The $2 trillion stimulus package from Congress will have a significant impact on businesses both large and small. This includes sole proprietorships, LLCs, s-corps, corporations, and “gigs” such as Uber and freelancers.
“It is important that businesses know what the package entails, so they can maximize their benefits,” said Issa Asad Florida entrepreneur and social media expert. Mr. Asad is the CEO of Q Link Wireless, Hello Mobile, and Quadrant Holdings, all located in South Florida. He is also the author of 4 e-commerce and marketing e-books that can be purchased on Amazon.
Here, Issa Asad Shares 4 Ways Businesses Can Use Their Stimulus Check:
1) Stimulus Checks
The vast majority of Americans will receive a stimulus check, including small business owners. The amounts are $1200 for individuals, $2400 for married couples, and $500 for each child under the age of 18. However, there are a few stipulations that exclude certain individuals from receiving a check. They include:
Individuals making more than $99k (phasing out after $75k)Married couples making more than $198k (phasing out after $150k)Children 18 years or youngerCollege students (age 18-24) who are being claimed as dependents on their parent’s tax returnNonresident aliensPeople who haven’t filed 2018 and 2019 tax returns
The IRS will use tax returns to direct deposit the amount into qualifying individuals’ bank accounts. If direct deposit is unavailable, the check will be mailed. It is important to make sure your mailing address is up-to-date on the IRS website. If you haven’t filed a tax return for 2019, the IRS will use 2018. If you haven’t filed for 2018, you should file a simple return immediately. Lastly, the stimulus checks are an advance on your 2020 tax refund, it is not free money.
2) Paycheck Protection Program
This program is designed for small businesses, allowing them to obtain a loan to help cover payroll costs. It only applies to small businesses that have fewer than 500 employees as of February 15, 2020. Qualifying businesses will receive an amount based on 2.5 times their monthly payroll costs. If businesses use the money for business obligations such as rent, payroll, or utilities within 8 weeks, the debt will be forgiven. To determine eligibility, contact a SBA qualified loan officer to start the process.
3) Increased Access to Retirement Accounts
Withdrawing from a retirement account is a great way to obtain cash quickly. However, tapping into your retirement savings is only a good idea if 1) you plan to use the money and pay it back quickly through EIDL or PPP loans or 2) business is booming and you’ll have no trouble paying it back. There are a few provisions to consider:
The amount you can loan to yourself has increased from $50k to $100kThe loan is tax-free and penalty-free as long as it is paid back within 5 years (quarterly payments required, a lump-sum payment at the end is not allowed)Taxpayers under 59-and-a-half can obtain penalty-free distributions from retirement accounts (up to $100k)
4) Unemployment Benefits for the Self-Employed
State unemployment benefits have increased by 13 weeks, for a total of 39 weeks. Additionally, the government is providing benefits for the self-employed. Here are some facts to consider:
It is up to the employee to claim benefits after being terminated, not the employerIt may be more beneficial to terminate family members rather than keep them on payroll Each state differs, so it is important to research your state requirements regarding unemployment benefits
About The Author
Issa Asad
Issa Asad is a well-respected entrepreneur, best-selling author and marketing strategist from South Florida. With over 15 years of experience in the telecommunications, technology and marketing industries.
