In an attempt to get this to you ASAP we are relying on available information, IT IS CHANGING FAST, but the PPP Plan for now, is a first come, first served basis! You may want to act quickly.
Break In : If you don’t have a Twitter account, the time is now – many of the CARE ACT services are crashing their regular sites, as such communication is being made via Twitter … If you REALLY do not want a Twitter account, just use it as a browser, however by having an account you can subscribe to whatever entity you need to follow and you will be notified immediately as they comment.
BREAK IN: Your local bank will likely be able to accept an application FRIDAY APRIL 10, we would suggest you contact your bank about this plan immediately as Friday is a Holiday for many!
The following is most fitting for an Self Employed Employer or Solo Practitioner who has been displaced!
The Care Act was signed into law on Friday, March 27, 2020 and includes a provision for Employers to extend workers pay and possibly NOT REPAY!
The “PPP” Paycheck Protection Plan
BREAK IN: Using Texas as our template the Pandemic Unemployment funds are not being delivered yet as there are too many regular Unemployment requests in front of the plan.
BREAK IN: There is some dialogue that if you have ANY income you may not be able to use the Pandemic Unemployment funds and you may not be able to use both the funds at the same time – This PPP Plan for Solo or Self Employed is likely a faster and better solution at this time.
Forgiveness loan that can be totally FREE to business owners if they qualify and use the funds appropriately. If not, they will receive a UPDATED TERMS 2 year term, 1% interest rate from the Small Business Association, happily administered by qualified local banks in an attempt to speed the process of getting the loans to business owners.
The purpose of this loan is too pay your salary and other expenses…see below.
Available for solo owners of less than 500 people who were or have been adversely affected by the Corona Virus.
Must certify Good Faith that the business has been affected by the Virus. Which can include uncertainty of the future.
Must be applied for by June 30, 2020!
Repayments will not commence UPDATED : IN SIX MONTHS!
Loan amount is the lesser of $10 mllion or 2.5 times your average monthly payroll in 2019 – EXCLUDING AMOUNTS OVER $100K ANNUALLY
IF the entire loan is used completely within eight weeks and is used for any of the following:
- Payroll costs
- health insurance premiums and other healthcare costs
- Salary and net income from business
- Rent
- Mortgage interest (excluding amounts pre-paid)
- Utilities
- Other business interest incurred prior to February 15, 2020
It may be completely forgiven (NO TAXES IN ANY WAY OR PAY BACK AS WE KNOW OF NOW) if the practitioner meets the following employee limits:
- The business must maintain the same number of employees (equivalents) from February 15, 2020 through June 30, 2020 as it did during either the same period in 2019 or
- from January 1, 2020 until February 15, 2020. To the extent this requirement is not met, the amount eligible for forgiveness will be reduced, ratably.
You may not cut any employees <$100k annually by more than 25% or they will not count towards the above headcount.
Again this information is changing quickly, so be sure to confirm with you Banker his comprehension of this!
Have a Great “PPP Solo Plan” Day!
John A. Kvale CFA, CFP
SPECIAL CARE ACT EDITION – PLEASE SHARE – Q 2 2020 Newsletter Video Audio Podcast Review By John Kvale
Click Here for direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page
Let’s get going!
Just so you know this was hurried with a call before and just after this video, so it was not edited as normal … but wanted to get this out to as many as possible as fast as possible… Never claimed to be a Spielberg .. haha … prompt, complete delivery of this information was very important at the moment!
Thanks in advance!
Q 2 2020 Newsletter
The CARE ACT –
On Friday March 27th 2020, a stimulus package was passed into law for the benefit of those being effected by the Corona Virus officially starting the clock for many programs.
The general spirit of the most important parts of the bill is getting money into the hands of consumers quickly AND attempting to incentivize employers to keep workers on the payroll!
Recovery Rebate
Checks Being Sent to Over 90% of the population
Each person to receive $1200, kids UNDER age 17 credited to parents at $500 each, no limit in headcount.
This Rebate is NOT TAXABLE!
The payout is likely to be sent out end of April or early May!
The applicable AGI phase out threshold amounts are as follows:
One time Maximum $100k IRA Distribution Available in 2020 Only
Investors affected by the Corona Virus can take a maximum of $100k of a Corona Virus impacted distribution from your IRA or Employer related plans.
You can repay this distribution within three years and have NO TAXES. You may stagger payback contributions over any time frame as long as you pay all of it back within three years of the day you received the distribution in order not to have taxes due on the distribution.
RMD’s (Required Minimum Distributions) Waived in 2020
All RMD’s for any and all mandatory plans are waived as of 2020.
This includes all types of RMD’s including those with the five year rule.
Next year will not mandate a doubling of the RMD.
Next years RMD will be on the higher mandated level, but again will not cause a duplicate.
One Off Charitable Deduction – Small – Available Only to Non Itemizers
Included in the new Coronal Stimulus package is a one time above the line, Charitable Donation Write off of $300.
This amount is only available to those who do not itemize.
Pandemic Unemployment Insurance Benefit
A New Pandemic Unemployment Benefit available to those effected by the Corona Virus.
This benefit is additionally available to those that may not have had access before, mainly self-employed individuals.
This new benefit is $600/week and lasts for four months.
There is also the elimination of the first week waiting period, allowing those immediate access if needed.
Student Loan Deferral
No payments required until September 30th of 2020!
No interest will accrue during the interim.
Must notify your loan provider if you are on automatic payment.
Paycheck Protection Program – AKA SBA Loan Program
Forgiveness loan that can be totally FREE to small business owners if they qualify and use the funds appropriately. If not, they will receive a possible 10 year term, 4% maximum interest rate from the Small Business Association, happily administered by qualified local banks in an attempt to speed the process of getting the loans to business owners.
The purpose of this loan is too keep your people employed!
Available for business owners of less than 500 people who were or have been adversely affected by the Corona Virus.
Must certify Good Faith that the business has been affected by the Virus. Which can include uncertainty of the future.
Must be applied for by June 30, 2020!
Repayments will not commence until at least six months and no longer than twelve months.
Loan amount is the lesser of $10 mllion or 2.5 times your average monthly payroll in 2019 – EXCLUDING AMOUNTS OVER $100K ANNUALLY
Capital Market Update –
Bonds are so good they are Bad
Given the speed of the equity stock, drop due to the ever expanding Coronavirus. Investors were caught flat-footed and in a dash for cash, sold their old faithful bond holdings which are viewed favorably again due to their safety.
Using history as our guide, not only does this correct itself, but also likely turns out to go even higher in value, which is what happens when rates go down and bonds go up.
In closing, one more bit of good news in almost all cases we will have reinvestment of income at these lower prices, taking advantage of that pricing for our own benefit.
We hope you enjoy … talk to you in the Summer !!!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
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Posted in Audio, Care Act, General Financial Planning, Investing/Financial Planning, Market Comments, Newsletters, Podcast, Political, Video
Tagged Care Act, No RMD, Pandemic Insurance, PPP, RMD, Unemployment Insurance