How the CARES Act Could Help YOUR Small Business with Aaron Smyle

The CARES Act is the topic of discussion around the USA right now—and for good reason. It’s providing economic relief in a time of great need. But it also plays a huge role in economic relief for small businesses. Darla and Natalie have been trying to muddle through what it means for their business and decided to ask a professional—Aaron Smyle.  Aaron is the owner of Smyle & Associates, tax consultants that serve businesses and individuals in the New York City area. He has an MBA, MST, and is an Enrolled Agent (EA), a federally-authorized tax practitioner who has technical expertise in the field of taxation. In this episode of Wingnut Social, he breaks down how the CARES Act helps small businesses. What You’ll Hear On This Episode of Wingnut Social [3:06] Aaron Smyle makes the CARES Act understandable [5:12] How does the Payroll Protection Program work? [11:18] Implications for S Corps and solopreneurs [14:27] Details on the Economic Injury Disaster Loan  [25:28] Aaron explains the Tax Cut and Jobs Act [27:40] Enhancement of charitable contributions [29:20] Is this the wake-up call that we need? [30:35] Why you should pay your taxes if you owe them [34:32] Deductions that do not apply [38:33] Connect with Aaron Smyle [44:22] Blooper Reel! Connect with Aaron Smyle Smyle & Associates Aaron on LinkedIn Smyle & Associates Instagram Resources & People Mentioned CARES Act Payroll Protection Program Economic Injury Disaster Loan COVID-19 Economic Injury Disaster Loan Application How can the CARES Act help small interior-design businesses? As of April 3rd, registration will open online for the CARES act. The Payroll Protection Program (PPP) was part of the legislation that was passed. So what is it? At its core, it’s a forgivable loan from the government to help cover payroll for 8 weeks. You’re allowed to borrow 2.5x the monthly average of your yearly payroll costs (wages, independent contractors, health insurance costs, and retirement benefits are included in the calculation). It also includes owners’ compensation. As a simple example, if your average payroll is $10,000 a month, you can borrow up to $25,000 through the PPP. Eligible expenses that can be considered for forgiveness are rent, utilities, interest payments, and payroll. The caveat is that you HAVE to keep people on the payroll.  If you do not have people on payroll (or wages being paid out), only an amount up to 25% of what is borrowed can be forgiven for rent, utilities and interest. If you’ve already laid some people off, you have until June 30th to hire them back and prove that you’re consistently paying the payroll that you were prior to the coronavirus pandemic.  If your numbers track correctly and you’ve proven you’ve retained your employees, the whole loan amount will be forgiven. At this time, the assistance is for 2 months. If the Coronavirus pandemic persists longer than projected, they may need to pass further legislation. Keep listening as Aaron covers some details for S-Corps, interest rates if your loan is not completely forgiven, and more.  Consider the Economic Injury Disaster Loan  Aaron points out that small business owners should apply for the Economic Injury Disaster Loan (EIDL)—where the first $10,000 is technically a grant. Supposedly, you should have access to the funds within 3 days of applying and no proof is necessary (unlike the records required for the PPP). You can still apply for the PPP, but the $10,000 will be subtracted from the amount that would be forgiven. So if you qualify for $50,000, $40,000 would be forgiven to account for this $10,000 grant. The EIDL is the best option for solopreneurs as it is eligible to cover their wages AND it can roll over into a loan if necessary.  During this time, payroll taxes that you owe can be deferred for a period of time. Aaron implores you to pay this if at all possible. If you go out of business, you as the owner will be personally liable for those taxes and required to pay them back. A