So far this year, mortgage rates continue to hover around 3%, encouraging many hopeful homebuyers to enter the housing market. However, there’s a good chance rates will increase later this
Covid Relief And Being Self Employed
Dated: June 4 2020
In response to coronavirus, the Treasury, IRS and federal government have announced several changes to the tax filing season, coronavirus relief, and stimulus packages for individuals, the self-employed workers and businesses. If you’re self-employed, here’s everything you need to know about what the Coronavirus Aid, Relief, and Economic Security (CARES) Act and Families First Act mean for you.
The federal tax filing deadline has been extended to July 15, 2020. Taxpayers getting a refund are encouraged to file their taxes now to get their money.
If you’re self-employed or own a small business, you might be wondering what these recent announcements mean to you. We’ve got you covered with a summary of some important things to keep in mind, below.
You can also visit our Self-Employed Coronavirus Relief Center to get up-to-date information, tax advice and tools to help you understand what coronavirus relief means for you.
Refunds Will Continue to Be Processed as Normal
While the federal tax filing deadline was extended to July 15, 2020, for all taxpayers, the IRS expects to continue to process refunds as normal. Last tax season, close to 72% of taxpayers received a tax refund close to $3,000, which for many taxpayers is their largest paycheck of the year. The IRS typically issues nine out of 10 tax refunds within 21 days or less from acceptance with e-file and direct deposit – the fastest way to get your refund.
Extensions for Self-Employed and Businesses with Tax Payments Due
The Treasury and IRS announced the deferment of federal tax payments, interest-free and penalty-free, for 90 days, until July 15 regardless of the amount owed. This deferment also applies to tax year 2020 first and second quarter federal estimated tax payments previously due on April 15 and June 15.
Extension for First and Second Quarter 2020 Federal Estimated Tax Payments
If you file quarterly estimated taxes, some good news. The first and second quarter 2020 federal estimated income tax payments have been extended to July 15, 2020.
First Quarter 2020 Estimated Tax Payment Deadline
Original Date: April 15, 2020
New Date: July 15, 2020
Second Quarter 2020 Estimated Tax Payment Deadline
Original Date: June 15, 2020
New Date: July 15, 2020
Third Quarter 2020 Estimated Tax Payment Deadline
Unchanged Date: September 15, 2020
Fourth Quarter 2020 Estimated Tax Deadline
Unchanged Date: January 15, 2021
Tax Relief for Self-Employed and Small Businesses Under the Families First Coronavirus Response Act
The Families First Coronavirus Response First Act, which was passed March 18, provides relief in the form of refundable tax credits for sick leave and family leave for both eligible self-employed and small business owners.
Self-Employed Tax Credit for Sick Leave. If you are self-employed, you may be eligible for a refundable tax credit equivalent to a qualified sick leave amount. Qualified sick leave is based on your average daily self-employment income.
Self-Employed Tax Credit for Family Leave. If you are self-employed you may be eligible for a refundable tax credit equal to 100 percent of a qualified family leave equivalent amount for eligible self-employed individuals.
Small Business Tax Credit for Paid Sick Leave. If you are a small business owner and paid sick leave wages to your employees you may be eligible for a refundable tax credit equal to 100 percent of qualified sick leave paid.
Small Business Tax Credit for Paid Family Leave. If you are a small business owner and paid qualified family leave wages to employees, you may be eligible for a refundable tax credit equal to 100 percent of qualified family leave wages paid.
Pandemic Unemployment Assistance (PUA) program
As part of the CARES Act, the Pandemic Unemployment Assistance (PUA) program was announced. PUA program benefits are available for individuals who do not usually qualify for unemployment compensation and are unable to continue working as a result of COVID-19, such as self-employed workers, independent contractors and gig workers.
Under the Federal Pandemic Unemployment Compensation (FPUC) program, eligible individuals who are collecting certain UI benefits, including regular unemployment compensation, will receive an additional $600 in federal benefits per week for weeks of unemployment ending on or before July 31, 2020.
The PUA program covers up to 39 weeks of benefits for any eligible individuals and is retroactive for weeks of unemployment, partial employment, or inability to work due to COVID-19 reasons starting on or after January 27, 2020.
Additionally, the Pandemic Emergency Unemployment Compensation (PEUC) program allows those who have exhausted benefits under regular unemployment compensation or other programs to receive up to 13 weeks of additional benefits.
Paycheck Protection Program (PPP)
The Paycheck Protection Program (PPP) is part of the CARES Act and consists of approximately $350 billion in government-backed loans to help self-employed and small businesses pay for eight weeks of payroll costs.
If you are self-employed you may be wondering, how are payroll costs calculated under PPP? Your payroll costs will be based on your income, commission, and net earnings up to $100,000.
If you’re a QuickBooks Payroll customer, Intuit launched QuickBooks Capital, a non-bank SBA-approved lender for the Paycheck Protection Program (PPP). QuickBooks Capital provides a simple application and funding process to allow quick access to relief.
Economic Injury Disaster Loans
Under the CARES Act, small business owners, sole proprietorships, independent contractors and other self-employed individuals are eligible to apply for Economic Injury Disaster Loans (EIDL), which seeks to alleviate loss of revenue due to COVID-19.
Under the CARES Act, eligible individuals can apply for an EIDL cash advance of up to $10,000. The EIDL loan amount will be based on the amount of “economic injury” the individual has sustained as a result of the coronavirus epidemic and will not have to be repaid.
Intuit Aid Assist
Intuit, the maker of TurboTax, has launched Intuit Aid Assist, a free website with an interactive tool to help eligible small business owners and self-employed assess how much federal relief they are eligible for under the CARES Act, administered by the Small Business Administration.
Intuit Aid Assist is the newest of three services recently launched by Intuit to help Americans better understand and potentially access billions of dollars through the U.S. government’s Coronavirus aid and relief programs.
Intuit Aid Assist takes the complexity of hundreds of pages of the CARES Act and converts it into an easy-to-understand interview that provides answers to the most pressing questions on small business owners’ minds: What relief am I eligible for? How much of a loan can I get? How much of my loan may be forgiven so I don’t have to repay it?
The interactive tool assesses eligibility, estimates loan amounts, delivers a personalized recommendation and, for qualified small businesses and other eligible applicants, provides a link to help them take the next step of applying for a loan. Intuit Aid Assist supports both the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) relief programs.
Intuit TurboTax has also launched TurboTax Stimulus Registration Product, to help those Americans who don’t need to file a tax return provide the IRS the information necessary to get a stimulus check.
TurboTax Has You Covered
TurboTax has you covered with the most up-to-date information regarding new legislation and tax filing changes and announcements in response to COVID-19. TurboTax Self-Employed will ask you simple questions about you and give you the tax deductions and credits you’re eligible for. If you still have questions, you can connect live via one-way video from the comfort of home to a TurboTax Live Self-Employed CPA or Enrolled Agent with an average 15 years experience to get your tax questions answered. TurboTax Live Self-Employed CPAs and Enrolled Agents are available in English and Spanish and can even review, sign and file your tax return.
You can find the latest information on the tax changes and announcements in response to COVID-19, here.
Michelle is a native of Southwest Missouri and has twenty-five years of experience in selling real estate in the greater Springfield area! Michelle specializes in all price points, including new const....
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