the two releases in an article from the Journal of Accountancy.

Background

The Coronavirus Aid, Relief, and Economic Security (CARES) Act established the PPP program to support qualifying businesses through the coronavirus pandemic via forgivable loans. Loan recipients are permitted to use loan funds to cover a variety of expenses including payroll costs, payment of mortgage interest, rent, and utility payments. Section 1106(i) of the CARES Act excludes forgiven PPP loan amounts from gross income.

In a May 2020 follow-up notice, the IRS clarified that PPP loan recipients may not deduct expenses whose payments result in PPP loan forgiveness. This is an area not directly addressed by the CARES Act. The American Institute of Certified Public Accountants (AICPA) has voiced the opinion that the IRS clarification is counter to the intent of the CARES Act authors.

Revenue Ruling 2020-27

This ruling “addresses the issue of borrowers who pay expenses in 2020 but whose PPP loan is not forgiven until 2021.” It offers two scenarios to illustrate how the IRS expects loan recipients to handle PPP-eligible expenses, citing Sec. 265(a)(1). Both scenarios determine that the deduction of expenses is inappropriate. The tax bureau concludes that “the fact that the tax-exempt income may not have been accrued or received by the end of the taxable year does not change this result because the disallowance applies whether or not any amount of tax-exempt income in the form of covered loan forgiveness and to which the eligible expenses are allocable is received or accrued.”

Revenue Procedure 2020-51

This procedure “provides a safe harbor for PPP borrowers that have their loan forgiveness denied or who choose not to request loan forgiveness.” In the event that previously anticipated PPP loan forgiveness does not happen, this revenue procedure offers a path for taxpayers to retroactively deduct some or all of the expenses that they previously did not deduct because they expected to have their PPP loan forgiven. This procedure goes into effect with the 2020 tax year.

For further details, click here to read the article in full at the Journal of Accountancy.

With winter around the corner and the threat of seasonal viruses looming, a second wave of COVID-19 poses a real threat to our health and business operations, according to Johns Hopkins Medicine.

Statistics from the Centers for Disease Control and Prevention (CDC) reveal that the 2019-2020 flu season took 24,000 lives and sickened 39 million individuals. When we add the fact that there are children who might not be receiving vaccinations – be it for the measles, whooping cough, and others – due to COVID-19, the risk for infections multiply. Based on these factors, there is a real possibility of a second wave of COVID-19 and other seasonal illnesses impacting business operations for the worse.

As the State of Washington’s Department of Commerce explains, there are many steps that businesses can take to prepare for a second wave of the coronavirus. Here are a few recommendations that can be applied and modified, depending on the type of business:

The Washington State Department of Commerce recommends businesses use their digital presence –such as email, website, blog, or social media – to inform and connect with customers. There’s a balance that companies need to find between marketing and selling products or services and not sounding tone-deaf to the situation that COVID-19 has created.

For example, by creating a brief blog or social media post, companies can acknowledge that COVID-19 is a stressful time for everyone but communicate that the company will still be there for them. Explaining how they’re taking care of their employees (social distancing, letting employees work from home, and/or take time off for themselves or family members) and how they’re welcoming customers in-store or making house calls (with masks, social distancing, using technology when appropriate), it can create empathy and promote a sense of goodwill.

Another way to leverage digital communication channels is to create a standalone email address to funnel visitor and customer questions regarding COVID-19 concerns.

Planning on how to deal with food that won’t be used is an important step for organizations that deal with mass quantities of food. For schools, colleges, or universities that were open but have closed or others that want to make contingencies to close, the Environmental Protection Agency (EPA) recommends a few different avenues to make good use of food that would otherwise spoil. Organizations should make plans to donate to food banks or food rescue organizations; and there is also the EPA’s Excess Food Opportunities Map, which can direct unused food to compost options for businesses.

Another way for companies to prepare for a second wave of COVID-19, as the State of Washington’s Department of Commerce points out, is to ensure all documents are up-to-date and accessible via hard copy and electronically. Example documents include minutes and resolutions from official business meetings, tax records – especially any recently filed quarterly estimate payments – and lists of vendors. Companies also should ensure that digital files are encrypted, protected by passwords and that the cloud provider has a firewall, security scanning, and continually addresses vulnerabilities.

Business owners should have contingency plans to deal with supply chain issues. One way to mitigate supplier issues, according to McKinsey & Company, is to negotiate with existing suppliers that have cash or liquidity issues.

By offering essential suppliers with loans, often at attractive interest rates compared to lenders, as a way to keep suppliers in business, businesses may be able to negotiate for exclusive or high priority production agreements. This can be done while looking for alternate suppliers, either domestically or in other parts of the world.

While the second wave of COVID-19 is a real possibility, taking steps to prepare for any surge in cases will help companies increase their chances to make it out of the pandemic.

As bad as the economy is right now due to the COVID outbreak in the United States, many economists are predicting that the long-term outlook is much bleaker. Congress and the Federal Reserve’s efforts at stimulus and interest rate management have done much to keep the economy and stock market afloat; however, small businesses – the backbone of America’s employment growth – are closing every day. As consumer spending reduces further, the impact will likely affect Wall Street. Consequently, share prices may soon begin correcting to reflect the future more so than the present.

It should come as no surprise, then, that 88 percent of respondents admit they are worried about their finances, according to a recent survey conducted by the National Endowment for Financial Education.

This economic decline has presented an interesting mix of demographics who have been or will be affected the most over the long term. For instance, many low-income workers have remained employed throughout the pandemic because their jobs are considered “essential services.” This includes check-out clerks at grocery stores, laborers who work outdoor jobs, nurses, orderlies, and nursing home attendants.

By contrast, many white-collar business owners – such as physicians and dentists– closed shop for a few months and/or have reduced the number of patients they see. Alas, 79 percent of those surveyed with a household income of more than $100,000 a year said they were at least somewhat concerned about their financial situation.

Millennials are the generation most likely to change the way they manage their finances in the future. Although many have remained employed in white-collar jobs – primarily due to their technology-enhanced skills and knowledge – they have reason to be concerned. After all, this generation has already lived through the market downturn following 9/11, the Great Recession, and now a historic economic decline caused by the coronavirus. After finally gaining a foothold in their careers, this recent downturn obliterated the last five years’ worth of economic growth. Going forward, finance experts predict that these young adults will be more focused on stock-piling savings, buying modest homes when the real estate market corrects, and generally working on a long-term plan for financial stability.

While those strategies are mostly good, it’s a shame this generation had to learn the hard way – all while encumbered with historically unprecedented student loan debt. However, as these lessons are passed down through generations – much the way the Great Depression had a lasting impact on the Silent Generation – U.S. populations may see higher savings rates at the expense of lower GDP growth.

For households recovering from financial stress or looking to create a plan for stronger financial resiliency no matter what the future holds, consider the following strategies:

• First priority: Save from three to six months’ worth of liquid, emergency funds should you encounter a large expense, such as an auto repair or a temporary loss of income.

• Learn how to budget effectively, which includes examining if you overpay for basic household needs or do not know how much of your income is spent superfluously every month.

• Take stock of the full scope of your financial resources, including:
  • Savings accounts
  • Investment accounts
  • Retirement accounts
  • Health savings accounts
  • College savings accounts
  • Whole life insurance
  • Real property
  • Structured settlements
  • Vehicles (auto, boat, motorcycle, recreational)
  • Art, jewelry, wine, or other high-value collectibles
  • Expensive furnishings and household items
• Develop a Plan B to help supplement any income loss right now, a Plan C to help bolster your savings rate once you’re back to full income, and a Plan D strategy for income replacement in case you’re ever in a situation like this again.

Financial setbacks will come and go; it’s the lessons we learn from them that should have the most staying power.

If you already have a budget, it’s probably been difficult for you to stick with it for the last several months. Unless you provide products and/or services that have been in great demand since the COVID-19 pandemic took hold, you’ve had to adjust your budget significantly.

Better days are ahead, though, and now is a good time to start doing some planning for 2021. While there are still likely to be uncertainties next year, creating a budget will give you a starting point. A budget increases your awareness of all of your projected income and expenses, which may make it less likely that you’ll find yourself constantly running short on funds.

Here are some ways you can make your budgeting process more effective and realistic.

Use what you already know. Unless you’re starting a brand-new business, you already have the best resource possible: a record of your past income and expenses. Use this as the basis for your projections.

Be aware of your sales cycle. Even if you’re not a seasonal business, you’ve probably learned that some months or quarters are better than others. Budget conservatively for the slower months.

Distinguish between essential and non-essential expenses. Enter your budget items for the bills and other expenses that must be covered before you add optional categories.

You can use data from a previous year to create a new budget in QuickBooks Online.

Keep it simple. Don’t budget down to the last paper clip. You risk budget burnout, and your reports will be unwieldy.

Build in some backup funding. Just as you’re supposed to have an emergency fund in your personal life, try to create one for your business.

Make your employees part of the process. You shouldn’t be secretive about the expense element of your budget. Try to get input from staff in areas where they have knowledge.

Overestimate your expenses, a little. This can help prevent “borrowing” from one budget category to make up for a shortfall in another.

Consider using excess funds to pay down debt. Debt costs you money. The sooner you pay it off, the sooner you can use those payments for some non-essential items.

Look for areas where you can change vendors. As you’re creating your budget think carefully about each supplier of products and services. Can you find less costly alternatives?

Revisit your budget frequently. You should evaluate your progress at least once a month. In fact, you could even start by budgeting for only a couple of months at a time. You’ll learn a lot about your spending and sales patterns that you can use for future periods.

How QuickBooks Online Can Help

QuickBooks Online offers built-in tools to help you create a budget. Click the gear icon in the upper right corner and select Budgeting under Tools. Click Add budget. At the top of the screen, give your budget a Name and select the Fiscal Year it should cover from the drop-down list by that field. Choose an Interval (monthly, quarterly, or yearly) and indicate whether you want to Pre-fill data from an existing year.

QuickBooks Online supplies a budget template that already contains commonly used small business items.

The final field is labeled Subdivide by, which is optional. You can set up budgets that only include selected Customers or Classes, for example. Select the desired divider in that field, then choose who or what you want included in the next. Click Next or Create Budget in the lower right corner (depending on whether you used pre-filled data) to open your budget template. If you subdivided the budget, you’ll see a field marked View budget for. Click the down arrow and select from the options listed there.

To create your budget, you simply enter numbers in the small boxes supplied. Columns are divided by months or quarters, depending on what you specified, and rows are labeled with budget items (Advertising, Gross Receipts, Legal & Professional Fees, etc.). You simply enter numbers in the boxes that apply. When you click in a box, a small arrow appears pointing right. Click on this, and your number will automatically appear in the rest of that row’s boxes. When you’re done, click Save in the lower right. You can edit your budget at any time.

QuickBooks Online provides two related reports. Budget Overview displays all of the data in your budget(s). Budget vs. Actuals shows you how you’re adhering to your budget.

We know creating a budget can be challenging, but it’s so important – especially right now. We’d be happy to look at your company’s financial situation and see how QuickBooks’ budgeting tools—and its other accounting features—can help you get a better understanding of your finances.

It’s safe to say that there are a lot of people worried about an impending global recession thanks to the economic slowdown that the ongoing COVID-19 pandemic has brought with it – and your average entrepreneur and startup founder is chief among them. Obviously, it makes sense to assume that with so many people watching what they spend and with so much uncertainty in the air, it’s too risky to launch that business of your dreams anytime in the near future.

But at the same time, that idea and reality may not line up quite as nicely as you’d think. In fact, some argue that entrepreneurs actually should not worry about a potential recession for the simple reason that the state of the global economy doesn’t directly impact startups on a large scale.

There are definitely factors that will determine whether or not a startup will succeed, but they have less to do with the coronavirus, with an impending global recession, or with any other large-scale matters than you might think.

The Positives of Founding a Startup in a Recession: What You Need to Know

One of the major reasons why founding a startup in a recession isn’t necessarily the major issue you thought it was going to be has to do with the fact that products and services are generally cheaper during these periods of economic downturn. Smart entrepreneurs aren’t scared by this – they’re ready and waiting to take advantage of it.

While larger companies are looking for any opportunity to retract and shed costs, those struggling businesses will likely sell off a lot of their assets at bargain basement rates. Retailers and other organizations will usually drop their prices in an effort to move as much inventory as possible before it’s too late. Interest rates fall to their absolute lowest, meaning that opening new lines of credit (or borrowing money in general) has never been easier.

Sure, none of this is exactly positive for those larger organizations – but it’s good news for your new startup that couldn’t have come along at a better time. Provided that you already have a plan in place, you can save on costs and still bring your vision of the perfect company into reality at the exact same time.

Top Talent Will Always Be Looking for Opportunities

Along the same lines, your startup will obviously need high quality employees to work for, though depending on the financial side of your business, getting to that point may often feel easier said than done.

But in the event that a global recession does occur, this is another one of the major reasons why this could actually be good news for your efforts. As soon as a global recession sets in, those larger companies are going to begin shedding workers – and fast. As unemployment rates rise across the country, it means that there will be a far larger number of qualified, passionate, and talented people available to fill whatever positions you have available.

By putting in the effort today to put a strong hiring plan in place, you’ll know exactly what type of candidates to go after as soon as they become available. Not only that, but you’ll likely be able to secure these people at lower rates than you would have had the job market been stronger in your industry.

In fact, a lot of people agree that this is actually a great opportunity to bring in a co-founder to compliment your skill set. Never forget that a big part of your success will ultimately be determined less by what you do and more by who you’re able to surround yourself with. If you’re able to attract qualified individuals who A) believe in what you’re trying to accomplish, and who B) fill in a lot of the skills gaps that you yourself possess, you’ll be in a far better position than you otherwise would have been – and earlier on in your company’s lifecycle as well.

Entrepreneurs Solve Problems. That Will Always Be True (and Necessary)

In the end, the same factors that will impact whether a startup can succeed are as true today as they were before any of us had ever heard about the coronavirus. They are and will always involve your founding team and their ability to solve a problem for a paying customer. Starting your business with a qualified, well-balanced, and experienced team is something you simply cannot overstate the importance of.

People will always have problems and they will always look to new and innovative companies to help solve them. Yes, the problems may change given what is going on in the world – but the fact that people are looking for real, effective solutions will not.

In other words, it’s still all about the product-market fit, the same as any other time. If your startup was founded on a genuinely innovative idea that spoke directly to the heart of a universal problem that a lot of people are experiencing, it will find its success. It may take a bit longer in a global recession, sure – but the odds are very much in your favor.

Oftentimes, achieving this product-market fit has little to do with wider macroeconomic trends, which is exactly why a recession is probably a far better time to launch your startup than you thought it was going to be. Once you also remember the simple fact that all recessions eventually come to an end – and that those startups that were founded on a stable foundation are in the best position to rebound at that time – you’re looking at a very exciting position for any entrepreneur to be in.

During the COVID-19 pandemic, the IRS has furloughed many of its employees or had them work from home to mitigate the spread of the virus. Many IRS offices remained shuttered for months, and a backlog of millions of pieces of unopened mail accumulated in trailers set up outside IRS facilities.

This includes unopened mail with payment checks, which creates a problem for many e-filed returns with tax due because the IRS computer shows a tax return filed but no payment made. Because the IRS utilizes a significant amount of automation, its computers began automatically spitting out tax-due notices, including to those who had mailed in payments. While most IRS facilities have reopened and IRS employees have returned to work, it will take them weeks, if not months, to get all of the backlogged mail opened and processed.

After receiving complaints from taxpayers and members of Congress, the IRS put information on its website about these outstanding payments: the payments will be posted as of the date when they were received by the IRS, not the date when the Service processes them. In most cases, this will eliminate or minimize penalties and interest for late payments. So, if you mailed a check to the IRS that has yet to clear your bank, with or without a return, the IRS says that you should not cancel or put a stop-payment on the check. However, you should be sure that you have adequate funds in the account from which the check was written, so that the check will clear when the IRS does process it.

Normally, the penalty for a dishonored payment (a bounced check) of over $1,250 is 2% of the amount of the check, money order, or electronic payment. If the amount is $1,250 or less, the penalty is the amount of the check, money order, or electronic payment, or $25, whichever is lower.

To provide fair and equitable treatment during the COVID-19 emergency, the IRS is providing relief from bad-check penalties. The dishonored payment penalty will be waived for dishonored checks that the Service received between March 1 and July 15 due to delays in IRS processing. However, interest and other penalties may still apply.

The IRS has also decided to suspend mailing certain tax-due notices to taxpayers temporarily until the unopened mail backlog is cleared up. If you have received a tax-due notice but know that you already paid the tax, the IRS asks that you wait to contact it about any unprocessed paper payments that are still pending.

So, for now, taxpayers who have uncashed payments need to be patient. There’s no reason to send additional correspondence to the IRS that would just be added to the mountains of unopened mail, and due to high call volumes, phoning the IRS will be of little use at this time.

If you have any further questions, please give our office a call.

Katrina Douglas has been a Ross Buehler Falk team member since 2018. After attending a year at West Chester University, she decided to enter the workforce. She is one of the administrative assistants that help to keep the office running smoothly – both virtually and in-person! Her organization skills extend beyond the office through her volunteer work. She leads a science-based program for pre-k children and has helped with 5k races that support literacy in Lancaster County.

Want to get to know Katrina even better? We asked a variety of silly questions, and here’s what we learned:

What year did you join Ross Buehler Falk?
2018

Tell us a little about where you attended college and the degree(s) you earned? Any special accomplishments.
I attended 1 year at West Chester University before coming home and entering the workforce.  I am proud of the volunteer work I’ve done; volunteering for a 5k race that supports literacy in Lancaster County since its inception over 5 years ago and helming a science-based program for pre- K children.

What is your favorite thing about living in Lancaster/Pennsylvania?
The location is great.  It’s so easy to visit so many places along the east coast, cities, and beaches, without having to spend days traveling.

Tell us a little about your family.
I have a large extended family and a small immediate family.  Both of my parents come from large families in Indiana (the state!) so I have the pleasure of having almost 50 first cousins.  On the immediate side, my husband and I enjoy spending time with our nieces and nephews. We have 3 cats, Jupiter, Ghost, and Samson, and a dog, Princess.

If you didn’t have to sleep, what would you do with the extra time?
Read and bake more.

What fictional place would you most like to visit?
Wonderland, it would be wild but so much fun!

What is a new skill that you would like to master?
Quilting!

What do you wish you knew more about?
History.

What’s the farthest you’ve ever been from home?
Southern California on a cross country road trip I took with my best friend after high school.

What is the most impressive thing you know how to do?
I’m really good at trivia.

What was the best compliment you’ve ever received?
That I have common sense!

What silly accomplishment are you most proud of?
I’ve read over 100 books in 1 year.

What is your favorite smell?
The ocean.

If you had a clock that would countdown to any one event of your choosing, what event would you want it to countdown to?
My 100th birthday?

When was the last time you climbed a tree?
I can’t remember, I used to climb them a lot as a kid.

What’s the most unusual thing you’ve ever eaten?
Jellyfish.

What was your first job?
TCBY, I got to eat free yogurt every shift!

If you could have any superpower, what would it be?
Time-travel? It seems like it would be pretty neat to see certain events when they were happening, but I definitely wouldn’t want to stay in the past!